Private sector participation in rural water and sanitation service delivery in Uganda : a case study in four districts

Private sector participation is a policy which involves government divesting itself, wholly or partially, of direct service delivery. This is in line with the reforms advocated in the IMF-funded Structural Adjustment Programs (SAPs). In Uganda the reforms were adapted in the 1980s, a time when the country was emerging out of political and economic turmoil due to wars and civil strife. The reforms have proved successful there, leading to increased support of the reform process and policy development in general with Highly Indebted Poor Countries (HIPC) /debt relief funds. Uganda has received more funding as a result of its good performance linked to the Government’s commitment to channelling all the HIPC funds into relevant poverty alleviation programmes. In total the country has received $2 billion for its anti-poverty programme since 1998. Many of these funds have been conditional on the implementation of private sector participation (PSP), which has improved efficiency and access to services in the water sector. An additional 913 people were connected to water supplies every day between 1998 and 2001 and the total rural water coverage increased from 39% in 1997/98 to 52% in 2001/01. However, the implementation of the private sector participation policy has introduced certain issues that could in the long run undermine the sustainability of the process and the implementation of the Poverty Eradication Action Plan (PEAP), the pillar of Uganda’s development strategy. WaterAid therefore advocates that the limitations of private sector participation in the water sector should be discussed early enough to allow time to forestall or ameliorate the negative impact on Uganda’s anti-poverty and anti-corruption policies. WaterAid has carried out a case study to support its assessment of the private sector participation policy as described in the rest of this paper. [authors abstract]