Lessons from Nigeria’s Past Privatizations for Upcoming Asset Sales

Lessons from Nigeria’s Past Privatizations for Upcoming Asset Sales

The Federal Government’s plan to divest selected state-owned assets to private investors is not without precedent.

Nigeria has a long history of privatization efforts, most notably in the power sector, telecommunications, and steel industries.

These past experiences offer valuable lessons that could shape the success, or failure, of the new program.

The privatization of the power sector in 2013 stands out as one of the most ambitious undertakings. The government unbundled the Power Holding Company of Nigeria (PHCN) into generation and distribution companies, which were then sold to private investors.

While the move was intended to improve efficiency and expand electricity access, the results have been mixed. On one hand, private ownership introduced new capital and management practices. On the other, persistent issues such as inadequate infrastructure, regulatory bottlenecks, and liquidity crises have prevented the sector from delivering reliable power to Nigerians.

This underscores the importance of not just selling assets, but ensuring that the regulatory framework and supporting infrastructure are robust enough to sustain reforms.

Telecommunications privatization, particularly the licensing of GSM operators in 2001, provides a more positive example. The entry of private players like MTN and Airtel transformed Nigeria’s communications landscape, expanding mobile penetration from under 1 percent to over 80 percent within two decades.

This success was driven by clear regulations, competitive bidding, and strong investor confidence. It demonstrates that when privatization is transparent, competitive, and backed by sound policy, it can yield transformative results.

Conversely, the sale of Ajaokuta Steel Company and other industrial assets highlights the pitfalls of poor execution. Mismanagement, lack of due diligence, and political interference led to stalled operations and wasted potential.

These failures remind policymakers that asset sales must be guided by professionalism, transparency, and a commitment to long-term value creation rather than short-term revenue gains.

As Nigeria prepares for another round of asset sales, the lessons are clear. Transparency must be non-negotiable, regulatory frameworks must be strengthened, and investor selection must prioritize competence and long-term commitment.

The government must also guard against the temptation to treat privatization as a quick fix for fiscal challenges. Instead, it should be seen as part of a broader strategy to unlock value, stimulate growth, and empower the private sector to drive innovation.

If Nigeria can learn from its past, replicating the successes of telecommunications while avoiding the missteps of the power and steel sectors, the upcoming asset sales could mark a turning point in the country’s economic reform journey. The stakes are high, but so too is the potential reward.