Empirical Assessment of the Impact of Power Sector Reforms in Africa: A Study of the Generation, Transmission and Distribution Sectors

Abstract

This paper is based on a research study which was carried out, to empirically assess the impact of power sector reforms, comprising privatization, competition and regulatory reforms in 29 African countries, for the period 1988–2005. The list of countries in the research sample is shown in Appendix 1. The main findings for the generation sector is that, in Africa, though energy sector regulation backed by sector law can bring about favorable outcomes, better results are likely to be achieved if the regulatory agency has been in existence for at least 3 years, and it co-exists with either competition ‘for’ the market or private sector participation. On private sector participation, the presence of Independent Power Producers, management contracts and private shareholding in generation assets, can enhance generation sector performance. The results on the transmission system seem to indicate that though the establishment of a regulatory agency can reduce transmission system loss level, this outcome is likely to be achieved if the regulatory agency has been existence for at least 3 years. On distribution system loss, it emerged that the sole existence of a regulatory agency may not be enough to influence a downward trend in distribution system loss level, unless the market, permits the co-existence of competition ‘for’ the market, with a regulatory agency.