Political Economy Analysis of Rural Water Performance Under Different Management Arrangements in Ghana

SUMMARY

We conducted a political economy analysis (PEA) to identify how electoral politics, political patronage, macroeconomic factors, and donor preferences, among other factors, influence rural and small town piped water supply development and performance in Ghana. This PEA complements a quantitative study of rural water supply performance in Ghana. Both our quantitative study and this PEA focus on three rural water supply management arrangements:

• Public utility provision via Ghana’s Community Water and Sanitation Agency (CWSA);
• Community-based management (CBM) via small town Water and Sanitation Management Teams (WSMTs) that are supported by local governments (Metropolitan, Municipal and District Assemblies, or simply District Assemblies); and
• Donor-supported Safe Water Enterprises (SWEs) operated by social enterprises on market principles but supported by external aid.

Between February and April 2023, we interviewed 45 key informants at the national, Service Authority  and service provision (water facility) levels in Ghana using a common framework, followed by a coding of informant responses and analysis. We define a Service Authority as the institution(s) with the legal mandate to ensure that water services are planned and delivered. Service authorities are usually, but not always, equated with local government, and are not necessarily involved in direct service delivery themselves (although they may be in some cases) (Lockwood and Smits 2011; World Bank Group 2017). In the case of Ghana, the Service Authority for all management arrangements is the District Assembly, as defined by the Local Governance Act of 2016, Act 936.  However, for CWSA and donor-supported SWEs, some of the service authority roles are assumed by internal structures, such as financial and technical support provided by regional and national CWSA and SWE offices.

RESULTS

We assessed the influences of political economy factors on piped water scheme performance at three levels, as summarized below.

National

At the national level, systemic factors affecting water supply performance include a perceived lack of clarity in policy and legal instruments that govern the water sector. Most important with respect to this lack of clarity is the de facto transition of the CWSA from its historic role of facilitation and oversight into a small town and rural service provider. CWSA initiated this transition in 2017 as a component of proposed policy reforms for the rural water and sanitation sector aimed at professionalizing management arrangements. These proposed reforms received Cabinet approval in 2019 and were incorporated in the revised National Water Policy of 2024 that was officially launched in August 2024. However, legislation that defines operating and regulatory structures for CWSA service provision has not been established. Other national level factors affecting water supply performance include inadequate public and private sector financing, the absence of effective regulation of service quality and tariff setting, and a decline in donor funding.

Service Authority

Cited factors at this level of influence include fiscal decentralization, which results in limited support to Service Authorities to enforce their mandate for delivering rural water services. In addition, we note the absence of effective regulation of the rural sub-sector, resulting in variable service quality and tariffs charged by different types of providers. Cultural factors, including views on the value of water and intra-community dynamics, were also flagged as an important barrier to payment for services in rural areas, although there are signs of a shift in these views in favor of payments for good service. The influence of politicians and traditional leaders is seen as limiting the ability of service providers to manage water facilities independently, including interference in tariff setting, elite capture and rent seeking behaviors. Political interference is viewed as having a disproportionate impact on WSMT arrangements. This is due to several underlying causes including the more informal governance arrangements for WSMTs, lack of oversight or regulation from the District Assemblies and party political dynamics. In a smaller number of cases, external actors, including politicians, are viewed as positive and contributing to solutions through provision of financing or resolving community conflicts. A further positive factor is the role of the media, and specifically radio, which is seen as having an important influence on the attitudes of consumers and decision-makers: i.e., reporting on water services indirectly contributes to improved performance across all management types.

Service Provision

Political economy factors highlighted at the service provision level include the lack of support provided by District Assemblies for WSMT arrangements, largely due to lack of funding, low technical staffing, and logistical constraints but also include a low priority for rural water. Most of the WSMT arrangements reported relying on support from sources beyond the District Assembly, including non-governmental organizations (NGOs) and local politicians. Other factors including cultural views and social behaviors within the community can harm management performance. A commonly cited issue at this level was the presence of alternative, lower-priced or free water sources from informal providers and charities or religious groups, which affects all three management arrangements. Internal social pressures and dynamics between different user groups and traditional leaders or local elites were also flagged as compromising performance, particularly for WSMT arrangements. Several infrastructure-related factors also emerge as important, including the selection of contractors and the cost of electricity, both of which are cited as major concerns affecting all management arrangements. Finally, challenges with availability and the cost of spare parts are viewed as more problematic for WSMT arrangements.

DISCUSSION

The most important political economy forces are captured in the four main findings together with suggested priority actions. We recognize that many of these actions are long-term in nature and will require strong sector leadership to achieve. It is also important to note that there are significant costs and tradeoffs in supporting certain actions against a backdrop of finite resources in the water sector and government budgets more widely. In particular, extending regulatory arrangements to the rural water sub-sector and improving the capacities of the District Assembly departments that support WSMTs would be costly. Perhaps most pressing is the question of the transition of CWSA into a rural public utility. Support for this organizational shift will likely result in less government support for WSMT arrangements. Ultimately, these are political decisions as much as they are technical.   

1. A political vacuum in Ghana’s rural water sector at the national level is driving fragmentation that may inhibit investment, regulation and effective water resource management. Without greater attention, development partners may be contributing to this fragmentation.  We identified an apparent lack of political authority and institutional leadership within the sector, particularly around the reform process. Much of the momentum behind CWSA’s shifting role has been propelled by that same agency, rather than the Ministry of Sanitation and Water Resources, which is the apex body in the sector. This situation has resulted in ambiguity regarding where and when to prioritize different management arrangements, how to coordinate asset ownership and transfer, and how services should be financed. Unregulated expansion and competition between the various management arrangements – WSMTs, CWSA and donor-supported SWEs plus an unknown number of informal private providers – is likely to further fragment the sector and facilitate an effective ‘free for all’ allowing different management arrangements to be promoted by interested parties. It is likely that the loser in this scenario will be – and some would argue already is – the WSMT arrangement, particularly those managing point sources. Under-resourced District Assemblies and a distracted CWSA, particularly in the context of dwindling donor funding, will be increasingly unable to support WSMTs.

2. Current trends undermine the community-based management arrangement. Support for the community-based WSMT management arrangement from CWSA is decreasing as it focuses on its new role of direct service provision. Many District Assemblies have also experienced declines in financial support for water services as aid funding to the sector has declined and there is inadequate public financing to make up the shortfall. The accountability balance between WSMTs as service providers and District Assemblies as Service Authorities is also decreasing. All management arrangement types remain vulnerable to political interference, but WSMTs are viewed as being far more vulnerable and less insulated than CWSA as a public utility and donor-funded SWE arrangements. This vulnerability is linked to various factors: for example, the limited levels of regulation and oversight means that tariff setting remains a politicized process, particularly for WSMT arrangements and has the knock-on effect of reducing the financial viability of schemes.

3. District Assemblies have insufficient capacity, resources and incentives to act as the Service Authority for all management arrangements, particularly the WSMTs. In theory, the constrained abilities of District Assemblies to fulfill their roles as Service Authorities should extend to all management arrangement types. However, the biggest loser in terms of insufficient support is consistently perceived as the WSMTs. Although there are some cases of support being extended to CWSA and SWEs, these are the exceptions. Further, the lack of District Assembly engagement with WSMTs removes a layer of accountability and makes this management arrangement especially vulnerable to interference from local politicians and traditional leaders.  

4. Limited influence over contractor selection, poor infrastructure quality, and increasing energy costs are compromising District Assembly efforts to oversee and support water services.  The selection of contractors and the quality and integrity of these actors is of critical importance to the construction of water supply infrastructure and can have significant, long-term impacts on performance and operation and maintenance costs. District Assemblies have a role to play in construction oversight and supervision but are often bypassed when contractors are assigned by non-state actors or through central government procurement mechanisms. The high costs of electricity pose challenges for all management arrangement types, but the effects are reduced for water systems that are not entirely reliant on the national grid.

This report was part of the Rural Evidence and Learning for Water (REAL-Water) project, which was supported by a cooperative agreement between the United States Agency for International Development (USAID) and The Aquaya Institute. The contents of this post are the sole responsibility of The Aquaya Institute and do not necessarily reflect the views of USAID or the United States Government.