Harnessing entrepreneurship in the water sector: expanding water services through independent network operators

Abstract

Most water utilities in Africa struggle to serve even half of urban households falling under their mandate. Peri-urban districts and small towns fare especially badly; a widening gap is developing between the services offered by utilities and demand (fuelled by rapid population growth and urbanization). Typically this gap is filled by small-scale operators, many independent of the utility. Yet the risks these operators run are great - despite making significant investments, most are informal, and many are technically illegal. This paper focuses on one type of operator - those that invest their own funds in independent networks. Independent operators who work in perurban areas, often under the shadow of a public utility, are distinguished from those working in small towns, where the utility is not in evidence. Findings show that these operators are able to be innovative in the technical and financial arrangements of supplying to poor people, thus keeping down their charges. To improve their operation, interventions are suggested that can be brought about without major policy changes, and some changes that involve policy change.