From Crisis to Control: World Bank’s Roadmap for Utility Reform in West Africa

The World Bank’s report reveals that most West African power utilities are financially unsustainable due to poor governance and lack of digital tools. It offers actionable reforms to improve transparency, management, and operational efficiency across the region.

A new World Bank report developed by the Energy and Extractives Global Practice with support from the Energy Sector Management Assistance Program (ESMAP), offers an unflinching look at the persistent financial and operational dysfunctions plaguing West African power utilities. Drawing on a comprehensive 95-question survey distributed to 15 utilities across the region from Sierra Leone and Liberia to Ghana, Nigeria, and Côte d’Ivoire the research forms part of a broader analytical initiative led by David Loew and strategically guided by Ashish Khanna. The findings are stark: only six of the 25 utilities studied can recover their basic operating and debt service costs even with government subsidies. Without subsidies, the number falls to just three. This reveals a sector trapped in a vicious cycle of underinvestment, poor service delivery, and collapsing revenue, with little room for operational improvement or strategic planning.

Behind the Breakdown: Four Core Failures

The report identifies four interlinked culprits behind this systemic underperformance. First, many utilities rely heavily on expensive, volatile liquid fuels to generate electricity, pushing up costs and making financial planning nearly impossible. Second, corporate governance structures are consistently weak or non-functional, with boards lacking autonomy, transparency, and performance-based oversight. Third, utilities across the region are not equipped with even the most basic digital tools necessary to monitor operations, engage customers, or track revenue. And fourth, most utilities operate with fragile balance sheets weighed down by arrears and unsustainable liabilities, making them unattractive to investors and difficult to reform.

To provide a more concrete picture of how these issues manifest in practice, the World Bank conducted a dual-layered assessment of both governance practices and digital readiness using de jure (laws and policies) and de facto (real-world implementation) measurements. While 60 percent of governance best practices are on paper, just 50 percent are applied in practice. On the IT/OT front, only one utility had a full suite of essential digital tools ranging from customer management systems and advanced metering infrastructure to outage response and supervisory control. Many others either lacked these tools entirely or failed to use them effectively due to poor staff training and lack of integration.

Where Rules Exist but Power Doesn’t

Governance weaknesses across West African utilities are deeply structural. Boards often exist more as formalities than functioning oversight bodies. Competitive selection of board members is rare, and most utilities lack a corporate governance charter defining roles, responsibilities, and qualifications. The overlap of legal frameworks such as company law, SOE regulations, procurement laws, and sector-specific policies adds to the confusion, leaving utilities uncertain of their obligations and unaccountable in practice. Only 20 percent of utilities reported any kind of competitive board appointment process, and none had actually implemented it. Less than half of the surveyed utilities followed a code of ethics, and the majority were unable to define who holds ultimate responsibility for strategic and financial decisions.

Financial transparency also remains an uphill battle. While nearly all utilities prepare financial statements, only 60 percent make these documents public. Adherence to international financial reporting standards (IFRS) is also low, limiting the ability of external partners and investors to assess risk and engage with these utilities. Furthermore, public service obligations (PSOs) such as subsidized tariffs or universal access mandates are often neither properly costed nor compensated by governments. Only one utility reported receiving timely and adequate compensation for its PSOs, further eroding its financial viability.

Learning from the Field: Sierra Leone and Liberia

To ground the data in real-world narratives, the report dives into case studies from Sierra Leone and Liberia. In Sierra Leone, the Electricity Distribution and Supply Authority (EDSA) is at the center of a crisis. With over 50 percent distribution losses and poor collection rates, EDSA required $36 million in government subsidies in 2023 alone. Though donor-backed IT/OT systems were introduced in 2023, they remain only partially implemented. Governance instability further compounds these issues: EDSA has cycled through three managing directors since 2020, and in early 2024, the entire board was dissolved during a national power crisis. Despite being bound by multiple legal frameworks, EDSA has no governance charter, no clear reporting obligations, and limited autonomy to set strategic direction.

In contrast, Liberia’s utility, LEC, showed promising signs of recovery after the competitive recruitment of a CEO and COO in 2021. Losses fell, transparency improved, and customer numbers nearly doubled. But by late 2024, the contracts of these senior managers were not renewed, and no formal policy was in place to ensure merit-based hiring in the future. The gains made now appear vulnerable, a reminder that one-off reforms are not enough without institutional safeguards to sustain them.

Charting a New Course for Reform

The report ends not in despair, but with a clear and achievable blueprint for change. It recommends utilities clarify the legal frameworks under which they operate and adopt comprehensive governance charters that set clear rules for board composition, oversight, and conduct. Senior management should be recruited through competitive, transparent processes, and utilities must commit to publicly disclosing audited financial statements to build stakeholder confidence. On the technology front, utilities need tailored IT/OT roadmaps with sequenced, costed deployment plans to ensure that systems are not only installed but also integrated and maintained.

Ultimately, the report is both a warning and a roadmap. It shows that despite decades of reform, the foundations of utility management remain weak but it also shows that relatively low-cost, targeted interventions can make a real difference. With political will, smart planning, and sustained donor engagement, West Africa’s power sector can move from crisis to credibility, and from inefficiency to resilience.