Utility regulation in Africa: report on strategies for promoting accessibility and accountability in public service delivery

Abstract

Despite the implementation of structural adjustment programmes, which comprise public enterprise reform, government ownership is widespread in sub-Saharan Africa-in both competitive and other sectors. while public enterprises in 1991 accounted for 17.3 percent of GDP in African countries (World Bank 1995), total privatization proceeds since 1990 amounted to only 0.2 percent of regional GDP. Another estimate suggests. that public enterprises in Africa still account for over 15 percent of GDP on average (Chong and Lopez-de-Silanes 2004). In competitive sectors, some 280 enterprises in over 30 countries that have long been earmarked for privatization are still pending for sale; and in at least half of the countries in the region, the water, fixed line telephony, railways, airlines, and petroleum product distribution sectors ate still fully state-owned and operated, while the same holds true in more than two-thirds of the countries for the electricity sector, in both generation and distribution {OECD 2004). The challenges of utility regulation in Africa are significant given that most of the utilities in the te1econununications, electricity and water sectors are state-owned enterprises. Thus there is conflict in the role of government as the regulator, owner and policy maker. This conflict should have been addressed by the establishment of independent regulatory institutions, which are expected to be authoritative, consistent, independent and predictable in carrying out their mandates. Political interference by government in the management of state owned utility companies imply that the effectiveness of regulatory institutions, which ate also answerable to the same government is weakened Regulatory agencies in Africa in the three mentioned sectors ate still grappling with challenges to establish their effectiveness and relevance to their economies.