Eight things we know about water and electricity utilities in Africa

By Luis Andres, The World Bank

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Infrastructure is one of the most important forces driving economic growth and poverty reduction. Yet Africa’s infrastructure networks lag increasingly behind those of other developing countries in providing telecom, electricity, and water supply and sanitation services. Two-thirds of the population in the region lacks access to electricity and five out of six people don't have access to piped water. The people and industries that do have services pay twice as much as those outside Africa, further reducing regional competitiveness and growth. As cities continue to flood with migrants looking for better economic opportunities, power and water utilities are being challenged to improve the services offered to existing and new users. Given scarce resources and competing development priorities, it is essential to establish ways of using resources (and knowledge!) more effectively. 

 Utilities are on the frontlines of water and electricity services in urban areas. We have hundreds of such organizations in the region with a kaleidoscopical set of arrangements. Varied ways of measuring utility performance require different types of data and observation, which yield quite subjective conclusions about the level of performance. Unfortunately, reliable and complete data is a major challenge for both the energy and water sectors. It is hard to improve performance without having reliable data and basic reporting mechanisms in place that are available to the public — externally audited financial statements are often missing, for example. Utilities themselves do not always collect basic performance data; this is especially challenging in the case of the energy sector, which does not report on service quality at the end-user level.

The 8 findings from the World Bank to know about water and electricity utilities in Africa

1. The operation and management of utilities in Sub-Saharan Africa are characterized by big similarities in several business areas, but significant differences in others.

2. Overall, the performance of water and electricity utilities in Sub-Saharan Africa is low, but there are some relatively well-performing utilities on the continent on par with the best performers in other regions.

3.However, even among the best-performing utilities, performance Vis a Vis the customer is relatively weak.

4. Well-performing utilities in Sub-Saharan Africa benefit from a strong institutional framework and norms and policies that promote transparency and accountability and protect customer interests.

5. While not a first choice among approaches, some governments have turned crisis into catalytic opportunities to reform a utility.

6. Governments are finding innovative ways to balance financial performance with affordability, especially for poor people.

7. Expanding water and electricity coverage is a priority and can be achieved by making utilities more efficient and targeting investments better.

8. African cities need substantial investments in water supply networks and production facilities, both for new infrastructure and for the upgrading of existing facilities.

This news item was originally posted on The Water Blog of the World Bank. To read the original news item, click here.