The first two days of being back were more of an adjustment
than I was expecting. I was really jetlagged and missed my family and friends
at home, but I’ve gotten back into the swing of things here. Monday, I went to
the Embassy to apply for my residency permit. I am thrilled that I get to call
myself a legal resident of Ghana in a few weeks, once my paper work comes
through. Not that I am an illegal resident now, but once my permit is approved,
I will have an ID card and everything. Le-git.
After applying for my permit, I spent the rest of Monday
working on a powerpoint presentation. In one of my previous blog posts, I wrote
about a site visit I went to with Global Communities. USAID is one of the
funders of the project I went to see, so many people from the USAID office in
Ghana and in Washington came to the visit as well. I met Andy Karas, the Deputy
Director of the USAID mission to West Africa and have kept in touch with him
since. He extended me the opportunity to come and brief staff members at the
USAID office on my project and the research I have done to date. My
presentation was scheduled for Wednesday, so I spent Monday and Tuesday putting
together a powerpoint for it. The presentation went well. In addition to
briefing the team on my project, I had been asked to comment on the impacts of
tariff increases on the urban poor. This definitely wasn’t something I had any
prior knowledge of other than what I have heard in passing, so I looked up some
of the tariff proposals from the electricity and water companies in Ghana and
was pretty shocked by what I found. In Ghana, there is an agency called the
Public Utilities Regulatory Commission, or the PURC. Essentially, the PURC is
tasked with regulating and monitoring utility service providers to protect
consumer interests. They have other functions, which I will highlight later in
this post, but for all intents and purposes of this topic, their role will
remain just as their name suggests: a utility regulator. All proposals for
tariffs and tariff increases must be approved by the PURC before they can go
into effect. This year, the electricity and urban water companies proposed
tariff increases. For example, the Volta River Authority (VRA), one of the
electricity companies of Ghana, proposed tariff increases of 128%. The Ghana
Water Company Limited (GWCL), the company in charge of urban water provision,
proposed an increase of 112%. It is worth noting, however, that the PURC only
approved an increase of 52% in GWCL water tariffs. While there are some
differences in rationale of the proposed increases of the Volta River Authority
and the Ghana Water Company Limited, both institutions highlighted the
inflation/the devaluation of the Cedi (Ghana’s currency) as a driving factor. Since
water is my area of interest, I’ll focus predominantly on the GWCL proposed
tariff increase. In addition to inflation, the GWCL also proposed an increase
in tariffs as a way to elevate revenue generation, which would thereby be used
to increase operational efficiency and invest in maintaining and upgrading
existing infrastructure. In other words, what all of this jargon is saying is
that the GWCL is going to collect more money with the intentions of using that
money to ensure that water access to customers in the urban sphere have more
reliable access to water. At present, most of the country is on a rationing
system because the current production capacity does not meet demand. The latest
figures released by the GWCL, which was presented via a powerpoint at the 4th
Ghana Water Forum, showed the average daily water production is .708Mm³.
However, the estimated Aggregate Demand (from Domestic, Commercial, and Industrial
consumers) is 1.13Mm³. To put
this into perspective, the amount of water that needs to be generated to meet
current demand, but cannot be generated is more than half of current daily
water production. With population growth and competing water demands between
agriculture, households, industry and other generators of economic growth in
Ghana, the fact that current capacity is already so hampered is quite a
daunting reality. Moreover, I read an article just today detailing the findings
of a study carried out by the Water Research Institute of the Council for
Scientific and Industrial Research (CSIR-WRI). The study found that Ghana will
see a general reduction in annual river flows of 15-20% by 2020 and 30-40% by
2050.[1]
Recharge of groundwater will reduce between 5-22% by 2020 and 30-40% in 2050;
amidst these reductions in availability of supply, the demand for water for
irrigation purposes will increase by 40-150% in 2020 and 150-1200% by 2050.[2]
When one considers that surface sources are the main source of water for most
rural dwellers in the country and the national water strategy pushes for the
development of boreholes and other technologies for groundwater extraction as a
means of improving access to water in the country, these statistics are, for
lack of a better term, distressing. To
cope with present scarcity and the shortfall in supply, the GWCL services
customers on a rationing schedule. For example, water will flow through the
pipes in Community ‘A’ on Monday and Wednesday; Community ‘B’ on Tuesday and
Friday; Community ‘C’ on Thursday and Saturday, etc., etc. In theory, this is
supposed to be an effective system (well as effective as it can be given the
situation) because if a community knows when the water will flow, then that
gives them time to collect enough water to store it for use on the days that
the water doesn’t flow. However, today I learned through interviewing the water
director at the PURC, that the GWCL isn’t doing a good job of making the
rationing schedule known to the public, to the extent that people do not know
when the water will and will not flow. Financially speaking, it would appear
that tariff increases would do a lot to fix this problem. Currently, GWCL funds
are derived through the following means: the largest portion, $30 million,
comes from external funders; $2 million is provided through the government
(which is reportedly never released on time to the company); and $3 million is
generated internally (revenue collection by the GWCL, etc.)[3]
Official estimates from the GWCL state that the company needs $100 million (US
currency, not cedi) a year in infrastructure investment in order to achieve Millennium
Development Goal targets of 85% improved access to water countrywide.[4]
A total of $717 million is estimated to be needed to increase urban coverage to
100% by 2025.[5]
If one looks merely at the economics of the situation, then, yes, increasing
existing tariffs as a means of revenue generation for the company, which could
then be reinvested into the country’s infrastructure, would improve the
services received by customers currently. However, pure economics fails to
consider operational inefficiencies due to mismanagement of funds and poor
performance on behalf of employees. There are numerous problems with the
performance of the company in terms of revenue collection, such as not
collecting revenue on time (not always for lack of payment by consumers, but for
the lack of employees going and collecting it or charging consumers incorrectly).
Personally, I, and many other people I talk to working in the water
sector, don’t think tariff increases are going to solve the problems faced by
neither the GWCL, to improve urban water service, nor consumers. Until GWCL
improves upon the bureaucratic barriers that are impeding water delivery and
uses the money that is collected through revenue in existing tariff structures
for wise investments, then I hardly doubt throwing more money at the problem is
going to fix it.
In my research on
tariff adjustments, I learned that when Ghana was restructuring its water
sector in the late 1980s, the government approved a formula for an annual
tariff adjustment that would resolve some of these problems. However, the
formula was never applied due to political reasons and over the years, tariff
increases have been ineffective because they never result in the revenue needed
to remedy the problems. I think that the original reformed proposal has
potential. I hesitate to call it the end all be all solution to the problem
because for one, the formula would need to ensure that increases were adjusted
for inflation. Secondly, the GWCL would have to show that they were reforming
institutional impediments that are negatively affecting services to citizens. A
practical way to begin the process of such reforms is to first identify the
problems, which has been done by numerous policy documents and agencies
already, from the consumer level. Why not administer a survey amidst GWCL
customers where they can rate their current service level? Global Communities
employed such methods through the use of a community score card and found it
quite useful for evaluating existing projects and directing future projects. I
hardly think that consumers would be happy to have an increase in the amount of
money that they pay for their service when (1) their wages are not also rising
and (2) the level of their service delivery remains poor. I am interested to
learn more about the increases in tariffs and how they end up impacting
consumers while I am in Ghana. I anticipate that there is the potential for my
research to uncover how tariff increases on GWCL supplied water, mainly that
which is distributed through tanker trucks and other water service vendors, is
impacting the population I will be working with.
So after briefing the team on my research to date and tariff
increases, I took some time for comments and questions at the end. The comments
that were made were in regards to looking at non-revenue water and GWCL
efforts, a gender perspective on water access and different coping strategies,
as well as the roles and functions of CONIWAS, a coalition of national and
international organizations working in Ghana. All of these are great
suggestions and I will consider as many of them as possible, but the honest
truth is that there are so many issues that deserve investigation, both in the
urban and rural spheres of the water sector in Ghana, but I can only do so much
in the limited time that I am here.
The following day, which was on Thursday, I went to the PURC
office in Accra to conduct some interviews. I had met Francis, who is a
complaints officer at the PURC, at the Water Forum in October, so I called him
and he graciously agreed to meet with me. As a complaints officer, Francis
essentially acts as a liaison between urban consumers dissatisfied with their
service and the GWCL. As I was learning
of the organization of the PURC and the process of filing and dealing with
consumer complaints, I began to realize that this was just the mere beginning
of unraveling a very complicated procedure. To begin, the PURC differentiates
between consumers and customers. Everyone is a consumer, but not everyone is
considered a customer. A customer is someone with a GWCL connection, which also
means that they have to have titles to the building or home where the piped
network in question is. Customers also have to have a water meter, which
measures volumetric usage of water and is used to determine billing amounts. Francis
only deals with complaints lodged by individuals who fit the description of a
‘customer.’
Essentially, as a utilities regulator, the PURC is only
mandated to regulated services of urban customers, which boils down to those
connected to the GWCL piped water networks in the city. When I learned this, I
asked Francis what happens to those water consumers whose main supply is
provided through secondary and tertiary providers, such as water vendors and
tanker trucks. Francis told me that there is another department at the PURC
that deals with such problems, which led me to my second interview that day,
but more on that later. Continuing with our interview, I asked Francis about
the general procedure for lodging a complaint. To file a complaint about water
service, a customer can either call, write to, or walk in to the PURC office.
They then provide their basic contact information and details of the problem. From
there, the process of how the problem is resolved, and how quickly it is
resolved for that matter, depends on the nature of the issue. The PURC will
first contact the GWCL to make them aware of the issue, then a formal complaint
will be lodged. When I asked Francis the average amount of time it takes to
settle a dispute, he told me roughly 1 to 2 months. However, under government
law, disputes are supposed to be settled in no more than 5 working days from
the time they are lodged by a customer or the PURC on behalf of the customer.
Clearly, there is something wrong with this picture. On the upside, the GWCL
cannot disconnect a customer’s water connection while the dispute is in the
process of being resolved. Moreover, if a customer is dissatisfied with the
response of a service provider or how they propose to settle a dispute, they
have the right to reject this response and reinstate the process from the
beginning, BUT, the customer must state the reasons for their rejection of the
proposed solution. I then proceeded to ask Francis about some of the most
common challenges or complaints that consumers approach him about. He listed
the following:
·
GWCL Officers will bill a customer for more than
the meter states the customer has actually consumed
·
The GWCL will disconnect customers, claiming
that they have not paid their bill, when in fact the consumer has paid
·
The GWCL will present customers with a bill for
the year, rather than on a monthly basis (monthly billing is supposed to be the
standard operating procedure). This is problematic because when a consumer is
billed for the year, rather than on the monthly cycle, they are charged using
both block tariffs, and therefore have to pay more. According to Francis, the
current tariff structure is as such: a consumer pays a fixed price for
consumption of water between 0-20,000 liters; there is then a different price
fixed for water consumed that is 20,000 liters and above. In one year a
household is obviously going to use more water than they use in a month, so the
amount that they are charged does not reflect a fair price under existing
tariff structures.
When I heard about these problems, I was in shock. I mean I
have read policy documents and other academic reports detailing the
inefficiency of revenue collection by the GWCL, but I have never heard of these
issues. It is completely unjust. Moreover, the amount of time it takes to fix
any dispute is just unacceptable. Allow me to provide an anecdote to illustrate
my case in point. When speaking with Francis, he procured the documents of a
complaint that was lodged recently by a customer. In late September, on the 26th
to be exact, a customer who receives water through the GWCL in Accra East came
to lodge a complaint. At the time the complaint was made, the water had not
flowed through the pipes in the man’s homes for three weeks. In the document,
the PURC stated that an inspections officer from the PURC went to the home of
the man to investigate the problem. The inspection was made in early November;
by mid-November, the problem was still not fixed. The customer, who at the time
was in China on business, made a call to the PURC from China to complain that
his family at his estate in Ghana were still not receiving water. The day prior
to my interview with Francis, which was December 4th, the man
requested the GWCL send an investigations officer because his tap still had not
produced water. Three months after the original complaint was lodged, the man
and his family still did not have water in their home. The questions in my mind
are many about how this could possibly be the case, but the one I would like to
raise here is the following: now this is an assumption of the man’s
socio-economic status based on the fact that he was in China on business and
had the means to place an international call, first to his family to check on
the status of the problem, then to the PURC to lodge another complaint from
China, but I find it a safe one to make considering the average Ghanaian does
not travel abroad frequently for business, nor tourism: if service delivery is
so fickle in the home of a middle to upper class Ghanaian, living in the
capital, and the resolution of the problem takes so long, how different is this
same situation in communities where the average per capita income is lower? I
mean I think everyone knows the answer to this (it’s a worse situation), but
the question beckons: how much of the way the current system functions is due
to considerations of political economy (political allegiance to the party in
power ensures water access to a specific area; areas closer to government
officials and governmental residential areas receive better water services than
others, etc..) rather than mere socio-economic conditions of an area? How and
where do local governance structures fit in to the picture? Along these same
lines, how much do these factors impact the rationing schedule I mentioned
earlier in this post and its publication to the beneficiary communities?
My interview with Francis was very helpful and I felt that I
learned more from the hour or so that I spoke with him, perhaps than I had over
the course of the few weeks I have been sporadically reading policies. The
information I gathered from Francis then led me to meet Kwabena, who is the
water manager at the PURC. I wanted to follow up with Kwabena about the gap
revealed by Francis in managing complaints procedures; while Francis and his
team address concerns of urban consumers receiving services through GWCL piped
networks, who is addressing the concerns of those outside of this purview? To
my understanding, and indeed the whole premise of my Fulbright proposal, it is
consumer associations who are tasked with this, but so far, these groups had
not been mentioned in any discussions I had with Francis or other water sector
professionals. I was hoping Kwabena would be able to resolve my confusion.
When I asked Kwabena about the consumer associations that
were supposedly established by the PURC, I learned the following: at the PURC
level, there is the Consumer Services Directorate, which was technically the
department where Francis works. Then, at the district, regional, and community
level, there are smaller, more localized consumer services associations. Kwabena
then told me that for those consumers who rely on tanker trucks, water vendors
and other tertiary service providers, there are different organizations tasked
to deal with their complaints. If a customer has a problem with water from a
sachet or a bottle, they lodge a complaint with the Food and Drugs Authority.
This is because all water that is packaged is supposed to adhere to quality
standards under the Ghana Standards Authority and once water is packaged, it
falls under regulation of the Food and Drugs Authority. Those who have
complaints about their water from tanker services can go to the PURC to
complain. However there is a Catch-22 to this: the PURC only handles complaints
from those whose water comes from a tanker truck where the tanker has derived
the water from a GWCL filling station. For those who receive water from a
tanker truck that uses a source outside of GWCL filling stations, there is no
person or organization within the PURC that handles these complaints.
Essentially, these consumers are on their own. Kwabena told me that this is
because the PURC does not regulate tanker trucks. While the PURC has
established tanker truck guidelines, which regulate water quality only, there
are so many tanker trucks that are filling the supply gap in Ghana that they
are difficult to regulate. Quality regulations focus on the cleanliness of the
tank the water is being transported in and whether the vehicle is appropriate
for transportation. There are no regulations in place for tariff and pricing
schemes because much of the price that is charged is calculated based on the
distance the water must be transported from source to the customer. As the PURC
doesn’t trace the water to its source if it is not from a GWCL filling station,
regulating the price of water by these tankers just wouldn’t be possible. The
PURC tries to encourage trucks to join tanker associations to make regulation
easier and more feasible, yet membership in such associations is purely
optional, not mandated, so regulation cannot be guaranteed. Kwabena also told
me that it is also difficult to regulate tankers outside of the GWCL network
because many people are drilling their own boreholes, pumping water from the
borehole to tanks, then distributing this water to consumers outside of the
GWCL network. This is not only disturbing from regulation and consumer services
standpoints, but also from a management standpoint. Note the article previously
mentioned in the article. There are no restrictions or limits on the amount of
water that can be pumped from these boreholes. Assuming that they are
high-yielding, which is a common challenge for water provision through the use
of boreholes in Ghana, then the user will need to be frugal with the rate at
which he derives water from the borehole in order to prevent the depletion of
groundwater and ensure a sustainable supply of water.
After speaking with Kwabena and Francis, I feel I have a lot
more clarification of the problem which I am investigating and it made me that
much more eager to schedule more interviews and read more policies.
After a productive two days, Friday was Farmer’s Day, a
national holiday, so I decided to take the day to take an art lesson and visit
a friend. The following day I caught up with Bri, who works for CWS. I hadn’t
seen her since I was in Ghana last December, so it was great to get to get
caught up with everything that has been going on in each others’ lives over the
past year.
This week I am in Kumasi. I have two interviews scheduled
with people working in the GWCL and PURC here. I am also going through the
process of finalizing my accommodation for next month, as well as looking into
Twi lessons, French lessons, art classes, and the best way to go about hiring a
translator once I get into the field work portion of my research. It is going
to be quite a busy week, but Brent will be here on the 21st and we will be
touring the country for the ten days that he is here, so I am looking forward
to it.
That’s the short of things here. Until next time,
Chelsea
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