This research is aimed at finding the effect of corruption on effective service delivery in the public sector using Power Holding Company of Nigeria (PHCN) as a case study. The study seeks to examine the reforms, and effect on electric power supply reliability and stability in Nigeria. The major problems affecting the model been pursed especially in a developing country like Nigeria were also examined.


Over the past 25 years, electronic power sector has witnessed slow and steady decline leading to near failure of the system in 1999 at the beginning of the immediate past civil Government. The federal Government of Nigeria using national council of privatization (NCP) in 1998 had embarked on electric power sector reform program which gave birth to 18 companies under the auspices of PHCN. In February 2007, government of Nigeria (GON) awarded contracts of about $875 millions dollars across the country in actualizing some of the goals in the power sector reforms.


The study opined that if all identified problems militating against PHCN meeting the energy demand of the country is met by reforming the energy sector, in no time distance time Nigeria can boost of an electric power supply industry (EPI) that can meet needs of its citizens and place the nation as one of the industrialized country in the world. Data to be used in this study will be obtained from employees of PHCN and the general view of people through chi-square. At the end of this study, it would be discovered that corruptions has negative effect in service delivery system as well as in the economy at large. Various recommendations will be made on how these problems could be solved.




Title Page                                                                                         1

Abstract                                                                                   2

Table of Content                                                                      3



1.1   Background Information of the Study                              5

1.2   Purpose of the Study                                                       9

1.3   Significance of the Study                                                         10

1.4   Scope and Limitations to the Study                                         11

1.5   Research Questions                                                                 11



2.1   Theoretical Framework                                                    13

2.2   Historical Development of Power Holding Company

        of Nigeria (PHCN)                                                             13

2.3   Transition to Competitive Energy Marketize Policy

        Issues and Imperatives                                                    17

2.4   Concept of Corruption                                                     21

2.5   Remedies to Effective and Efficient Service Delivery

in the Public Sector                                                         32

2.6   Summary                                                                                 33




3.1   Introduction                                                                     34

3.2   Sample and Sampling Technique                                    34

3.3   Data collection Instrument                                              35

3.4   Administration of Data Instruments                                        35

3.5   Validity and Reliability of Instrument for Data collection         36



4.1   Introduction                                                                     38

4.2   Questionnaire Distributed to PHCN staff                         38

4.3   Hypotheses testing using Chi-square Technique             56



5.1   Introduction                                                                     64

5.2   Summary                                                                                 64

5.3   Conclusion                                                                      67

5.4   Recommendation                                                             68

5.5   Suggestions for Further Research                                    68

References                                                                       71

Questionnaire                                                                  72





1.1   Background Information of the Study

Government has we all know are the major provider of essential needs to the masses at little or no cost. Corruption has been the major factor affecting the efficient service delivery in the public sectors. It has been described as the single line that defines the problems of the country, poor service delivery in the public sector.

Over the years, power has been supplied by National Electric Power Authority (NEPA) now PHCN has been very poor, this had caused and might continue to cause disappoint on the masses because it failed to meet their respective expectations. The public sector was largely characterized as ineffective and not sufficient by Chief Olusegun Obasanjo.

In the early 1960’s, the Niger Dan Authorities (DAN) and electric cooperation of Nigeria (ECN) then ,immediately after the Nigeria civil war, the management of ECN changed its nomenclature to National Electric Power Authority, currently known as Power Holding Company of Nigeria came to into effect on 31st may 2005 saddled with the responsibility of supplying power electricity in Nigeria.

A number of scholars have described the principle driving the forces behind the service delivery in public sector.

Capital Scarcity: in the 1980’s, there was a recognized shortage of capital to finance the required expansion of power supply.

Economic Inefficiencies: in most developing countries like Nigeria, the power sector has troubled by high technical losses, a lack of cost recovery pricing, poor maintenance, low equipment reliability, high level of corruptions, a crippling non-payment problem, mounting these factors have resulted in the commercial instability of power sector in Nigeria.

Persistent Poverty: The lack of reliable power supply and other infrastructure has had a notably adverse impact on industrial growth and low development and this contributed to perpetuating poverty in Nigeria.

Debt and deficit: The power sector in Nigeria is saddled with large debts accumulated from years of not changing cost recovery tariffs, not collected accrued debts from all customers, not disconnecting who do not pay but collecting bribe which would not have effect in the account of the management.

Corruption: Unethical practices and behavior that are contrary to the practice commonly advocated by the constitution or which include looting public fund “lootocracy” misappropriation, money laundering abuse of the office.

The below diagram described the major factor affecting the effective delivery service in the public sector.







In 2008, power generation by the PHCN dropped by 800 megawatts from 3,300 now to 2,500mw.Consequently, PHCN to 12 hourly zonal powers rational which was in force before it was later suspended. The vice chairman and Chief executive officer(CEO) Mr. Sulaiman Bello stated that the current facilities within the organization can give the country 4,000mw of electricity if the Nigeria gas company(NGC) sustains supply of natural gas to its thermal plans across the country- (Business day: fast news Nigeria and steels, 17 November 2008).

Presently, power generation is mainly from plants (about 6190) while hydro power generation is about 3190. Most of the generating assets in the public power sector are old, between 18 and 43 years. Lack of timely routine had caused significant deterioration in plant output and is a key explanatory factor in the lingering electric power crisis.

According to the industry watchers, more than two decades of poor planning and under investrnent had left a huge supply deficit and there was no new infrastructure in over decades despite rapid population growth and rising demand power. The sector was at the brink of collapse, average daily generation in 1999 was 1,750mw (almost to 10 years, the situation was not remarkably different as available capacity output is still less than 2.5gw). Add this to the fact between 1990 and 1998, no new capacity was added. The focus has been on rehabilitation of existing infrastructure.

Vividly, corruption is not the only factor affecting effective service delivery in the public sector and basically in PHCN also the inability of power management planning which make it possible for its officials to exploit and exploring its resources. Before the payment of electricity bill through banks, there was no adequate management internal control of revenue receivable and expenditure incurable. For several years, despite consistent perceived cash investment by the federal government of Nigeria, power have been the standard for the Nigerian populace and are now seen as normal by the citizens of the country.

Corruption occurs most in public service which hindered efficient and effective service delivery. More so, one would rightly justified that to say that the masses and the public officials contributes to how service delivery is insufficient, It is, therefore, the inherent for this study to examine the relationship between corrupt practices and quality of service rendered in the public sector.

1.2   Purpose of the Study

(i)     To identify the causes of corruption in the public sector of the Nigeria economy.

(ii)    To examine the effect of corruption on service delivery in the public sector and on the economy at large.

(iii)   To highlight the adverse effect of insufficient power supply in the Nigeria economy.

(iv)   To know that corruption is the major factor affecting quality service delivery in the public sector.

(v)    To recommend possible solution to the problem of corruption, low rate of power supply and its effect in the economy as a whole.

1.3   Significance of the Study

It has been clearly stated and noted that government in any country is about providing essential services to the masses through the ministries and extra-ministerial departments (i.e. ministry of power and steel, ministry of education) etc in order to achieve increasing efficiency and effectiveness in service delivery.

However, these might not be easy to achieve where corruption exist thus, this research is aimed at suggesting reasonable solutions at reducing corruption to its lowest minimal in order to enhance adequate service delivery system. In addition, it is understood that corruption has adverse effect on service delivery in the public sector but there are some other factors hampering effective service delivery. Take for instance, the power holding company of Nigeria lacks internal control, monitoring, accountability and adequate planning within its staffs which brings about ineffective service delivery e.g., low current and inconstant power supply.

The knowledge gained from this research would help public administrations to be more effective and efficient in discharging their respective duties. It will also serve as a basis for further research to carry upon and make positive change on service delivery system in the public sector.

1.4   Scope and Limitations to the Study

This study is limited to Power Holding Company of Nigeria (PHCN). The issue of electric generating capacity is briefly discussed and the issue of privatization of the institution that is PHCN is not covered. The study has identified areas of factor affecting corruption and service delivery in the public sector and subsequently provides possible solution using PHCN as a case study.

1.5   Research Questions

This study attempts to the find solutions to the following questions which had prompted the research.

(i)          What are the causes of corruption in the public sector of the Nigeria economy

(ii)        Is there any relationship between corruption and quality of service delivered in the public sector?

(iii)      What is the possible solution to the problem of corruption in the country?

(iv)       What effect does corruption have on the economy as a whole?

(v)         Are there other factors apart from corruption that may hamper effective service delivery?

(vi)       How can service delivery be enhanced?


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