Nigeria power minister resigns before privatization

Nigeria's Power Minister Barth Nnaji speaks during an interview with Reuters in Abuja in this April 25, 2012 file photo.

ABUJA (Reuters) - Nigeria's power minister resigned on Tuesday, the presidency said, two months before preferred bidders were due to be announced in a privatization process meant to overhaul the country's ailing electricity sector.

There were reports in some Nigerian newspapers on Tuesday Barth Nnaji had an interest in a company involved in the bidding process for two state assets up for sale.

A spokesman for Nnaji confirmed the minister had a stake in such a company, but said there was no conflict of interest because regulators had been informed.

The spokesman declined to say why Nnaji resigned, and no reason was given in the announcement of the resignation by the presidency.

"He didn't like the totally wrongful accusations he had a conflict of interest in this process. These were planted by vested interests," spokesman told Reuters.

"He would rather go about his private business."

It is highly unusual for Nigerian politicians to resign over conflicts of interest in a country that still ranks low on the Transparency International corruption perceptions index.

Nigeria plans to sell off 11 distribution and six generation companies as part of plans to privatize a power sector rife with inefficiency and corruption.

Economists and investors say a lack of power is one of the biggest brakes on growth in Africa's second biggest economy. Chronic power shortages are also a major headache for Nigerians.

Preferred bidders for the 17 successor companies are due to be announced on October 23, the Bureau of Public Enterprises (BPE) has said.

The privatization agency has said Nigeria's economy could be growing at over 10 percent, compared with around 6.5 percent now, if it solved its power crisis, but it would need $15-$20 billion of investment in the next three years.

Nigeria holds the world's seventh largest natural gas reserves but decades of governments have chosen to cash in on crude oil sales rather than investing for domestic power needs.

Nigeria only provides its 167 million inhabitants with around a quarter of the amount of electricity used by New York City, leaving those who can afford it to use expensive diesel generators and those who can't to live without any power.

President Jonathan has made reforming the power sector a priority and a significant upsurge in electricity output would bring him support from the Nigerians who have been disappointed with his progress since taking office last year.

(Additional reporting by Afolabi Sotunde and Felix Onuah; Editing by Tim Cocks and Andrew Heavens)