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Since the beginning of the 1990s, comprehensive reforms of the Ghanaian water sector were initiated by the Bretton Woods Institutions. The Government of Ghana was obliged to restructure the sector by establishing regulatory bodies, opening the sector to private sector participation and separating responsibilities for urban water supply from rural water supply. The parastatal Ghana Water Company Limited (GWCL) was created to be solely in charge of urban water supply. In spite of external assistance, GWCL continued to suffer from massive financial, managerial and technical problems. The gap between supply and demand increased while demand for potable water in the cities was on the rise and the supply systems were degenerating. In order to introduce greater efficiency, two options for public–private partnerships (PPP) were developed and contested, over a period of 10 years. At first private companies were invited to take over the GWCL by a lease contract. Numerous factors, among them a massive anti-privatisation campaign and global economic trends unfavourable to private investment, particularly in the water sector, caused a comprehensive revision of the policy and the modification of the PPP programme from lease to short-term management contract with an ensuing affermage concession in 2004. This process was to be supported by external donor agencies substantially upgrading the water supply infrastructure. However, it seemed doubtful if the recent policy would lead to a sustainable system of urban water supply and substantial improvements in the supply situation of the poor. Patronage relations were not sufficiently addressed and alternative PPP options based on local potential had not been considered. The case of Ghana raises issues of imposed PPP policies that are not based on adequate information about local, national and international framework conditions.
Fuest et al. (Sun,) studied this question.