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Environment Magazine September/October 2008


April 2007

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Providing Basic Utilities in Sub-Saharan Africa: Why Has Privatization Failed?

Since the mid-1980s, external donors have been encouraging governments in sub-Saharan Africa to privatize basic utilities such as water and electricity. However, after a couple of decades of such efforts, it is clear that privatization has met with widespread failure. This has hampered progress on the United Nations’ Millennium Development Goals (MDGs) for water and sanitation and on many other MDGs dependent on energy.

Privatization has failed on several counts. Contrary to expectations, private investors have shied away from investing in water and electricity utilities in the region; therefore, it has been costly for governments to motivate them to invest. Moreover, the focus of investors on cost recovery has not facilitated the achievement of social objectives such as reducing poverty and promoting equity.

Thus, current realities dictate refocusing on building up the capacity of the public sector, which continues to dominate the provision of water and electricity and will do so for the foreseeable future. But a dramatic scaling up of external and domestic resources will be needed to finance more extensive public investment in these sectors. This approach is consistent with the current priority of adopting more ambitious MDG-based development strategies in the region.

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