African Utility Regulators Emphasize Transparency

Report from the 2nd AFUR Annual General Assembly Meeting
March 14 - 18, 2005
Kampala, Uganda

By Dr. Frank B. Sebbowa
Chief Executive Officer
Electricity Regulatory Authority of Uganda

About the Author...

Dr. Frank B. Sebbowa has served as the Chief Executive Officer of the Electricity Regulatory Authority (ERA) since 2001. He is responsible for the overall management and operations of the ERA and serves as the key link between the commissioners and professional staff at the ERA and the many electricity sector stakeholders firstly in Uganda and elsewhere. A professional engineer by training, Dr Sebbowa received his Ph.D. and M.Sc. from Leeds University in the United Kingdom.

The African Forum for Utility Regulators (AFUR) recently converged on Kampala, Uganda for their second annual meeting and conference whose central theme was "Infrastructure Investment and Regulation: The Case for Regulatory Transparency". Nurtured by World Bank financing and the various young African utility commission and regulatory agencies in 2003, AFUR formalized itself into the now growing but independent organization and now annually hold a high level meeting to learn from each other, share experiences and listen to selected experts from allover the world disusing important topical regulatory issues.

At the Kampala meeting, emphasis was on the need for regulatory transparency as a driver for private investment attraction into the rather investment starred African utility markets. Speaker after speaker (including senior African commissioners) identified bottlenecks to transparency in the regulatory process suggesting practical solutions to removing them. As expected the law setting up regulatory agencies in most instances proved insufficient and haphazard implementation compounded issues. Inadequate financial and administrative autonomy often provided the loophole through which political interference eroded transparency. A common solution to financial autonomy was accepted as a regulatory levy on consumer with budgetary control through independent financial auditing and accountability to higher organs of the state such as the national parliament.

Participants to the meeting had been availed in advance copies of the World Bank commissioned study by Dr. Richard Hern of the London based National Economic Research Associates (NERA) on "Regulatory Transparency: International Assessment and Emerging Lessons" as a working tool. Dr. Hern and his associates urge that there are six key dimensions to regulatory transparency:

1. Clarity of roles and objectives (which is should be embedded in the law establishing the agency)
2. Predictability
3. Transparency of decisions
4. Accountability for actions
5. Participation of stakeholders in the process
6. Open access to information

The participants, after thorough discussions and deliberations on the six points recognized and charged the AFUR secretariat with the task of drafting Guidelines for Regulatory Transparency inclusive of a suitable Transparency Index mechanism, with a view to encourage AFUR members to adopt the same for their operations.

Mr. Horvei, the Chief Executive Officer of SAD-ELEC consultancy firm in South Africa, enumerated the many difficulties Africa is experiencing in attracting private finance by pointing out that the financing gap is huge. He also noted that the liberalization of utilities in Africa has been slow due to political sensitivity in most countries where liberalization has occurred and to inadequate regulatory autonomy due to inadequate laws or high implementation huddles. Both have compromised the appetite for private investment in the utility sectors.
Mr. Horvei emphasized the investor's expectation of regulatory transparency as only secondary to good national governance principles when it comes to electing investment destinations.

There were several papers on successful management of regulatory agencies and a few on some of the important regulatory notes such as tariff setting, economic monitoring and legal compliance etc.

Going forward into its fourth year of formal existence, AFUR has recognized the need to develop working sectoral committees to facilitate effective in-depth research, analysis, and reporting on issues specific to electricity and energy regulation, water and sanitation regulation and telecommunication regulation. The framework for setting up and implementing these sectoral committees were thoroughly debated and agreed at the Kampala meeting. These sectoral committees will additionally be the driving engine for capacity building and regulatory skills development in the region. The AFUR members' plenary agreed to ensure that the sectoral committees become functional during the course of the year under the interim stewardship of the following eminent African regulators:

Electricity (and Energy):	Professor Assie Bennie Director General of National Authority for Regulation of Electricity Sector Ivory Coast.
Telecommunication:	Ms Jackie Manche Chief Executive Officer Independent Communications Authority Republic of South Africa
Water and Sanitation:	Mr. Osward Chanda Executive Director National Water & Sanitation Council Zambia.

The conference brought together well over 80 personalities in regulation including USA Commissioners Robert Clayton (Missouri Public Service Commission) and Arnetta McRae (Delaware Public Service Commission) as well as Flarin Gugu from the ENEL of Romania. The Secretariat of Africa's New Partnership for African Development (NEPAD) was well represented to highlight the importance of utility regulation to the development of Africa. The Washington based National Association of Regulatory and Utility Commissions (NARUC) extended both a technical and financial hand to its young African counterpart during the conference and it is likely to play a significant role in the future of AFUR. The World Bank support to this worthwhile cause will most probably continue through the Public Private Infrastructure Advisory Facility (PPIAF) of the Bank.

For complete information the program, including Conference Agenda and presentation materials, please visit:
http://www.afur.org/events/2AnnualGeneralAssemblyMeeting/index.htm

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