Tracking water governance impacts: an example from the Kenyan water sector

ABSTRACT

In 2015, the Kenyan Water Services Regulatory Board (WASREB) introduced a corporate governance indicator for the Kenyan water sector to measure the extent to which water service providers contribute to enhanced sector performance and the realization of the human right to safe drinking water and sanitation. An assessment shows that a utility that performs well on governance is very likely to perform well on the nine key performance indicators. Overall, the governance indicator serves to inform the public and guide utilities to improve their governance. It also provides guidance to partners and development institutions which may support the utilities in the future.

KEYWORDS:

• Water governance indicator
• utility performance
• OECD Principles on Water Governance
• human right to safe water and sanitation
• Kenya

Acknowledgements

We would like to express our great appreciation to Richard Cheruiyot, Director for Monitoring and Enforcement at the Water Services Regulatory Board (WASREB) for his invaluable contribution to this paper, and dearly thank Philipp Feiereisen and Dirk Schäfer from GIZ for their continuous support and constructive feedback.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Good corporate governance entails that the processes of disclosure and transparency are followed so as to provide regulators and shareholders as well as the general public with precise and accurate information about the financial, operational and other aspects of the company (WASREB, 2018b).

2. This law was repealed by the Water 2016 operationalized in April 2017.

3. Since governance is very difficult to measure, WASREB’s governance indicator is a proxy indicator that uses various sub-indicators of interest that point to the level of compliance of a water utility with the set rules and standards.

4. The IMPACT is WASREB’s main tool for public reporting and it documents the performance of Kenya’s water services sector over a given period. The report is meant to spur comparative competition in the sector, thereby creating impetus for institutions to improve their performance.

5. The six sub-indicators were tailor-made for the Kenyan water sector in line with WASREB’s corporate governance guidelines, the Constitution of Kenya and other legislative documents that govern the Kenyan water sector (WASREB, 2016).

6. The GIZ Water Sector Reform Programme was a well-established project that had begun its operations in 2003 and ended in 2018.

7. The following nine utilities were selected: Nyeri Water and Sewerage Company Ltd, Kisumu Water and Sewerage Company Ltd, Nanyuki Water and Sewerage Company Ltd, Eldoret Water and Sanitation Company Ltd, Nakuru Water and Sanitation Services Company Ltd, Nairobi City Water and Sewerage Company, Kirinyaga Water and Sanitation Company Ltd, Kakamega–Busia Water Supply and Mombasa Water Supply and Sanitation Company Ltd.

8. The governance indicator did not attempt to replicate the assessment on service delivery on the nine key performance indicators (KPIs) published in the 8th IMPACT report. Instead, the results scored on governance from the selected utilities were compared with those in the nine KPIs.

9. The determination coefficient (R²) was 0.65, indicating that 65% of the data fit the regression model. However, causality was not tested.