This working paper presents the context and current developments in the utilities (water and electricity) sector in Nigeria. It analyses the situation and the major challenges of the sector and examines the general impacts of privatization and restructuring on employment levels and conditions in the sector. In addition, it assesses the overall socio-economic matters relating to employment and labour issues. The paper aims to identify conditions that facilitate successful reforms and recommend how current issues and challenges should be dealt with in immediate and long-term future to ensure sustainable development of the sector.