Utility privatisation in Sub-Saharan Africa: a case study of water

Abstract

Over the past twenty years, the focus of development policy has shifted from the state to the private sector. Privatisation is now central to utility reform in much of SSA. This paper sets out developments in water privatisation and reviews the evidence regarding its impact. Water privatisation has been carried out to some degree in at least fourteen countries in the region, and many other governments are at various stages in the privatisation process. However, in some cases privatisation has been difficult to achieve, and a few countries have successfully provided water under public ownership. Evidence on the impact of privatisation indicates that the performance of privatised utilities has not changed dramatically, but that enterprises have continued to perform well, or not so well, depending both on their state when they were privatised and on the wider economic context. The evidence points to internal improvements in terms of financial management. However, governments face considerable difficulties in attracting investors and regulating private utilities. Furthermore, privatisation fails to address some of the fundamental constraints affecting water utilities in SSA, such as finance, the politicised nature of service delivery, and lack of access for the poor. A preoccupation with ownership may obscure the wider goals of reform.