Most public utilities in Africa are operating at very low efficiency levels. This is mainly a result of poor governance leading to a downward spiral in terms of service to customers. Nearly in every case, studies have shown that the root cause of these problems is not necessarily lack of investment but poor choices with regard to sector policies, institutional and regulatory frameworks. The paper will seek to show the need for effective regulatory framework that promotes Good Governance of public utilities leading to their efficient performance. The paper will draw lessons from the Australian water services regulatory framework and apply it to the African water situation. The Australian regulatory framework has been instrumental in promoting Good Governance in the public utilities hence being run efficiently. It is recognised that the African Water and Sanitation Sector where most public utilities are not operating under a clearly defined regulatory framework can learn a lot from the Australian experience.

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