Final project for Risk Management course. Hosted by the world bank

2. KEY POINTS LEARNED FROM COURSE
The route to development is filled with both risks and opportunities. In order to
seize opportunities, it is necessary to confront and even take risk. Even when
not pursuing risk for opportunities, people face many risks in their everyday
lives. For example: crime, disease and natural disasters.
Adequate information or knowledge of potential shock, taking good insurance
covers and individual and household protections are effective ways of planning
for shocks. Taking the scenario where a household resides in an area of
frequent flooding for instance, information about the yearly timing of the flooding,
building the Foundation of your house a little bit higher as form of protection and
taking Home insurance are good preparation strategies.

3. KEY POINTS LEARNED FROM COURSE
In some cases, People often don’t have the
resources or ability to confront the risk they
face. Sharing risks with family, community and
other social groups and institutions is key to
lifting the burden of these risks on the individual
thereby creating an avenue to explore
opportunities.
WHO REMEMBERS THE
MONOPOLY GAME?

5. KEY POINTS LEARNED FROM COURSE
Some questions should be asked of the various Risk management agents, if Risk
is to be managed efficiently in that system:
• Individual: What is my external environment and internal conditions? What
shocks can I encounter? How can I effectively prepare for them? What risks can
be taken and how can I take advantage of the opportunity side of these risks?
• Community: In what ways can we collectively reduce the effects of shocks
on members of the community? Do we have good leadership and how good is
our external support?
• Enterprise sector: In what ways can we create new jobs? How can the
benefit structure be improved while still focusing on Maximizing profit?
• Financial sector: How can insurance and credit facilities be designed to fit
low to high-income individuals?

6. KEY POINTS LEARNED FROM COURSE
• State: What actions can be taken to provide an enabling environment for
the levels below to function successfully? Social protection, Public goods and
public policy; How well have taken these into consideration? How can we
ensure that there is successful budget distribution amongst the various sectors?
• International Community: How credible are our forecasts and how are we
working in the best interests of the most vulnerable countries? How have
resources and expertise at our disposal been effectively used to this effect?

7. THE POWER PROBLEM
Nigerians are among the
people most deprived of grid-
based electricity in the world
with a per capita consumption
that is far lower than many
other African countries’. A
South African is provided 97
per cent more electricity than
a Nigerian while a Brazilian
enjoys 93 per cent more. With
a population of 150 million,
Nigeria’s generation capacity
is around 3,600 Megawatts.
Investment and growth in
Nigeria’s power sector had
for some 40 years seriously
lagged behind the growth in
Nigeria’s population, leading
to inadequate and obsolete
equipment. Not only is
capacity and equipment
grossly inadequate, the
performance of the existing
facility in Nigeria’s power
sector is seriously
compromised by irregular
maintenance..

8. THE POWER PROBLEM
The challenge here is that a good budget
proportion goes to alternate sources of
electricity for example: Generator, Inverters,
private solar energy e.t.c. In other words, vast
majority of the Risk agents, that is; Family,
enterprise and financial sectors have to pay for
constant electricity to keep their businesses
running.
A solution has however been
proposed to this issue. It is in the
form of privatization of the
power sector…………………..

9. THE SOLUTION PHASE
• In March 2005, the National Assembly passed the Electric Power Sector
Reform Act which allowed private companies to invest in and operate power
companies in Nigeria. The Act also provides for the creation of institutions
required to protect consumers and stimulate investment in a power sector
market with competing firms.
• The vision of the power sector reform is to stimulate adequate levels of
investment in the power sector, which the Central Bank of Nigeria (CBN) put at
$10 billion per annum, and improve the quality of management. In the short
term, steps are being taken to improve project planning and rehabilitate
defective equipment in the system.

10. THE SOLUTION PHASE
• Very recently, In a bid to improve the power sector, the Federal government
of Nigeria successfully handed over the affairs of this sector to foreign private
investors.
• This implies that the average Nigerian can allocate his finances adequately
to preparing more for risk as opposed to ‘buying’ the very basic Electricity
amenity. This ultimately puts him/her in a better position to grasp opportunity
and improves general livelihood
• This is a very good means to ending the Power problem.

11. RECOMMENDATIONS
• I recommend that the handover process be done with a good level of
transparency between the parties involved and the whole process be
implemented with a lot of professionalism.
• Special provision has to be made for supervision of the project, in order for
it not to be used as a money laundering avenue.