£140 million of UK aid money spent on projects supporting Nigerian energy privatisation

Tuesday, 17 March, 2015

New research released today by campaign group Global Justice Now shows that since 2002, £140 million of UK aid money has been spent by the Department for International Development (DfID) on projects to support the privatisation of Nigeria’s energy system, with disastrous consequences for people in Nigeria, including:

  • Price rises – prices have been increased twice since privatisation, with another increase announced in January 2015. 
  • Fixed payments - users have to pay a certain charge, payable monthly whether they consume electricity or not, which means that people who use the lowest amount of power pay the most per unit.
  • Job losses - in spite of an agreement between the government and energy sector unions
  • Blackouts, reduced supply and poor service

The revelations come in the week following UK parliament approving aid spending being legally enshrined at 0.7% of Gross National Income, and the day before the Spring Budget outlines aid spending.

An open letter to development secretary Justine Greening, which has been signed by trade unions including UNISON and the GMB, says that, “There is a growing body of evidence that the push for privatisation of energy, water and other public services that has taken place in countries around the world has had overwhelmingly negative impacts in meeting basic human needs and realising human rights… As such, we are calling on your department to put an end to aid money being used to promote or finance the privatisation of energy or other public services in other countries.”

Christine Haigh, energy justice campaigner with Global Justice Now said:
“Energy privatisation has been a disaster in the UK, with enormous price hikes meaning that record numbers of people are living in fuel poverty while the Big Six enjoy huge profits. So why are we spending public money to export this failed model to the people of Nigeria? Aid money should be spent meeting the needs of poor communities, not on facilitating the ideologically-driven expansion of free-market mania. It’s great that the UK’s aid spending is becoming legally enshrined but now we need to make sure that that money goes to help communities rather than corporations.”

President Goodluck Jonathan has been a major driver of power privatisation since his election in 2011, but support from the UK government has been instrumental. Current UK support for power privatisation is via the Nigeria Infrastructure Advisory Facility (NIAF) project, which is being implemented by Adam Smith International, a consultancy firm set up by free-market think-tank the Adam Smith Institute. According to DfID, Adam Smith International is one of its biggest suppliers.

This is the second phase of the NIAF project: the first was completed early after the budget was spent before completion, and the second phase (NIAF2) had its original budget of £48m increased to £98m in 2013. The latest annual review of the project makes it clear that poverty reduction impacts are almost completely absent from the project, describing this as a “serious shortcoming of the project”, stating that many of the project’s strategies don’t reflect an “evidence-based approach”.

Ken Henshaw, the Senior Programmes Manager with Social Action in Nigeria said:
“Nigerians have been blackmailed into believing that there was no solution to the electricity challenges without privatisation. Regardless of whether or not the privatisation process leads to better power supply, the truth is that with the recent frightening increases in the cost of electricity, the vast majority of Nigerians won’t benefit from better supply as they can’t afford it. 67% of the people in Nigeria live on less than $1.25 a day. So you have to ask the question, who is benefitting from the privatisation of energy in Nigeria, as it certainly isn’t the people of Nigeria.”

David Boys, the Deputy General Secretary of Public Services International who has been working with the union of electricity workers in Nigeria said:
“It’s shocking and dismaying that DfID continues to spend UK taxpayer’s money to advocate policies that have failed in the UK, let alone across Africa. It seems that DfID is blindly following a deeply discredited, ideological approach that only serves to line the pockets of UK consultants while further entrenching corruption among Nigeria’s elite.”

The full letter to Justine Greening:

Dear Justine Greening,


We write as representatives of civil society from Britain and Nigeria to express concern at your department’s ongoing support for privatisation of energy around the world. In particular, we are concerned about your recent support for the privatisation of Nigeria’s energy sector via the Nigeria Infrastructure Advisory Facility (NIAF) project.
There is a growing body of evidence that the push for privatisation of energy, water and other public services that has taken place in countries around the world has had overwhelmingly negative impacts in meeting basic human needs and realising human rights.


We also fear it entrenches inequality. Even in the UK the privatisation of the energy sector is now widely critiqued. The Nigerian privatisation appears to us even more flawed, with no attempt to create competitive conditions, and serious conflicts of interest between consultants in Nigeria and government personnel. We also note that a recent annual review of the project makes it clear that poverty reduction impacts are almost completely absent.


As such we are not surprised that the impacts of privatisation so far have been detrimental to many people in Nigeria. These impacts include:

  • Price rises – prices have been increased twice since privatisation, with another increase announced in January 2015. 
  • Fixed payments - users have to pay a certain charge, payable monthly whether they consume electricity or not, which means that people who use the lowest amount of power pay the most per unit.
  • Job losses - in spite of an agreement between the government and energy sector unions
  • Blackouts, reduced supply and poor service

As such, we are calling on your department to put an end to aid money being used to promote or finance the privatisation of energy or other public services in other countries.
In recent years there has been a rejection of privatisation of public services from many countries around the world, with many successful examples of remunicipalisation. We strongly urge DfID to study these examples and to use its important funds in order to support democratic, public solutions to sectors like energy and water.

Yours faithfully, 
Dr Godwin Ojo, Executive Director, Earth Rights Action/Friends of the Earth Nigeria
Ken Henshaw, Senior Programmes Manager, Social Action
Raymond Nyayiti Enoch, Center for Environmental Educational and Development (CEED)
Nick Dearden, director, Global Justice Now
Dave Prentis, General Secretary, UNISON
David Boys, Deputy General Secretary, Public Services International
Matt Wrack, General Secretary, Fire Brigades Union
Anna Galkina, Platform
Clare Welton, Fuel Poverty Action
Cat Hobbs, Director, We Own It
Jan Willem Goudriaan, General Secretary, European federation of Public Service Unions
Bert Schouwenburg, International Officer, the GMB
Chris Baugh, Assistant General Secretary, Public and Commercial Services Union (PCS)

 

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