Month: February 2025

This article serves as a continuation (Part 2) of the Hydra Headed Challenges of the Proposed Privatization of the Electricity Company Of Ghana (ECG)  an Op-Ed, delving deeper into the topic, expanding on key insights, and addressing additional perspectives to provide a more comprehensive understanding.

11. Impact on the Government’s 24-hour Economy Strategy

One of the Government’s flagship policies – the 24-hour economy is yet to be fully rolled out.  So far, it has gained interest and also been viewed with skepticism in some quarters. Obviously, businesses who opt to run around the clock operations will require around the clock stable power supply. Will the tariff policy of a private sector ECG take the 24-hour economy into account? Will the tariff be designed to encourage the adoption of the 24-hour economy by selected businesses so that they are encouraged to operate around the clock as a result of deliberate lower tariff at low peak periods?

12. Multiple Prepaid Meters

There are a multiplicity of prepaid meters currently in use by ECG customers and in recent years, ECG frequently introduced “new meters” almost at will. What will the harmonization strategy be? Will the end-user have to continue with this or will there be a metering uniformity approach? Will any harmonisation measure result in cost to the consumer?

13. Will ECG’s Assets be Disaggregated Between “Core” and “Non-Core” Assets?

ECG possess assets (asset such as “spare land”) that may not necessarily be required for the operations of a utility entity.  Will the company’s assets be segmented and if so, will there be a “non-core assets” category that GoG may auction to earn some income to offset any accrued debt it will absorb?

14. A History of Failure of State-Owned Enterprises (SOEs)

In the late 80s and early 90s, quite a number of statutory corporations (ECG being one of them) were converted into private limited liability companies. The expectation at the time was that these SOEs (apart from those subsequently divested to the private sector) will be run as private sector corporate entities and make profits. The case of ECG is very similar to that of many other SOEs – it has become more indebted as a limited liability company than it was when it was a statutory corporation. On the other hand, other electricity distribution companies managed by the private sector (e.g. Genser and Enclave Power) must obviously be making profits otherwise, they would not have attracted private sector investments. The lesson is that it is not whether the entity is owned by the state, it is whether it is properly managed as a business. How will the privatization approach ensure that the private sector operator does not make ECG a more indebted entity?

     15. Transfer Pricing Prevention and Dividend Strategy

There are numerous examples of entities in which Government hold shares but for which Government earns no dividends and ends up being saddled with debt.

If GoG retains equity, what will be GoG’s position on dividends as a condition for sale? Will there be a mandatory dividend policy? Will there be benchmarks or cost parameters modelled in a manner to ensure GoG can forecast dividends after a specified period (when ECG becomes profitable). Can such dividends be drawn down ahead of the end of year financial statements?  Can GoG borrow against such projected dividends?

16. Compact with USA Millennium Development Authority (MIDA), Millenium Challenge Corporation (MCC)

Will GoG receive any grant for ECG aspects under Ghana’s second Compact with the USA (focused on the power sector “Compact”)? Will there be additional capital expenditure incurred by the Government? Will the new government of USA continue with the Compact? What will be the implication of either scenario?

17. Impact of Access to Electricity

Since the GoG has a policy to increase citizens’ access to electricity, especially in deprived communities, how will this be achieved in a commercial led ECG operations?

18. Separating the Wheat from the Chaff

How will Government set parameters to separate serious bidders who have the technical and financial muscle from those who are just adventurers seeking transactional opportunities? Naturally, there may be “middlemen” who may parade the appropriate corridors – how will GoG minimize this and ensure there is greater transparency in the process?

19. Requirements to List on the Ghana Stock Exchange (GSE)

Will the new owner be required to list ECG on the GSE in order that ordinary Ghanaian can own shares and if so, will there be a requirement to list a specified percentage of the equity (in order to retain a percentage of dividends in local currency)?

20. Local Content and Growth of Private Sector

There are a number of “local content” related issues that must be factored into the process.

• There is an assumption that Ghanaian entities do not have financial wherewithal to take over a company like ECG.  This may be true but there are other areas of already deepening local participation which can be further deepened.

How will the framework ensure that the private entity purchases inputs (e.g. cables and meters) from local suppliers?  Without such arrangements, purchase from sources outside Ghana could adversely affect local players especially because ECG is a near monopoly.

Examples include:

• Supply of cables (Nexans Kabelmetal Ghana Ltd., Reroy Cables Ltd, Tropical Cable & Conductor Ltd., etc. )
• Manufacture of meters and transformers (e.g. Alpha TND Ltd., Westrafo Gh Ltd, Ghana Electrometer)
• The marketing and sale of credit to the final consumer can be separated from distribution.  If this is done, will the marketing and sale be reserved for local vendors and if yes, how will these vendors be selected by the foreign-led entity in a transparent process without politically exposed persons leveraging their influence to lodge themselves into the chain?  Presently, the Energy Commission License Manual provides for separate licenses for distribution and sales so it may be important to indicate how the private entity will be given both licences.
• Further, how does GoG seek to achieve the over ambitious local content targets set out in the Local Content and Local Participation Guidelines issued the Energy Commission.

21. Potential Impact on GoG’s Industrialization Agenda

The Government has expressed its intention to pursue a value addition strategy. Already, many manufacturers claim they have been struggling to remain competitive as a result of the high cost of capital and high cost of utility. No country can industrialise if it is selling power to strategic industries for more than $0.06 per KWh (Ghana is selling above that price).  Since a private sector led ECG will naturally be profit driven, what strategy will GoG use to balance the cost of power to industry (and the need to lower tariff to selected industries) in order to achieve the industrialisation objectives?

22. How will it Affect the Integrated Aluminium Industry

The potential of the integrated bauxite to aluminium sector as a game changer is well known.  Whereas parts of this industry (e.g. VALCO and potential refinery) will remain bulk purchasers in the deregulated market (and will not rely on ECG), allied industries further downstream (e.g. entities involved in aluminium based fabrication of household items) will need ECG. It is therefore important that the privatization of ECG is not considered in isolation since these downstream industries are major job creators.

23. Climate Change, “Legacy Hydro”, Power Source Mix and Matters Arising

Recently, a lot of finance which goes to the power sector are designed to achieve green transition objectives in order to attract climate finance.  This trend is likely to impact the sources from where a private sector led ECG procures funds for future investment. The ability to attract financing will also depend on the sources from which ECG gets its power to distribute.

Is there going to be a conscious policy on the power mix so that overtime (and in line with Ghana’s energy transition policy) the selected operator will increase the renewables component of the power mix that it distributes?

• There are already allied measures such as the Renewable Energy Fund which has not been funded – how will the fund be populated and will ECG be required to increase purchases from renewables?
• Net metering from household solar users– will the private sector entity be required to continue the net-metering arrangement and which incentives will GoG give to encourage private operators to continue with climate friendly net metering arrangements?

24. Legacy Hydro and Volta River Authority (VRA)

How will GoG leverage the advantage of the comparatively low generation cost from its Akosombo Dam (which is essentially a “legacy hydro” asset) in order to create a mix that enables GoG to provide targeted industry friendly tariff.

25. Board Appointees

If the Government has representatives on the board how would these representatives be chosen and how do they ensure that Government interests is protected at all times? What reporting mechanisms will GoG put in place to ensure the requirement in Ghana’s Public Financial Management law for government representatives to report to the Ministry of Finance is complied with (currently it is more flouted than obeyed).

26. Leveraging Ghana’s Position in the Trajectory of the West Africa Power Pool (WAPP) to Make Ghana an Energy Hub

Ghana’s location gives it an edge to become an energy hub in the WAPP trajectory.  Perhaps with the right policies ECG can be transformed into a major power exporter to anchor Ghana’s power hub strategy. How will GoG align the privatized ECG operations to increase export to the West Africa sub-region through an enhanced distribution network under a power hub strategy?

27. Public Utilities Regulatory Commission (PURC) Role and the Proposed PURC Integration into the Energy Commission

Under the previous government, there were suggestions about merging the tariff regulator (PURC) with the Energy Commission (the sector regulator). Will the current Government pursue this and if so, how will this affect the independence of the tariff regulator especially in a private sector ECG?

28. Potential Impact of InternationalMonetary Fund (IMF) Programme

To what extent will assumption of ECG’s accrued liabilities make Ghana’s debt stock any worse and how can the potential impact be minimized?  Will this affect any re-negotiation with IMF in the current programme and if so, will it lead to policy changes that will lead to the assumption of higher risks by investors or cause policy inconsistencies?

29. New Investment Asset Class?

What benchmarks will the new owners be required to meet to develop ECG and its power distribution mandate into new asset class for which the investing public will be interested?

30. Impact on NEDCo and GRIDCo

Some indirectly related (but nevertheless relevant) questions will naturally pop up in the minds of potential investors so these must be thought about by policymakers.  Examples include the following:

• If the ECG privatization model is successful, will the model be replicated for Northern Electricity Distribution Company (NEDCo)? [Apparently,   there has been a very recent assessment of the lapses in NEDCo’s invoicing practices which was carried out by a very experienced power sector consultant and a lot of lessons may avail the new Minister on this].
• Will VRA and Ghana Grid Company (GRIDCo) be next in line? Irrespective of whatever happens to ECG, will GRIDCo’s operations be split between the infrastructure and operator roles to deepen private sector role in the transmission operations?
• Independent system operator – will an independent transmission system operator be appointed for GRIDCo?
• Transmission losses – it has been reported that ECG experiences transmission losses which adds to its costs. One report indicates transmission losses is about 20%. How will it be ensured that the losses are minimized and the cost is not passed on to the consumer?

31. External Pressure

How will GoG manage “external pressure” especially geo-strategic soft power – it is generally assumed that some public sector decisions are subject to such external pressure for geo-strategic reasons. How will GoG balance this vis-à-vis technical, commercial and Ghana’s own economic transformation strategy?

32. Redundancy And Matters Related To Labour

PUWU has already expressed its reservations about the privatization.  This is not surprising because privatization always encounter workers’ resistance.  How will this be managed in order not to send wrong signals of potential risks to investors? How will potential cost related to redundancy be handled? What labour rationalization strategies will be adopted to minimize cost repercussions – such as redundancy and social cost of any layoffs?

33. Public Perception and Issues Bordering on Transparency

How will public trust in the transparency of the privatization of ECG be built? – public goodwill will be necessary for the future operation.

The Government of Ghana (GoG) has signaled its intention to return to the privatization of Ghana’s power distribution utility company (ECG). There are currently no details as to how this will be done. For several reasons, however, any mention of the privatization of ECG immediately triggers public interest. This is not just because of the opposition to the process expressed by the Public Utility Workers Union (PUWU) of the Trades Union Congress (TUC) but also because of other antecedent issues including the recent Power Distribution Services (PDS) scandal (which happened during the last incarnation of ECG privatization). Accordingly, whatever approach the Government uses, the issues that it will face will be numerous extending beyond the electricity sub-sector. [In an earlier paper my colleague, Ferdinand D. Adadzi wrote on some of the legal issues that arise in the context of Ghana’s PPP Act, Act 1039].

This Op-Ed is not meant to debate whether ECG should be privatized or not. It assumes the privatization will go ahead. It only seeks to draw attention to some of the multiple issues that must be well examined in advance of the start of the exercise. Among other things, the goal of this Op-Ed is to help focus public discussions away from the usual political divide. It is the hope of the author that the issues mentioned in this Op-Ed, will help steer the public debate past the usual political lines of “for” and “against”.

Unintended Impact of Problem Solving

Obviously, the proposed privatization of ECG is meant to solve some perennial problems including but not limited to the high level of indebtedness.

The author holds the view that, in any attempt to find a solution to a problem, it is important to ensure that the solution itself does not trigger more problems. Particularly, in the case of ECG, there are chances that the privatization will impact other national and strategic goals during or after the privatization. Whilst this Op-Ed is not intended to provide a detailed analysis or solutions, it is meant to get the public and policy makers to bring most, if not all critical issues into the equation, ahead of concluding on the approach to privatization.  Hopefully, this will also help reduce the politicization of an otherwise technical and strategic exercise.

1. Accrued Liabilities and Matters Arising

It is anticipated that for the privatization to be attractive to the private sector, GoG will absorb the accrued debt of ECG as private sector operators are not likely to be interested in assuming responsibility for prior liabilities. The critical question, therefore, becomes – how will the debt be ring-fenced and retired by GoG over a defined period? Further, since ECG’s debt will continue to accrue interest after the privatization, will there be a freezing strategy on the debt to ensure it does not worsen GoG debt profile?

Whilst absorbing the liability, how will the Government take account of previous loans to ECG (GoG on-lending) – will it capitalize any yet to be amortized on-lending?

2. The Potential Ripple Effect of Electricity Tariff

Like any public utility, the distribution of electricity has immense social and economic impact with its inescapable ripple effect. For example, higher tariffs impact livelihoods, add to the cost of doing business and trigger inflation. The privatization strategy must, therefore, come with a multifaceted tariff strategy within which the private sector proponents may operate. Without a clear Government tariff strategy, the natural disposition of the private sector will be to minimize cost, recoup investment quickly and maximize profit. Such tariff strategy would be necessary to inform how the tariff regulator makes decisions on requests for future tariff increases.

3. Consequential Questions to be Addressed in Respect of the Tariff Strategy

There will be several consequential questions that must be addressed pursuant to whatever tariff strategy is adopted.  These include the following:

(a) Lifeline Consumers

The PURC rate setting guidelines categorizes lifeline, medium and high consumers. Will Government give subsidies to “lifeline consumers” (in order to prevent the obvious social impact of commercial tariffs on lifeline consumers) and if so, will this be treated by the operator as a Public Service Obligation (PSO) in which case the PSO will lead to a potential recourse to the public purse? Or will the private sector make “lifeline concessions” and price it into a cross-subsidization tariff structure? Either approach will potentially have both economic and political impact.

(b)  Industry Versus Household Tariff

It is reported that about 40% of consumption is household and about 45% are special load consumption of high consuming industries. Will there be discriminatory tariff for strategic industries which have multiplier job creation potential?  Will the tariff strategy specifically require a higher tariff to domestic consumers as against selected industries? Will the GoG require beneficiaries of such lower tariff to demonstrate that it has translated into jobs and taxes accruing to the GoG?

(c) Direct Tariff Negotiations With Bulk Buyers

How will the policy on direct tariff negotiations of a private-sector-led ECG be regulated to prevent undermining bulk suppliers such as VRA?  What will be the threshold Energy Commission will set on what constitutes bulk consumption in order to deliberately drive the growth of both light and heavy industries?

This is particularly important since the bulk consumers are in the “deregulated market” of the power sector. Even within the current regime, there have been allegations of instances where ECG, for commercial reasons, has allegedly negotiated tariffs (below that of generation companies in the deregulated market) which created challenges for some big manufacturers as whether to buy from ECG (in the regulated market) or directly from generation companies (e.g. VRA) in the deregulated market.  The question is – to what extent can the private sector led ECG negotiate directly with bulk buyers and to what extent can the tariff regulator prevent ECG from undercutting bulk tariff agreed prior in time with generation companies?

4. A History of Knee Jerk “Absorption of Tariff”

Ghana has had a long history of policy makers who, after allowing utility prices to rise, are faced with the reality of public complaint especially from lower income earners (who constitute the bulk of the voter population and indirectly influence public policy formulation). In panic response, they announce knee jerk policies often designed to “absorb the increases in tariffs”. Such absorption  subsequently leads to higher public debt. The consequential macroeconomic instability falls back on businesses who are called upon to pay more taxes in order to stabilize the adverse macro-economic impact. Will there be a strategy to avoid a recurrence?

5. Potential Impact on Water Supply

There is a direct link between the availability of power supply to water pumping stations and regularity of water supply to water consumers. It is often alleged that Ghana Water Company (GWCL) is frequently in arrears of its payment obligations to ECG. How will the inter-company (ECG-GWCL) relationship be handled in order to ensure that the invoicing and debt collection strategies of a private sector led ECG, does not lead to disconnection of power supply to water pumping stations.  The social impact of such a scenario is obvious and needs no further elaboration.

6. A Debt-Ridden Company or Potential Cash Cow?

ECG is definitely a debt-ridden company now, but it is also a potential cash cow (otherwise, no private business will show interest).  How will the privatization strategy achieve a balance between any requirement for GoG’s debt absorption (or write off) with benefits from the future profits that will accrue to ECG.

7. Equity Structure

Will GoG retain equity in the privatized ECG and if so, will all or part of GoG’s equity be on “carried interest” basis? If not, what happens if government is required to make capital contributions to equity?  Will the Ghanaian tax payer have to cough up money towards future capital calls and what mechanisms will be put in place to ensure that there is reasonable return on capital to both the private sector and GoG sides of the enterprise?

8. Continuing Contracts and Transfer Pricing

As a going concern, ECG will have continuing contracts including the obligation to purchase fuel and other inputs. Allegedly, these are lucrative contracts as reported in the media. How are these contracts to be treated after the privatization to ensure transfer pricing is minimized in order to secure dividends accruing to the GoG side of equity holders.

9. The Take or Pay Obligation in ECG Power Purchase Agreements (PPAs)

How will GoG handle the take or pay obligation clauses in PPAs with Independent Power Producers (IPPs)?  Will they be passed on to the private sector to re-negotiate and whose responsibility will it be to continue buying fuel for the IPPs?  Will there be a recourse to the GoG even after the private sector takes over?

10. Waterfall Mechanism/Energy Sector Levy Act (ESLA)

As in the case of the Tema Oil Refinery (TOR) levy, which was imposed years ago, the waterfall mechanism/ESLA did not achieve the goals they were set up for.  How will these previous solutions be married into the privatization process and what carry on effect will it have?

There are many challenges facing us as a country, which the expectation is that the new government will urgently address. One that seems to be quite immediate is the power supply challenges, which are now topical due to the news that scheduled maintenance of the West Africa Gas Pipeline was rescheduled and fuel supply challenges may cause that to result in some power outages. The government, in its first week in office, has to urgently deal with the problem to avoid such disruption to power supply for both domestic and industrial use. In the midst of the various press releases and statements on dealing with the imminent power supply challenges, the Government has mentioned that it may look at privatisation of ECG. The President and his nominated minister of energy indicated that the government is looking at the option of privatisation or private participation.

Privatisation or Private Participation & the Models

Privatisation as a tool to get private sector parties involved in public service delivery involves a number of different models that must be carefully thought through based on the specific problems identified and the role private sector parties must perform in order to overcome such a problem(s). Privatisation, in the strict sense, involves the transfer of ownership, control and management of a state-owned enterprise or entity to a private sector party. However, in the broad sense, it can mean any involvement of a private sector party in the delivery of traditional public service, usually through a right granted contractually by the government to enable the private sector party to deliver the public infrastructure and related services.

The recent unsuccessful private sector participation (PSP) in the operations of the very entity at the center of the discussion – the Electricity Company of Ghana Ltd (ECG) – is strictly not privatisation. The PSP was an arrangement to get a private sector player involved in the power distribution under the ECG without transferring the ownership and control of ECG. This was implemented under the second Compact signed between the Government of Ghana and the United States of America. Many reasons account for the unsuccessful implementation of the concession arrangement opted for under the PSP under the Compact.

Full privatisation strictly undertaken will involve the transfer of ownership of the public sector entity, which generally is the transfer of the shares. There can be partial privatisation, where the government continues to hold some ownership. Privatisation can also be implemented as an asset transfer arrangement. As many will recall, a number of privatisations were implemented during the PNDC era, where a number of statutory corporations were divested under the auspices of the Divestiture Implementation Committee. In order to divest ownership, the statutory corporations were converted to companies pursuant to the Statutory Corporation (Conversion to Companies) Act and its legislative instruments that listed fifty-one corporations to convert. Interestingly, this included ECG, which was converted from the Electricity Corporation of Ghana, a statutory corporation, to the Electricity Company of Ghana Ltd, a private company limited by shares whose shares are solely owned by the government. That is, whilst it was converted, it was not privatised, and the government still retained the full ownership as a sole shareholder.

Other models for getting the private sector involved in the provision of public infrastructure and related service delivery include various options under public-private partnerships (PPPs). Various contractual arrangements are used, including concessions, operations and maintenance, build-operate-transfer, build-own-operate-transfer, rehabilitate-operate-transfer, and many more models, which are covered under the Public Private Partnership Act, 2020. Management Contracts are not covered under the PPP Act but come under the Public Procurement Authority Act. Outsourcing without the transfer of operational and financial risk also does not come under the PPP Act but remains an option for involving private participation.

Considerations for ECG Privatisation

A decision to adopt privatisation or private participation as a solution must be based on many considerations. First, in deciding to involve private participation in ECG’s operations, one needs to have in mind that there are two general competing interests at stake. A private party’s ultimate interest is to maximise profit and shareholders’ value, whilst that of a public entity or government is to have sustained provision of services at the most affordable tariff. The private and public parties do not, therefore, have the same perspective. A private party is focused on its investors, whilst a public party is focused on the consuming public. The government entering into such public-private arrangements must, therefore, have clear key performance indicators to ensure sustainable provision of services at affordable tariffs. This is particularly the case given the near monopoly ECG enjoys, at least in the southern sector.

Secondly, if the numerous problems facing the power sector are traced to the distribution segment of the power sector, be it technical and commercial losses, political interference, inefficient management, improper procurement, technological challenges, setting of realistic tariffs, collection of revenue, etc., or a combination of any of these, are to be overcome through some form of private participation, the right model for the private participation must be determined. Clear identification of the problem must drive the decision on whether privatisation or any form of private participation is the right tool and, if it is, what model must be adopted. The emphasis here is that a proper diagnosis of the problems facing the power sector is required for a determination of the solution to implement. Private sector involvement in the sector may not be appropriate to resolve all the problems facing the sector. For example, if the problem is with realistic tariffs, the involvement of the private sector will not change the under-recovery of the cost of power generation, transmission and distribution.

If private sector involvement is the proposed and most efficient solution, one must determine the right model for such involvement. As pointed out above, there are many models to involve a private sector party. This could involve actual privatisation, where the government divests its interest wholly or partially. In seeking to do this, the right legal framework must be strictly followed with proper economic, technical, commercial and financial due diligence informing clear benchmarks that must be set for the divestiture. It must be quickly added that even though this is an option, it is an unlikely model given the strategic nature of ECG, its critical role in the power sector and the security concerns.

Other models under the PPPs can also be looked at. The PSP option implemented under the Compact resulted in the grant of concession to the private party consortium. The current framework for PPPs in Ghana is the Public Private Partnership Act, 2020. Other than specific exemptions, any contractual arrangement between the public entity and private party for the provision of public infrastructure and services traditionally provided by the government, where the private party performs all or part of the infrastructure or service delivery function of the government and assumes defined risks over a significant period comes under the purview of the PPP Law.

As noted, outsourcing of specific services, be it management of the operations under a management contract or revenue collection, will not come under a PPP arrangement once there is no assumption of financial and operational risks by the private party. This must be guided by the Public Procurement Act.

For the implementation of any of these models to have any significant impact in the medium to long term, the structure of implementing the selected model must be informed by key considerations, including proper value for money assessment, clear and measurable output specifications based on key performance indicators, transparency and fairness in the adopted procurement process based on the proper procurement cycle with clear steps and objective measurable criteria, safeguards for public interest, environmental and social consideration, affordability, proper risks allocation, well-drafted contracts with clear obligations and performance indicators, etc.

One of the problematic requirements in the implementation of the selection of a private party involvement is the requirement of local content and local participation, particularly where the technical and financial capabilities required can only be satisfied by foreign players. Currently, the regulations fixed the minimum equity level for local participation at 30% at the start and moving up to 51% in ten years. This is the area where political patronage comes into play, leading to issues of corruption. A situation where a local party without the necessary financial and technical capability but with the right political association is imposed on a foreign counterpart generally leads to challenges as the very problem of political interference in the management of public operators is transferred into the private party management.

Successful privatisation or public-private contractual arrangement requires expertise from different fields – technical (electricity, asset evaluation, loss reduction expert, service quality standards), financial (valuation, financial modelling, tariff analysis, funding structure, etc.), legal (regulatory, contract drafting and review, environment and social regulations, license and permits, etc.), economic (market analysis, cost-benefit analysis, policy impact assessment, risks, etc.), environment and social, project management, risk management, institutional, and governance, etc. The right transaction advisor with the combined relevant expertise is required. In addition, this does not simply call for engaging a foreign consultant. The problems are local. A transaction advisor must appreciate the local nuances of each relevant field to understand what is required.

Last but not the least, any decision on privatisation or private participation in the operations of ECG must be taken after broad stakeholder consultations. It is important to get input from relevant stakeholders to make an informed decision and garner implementation support. The stakeholder engagement should not be listed to regulators and government entities but include business associations, civil societies, relevant labour unions and other relevant stakeholders.

Conclusion

Whilst this article does not argue that privatisation or private participation is the solution to the power sector challenges, it indicates that adopting privatisation or private participation in any of its many forms must be based on a proper assessment of the challenges, clear identification of the problem and a well-thought-out solution. If privatisation or private participation is to be adopted, the model must be fit for purpose. The appropriate framework must be adopted, and the right advisors must be engaged to guide the process, which must be devoid of political patronage. Above all, there must be broad base stakeholder engagement to have buy-in and support for any decision and its implementation.