African water privatization

New report on African water privatization 

A new report worth checking out:
 
Water privatisation in SSA: Progress, problems and policy implications
by Kate Bayliss, PSIRU (a UK based think tank that looks at issues 
affecting public sector services, among other things).
 
Available at: www.psiru.org

Privatisation has been carried out to some degree in fourteen 
countries in SSA, and many others are interested. A handful of major 
multinationals are buying up all these utilities.
 
Here is the intro...
 
1 Introduction: 

water in SSA is not like other commodities
Water privatisation is increasingly widespread and in sub-Saharan 
Africa, privatisation is now on the agenda in most countries. This 
paper aims to analyse developments in water privatisation in SSA by 
looking firstly at what privatisation has taken place in the region. 
The subsequent section then considers the countries where 
privatisation has not taken place and the reasons for this. There is 
then a review of findings from case studies on the impact of 
privatisation. Finally we consider the lessons to be learned and 
policy implications from the experience of privatisation in SSA.
 
Water in SSA is not like other commodities. Consumers in SSA are 
among the poorest in the world. Furthermore, the currencies of these 
often fragile economies are vulnerable to fluctuation and 
devaluation. These features present particular difficulties in 
promoting the water sector as an attractive business prospect. In 
much of SSA, the institutional structure of the public sector is 
weak. This, for some, presents a reason to privatise. However, the 
consequent weak regulatory capacity could also be a reason for 
retaining water in the public sector.

In much of the region, the water sector, starved of investment from 
cash-strapped governments, is generally in a bad state of disrepair. 
Water privatisation is largely donor sponsored which means that the 
release of aid funds is often conditional on the privatisation of 
water (Grusky 2001). Water privatisation in SSA has always required a 
foreign investor but so far only a handful of companies have taken 
part in privatization tenders. The international dimension of 
privatization requires extra vigilance in regulation to monitor 
transactions between the domestic operation and the parent MNC.