Quality of Regulatory Governance in Ghana: An Analysis of the Public Utilities Regulatory Commission in the Electricity and Urban Water Sectors

Abstract

This thesis undertook a rigorous analysis of the quality of regulatory governance within the Public Utilities Regulatory Commission (PURC), specifically focusing on its oversight of Ghana's electricity and urban water sectors. The overarching objective of the study was to conduct a comprehensive qualitative investigation into the regulatory governance of the Public Utilities Regulatory Commission (PURC) in Ghana, assessing the alignment of its institutional design and legal framework with recognised features, specifically Autonomy and Transparency of effective regulatory governance, assessing its responsiveness to stakeholders in the electricity and urban water sectors, and analysing the perceived level of regulatory credibility provided to stakeholders. Data was collected from various stakeholders through one-on-one interviews, focus group discussions, and documentation using a qualitative research approach. The study was carried out across three geographically representative regions: Accra in the Southern belt, Kumasi in the Middle belt, and Tamale in the Northern belt. The data was analysed using qualitative thematic analysis, which involved a thematic analysis of the interview and focus group discussion transcripts. The research findings reveal that PURC exhibits commendable managerial, legal, and financial autonomy. However, it grapples with challenges related to structural autonomy, rendering it susceptible to political interference. The study also reveals that while mechanisms are in place to enhance transparency, there is still room for improvement. Particularly, there is limited transparency in the tariff calculation model due to the unpredictability of the variables used. Furthermore, although PURC has demonstrated a noteworthy degree of regulatory responsiveness and credibility for its stakeholders, certain inconsistencies in policies and decisions need attention. Precisely, PURC has not been able to ensure the predictability of tariff adjustment schedules. The challenges encountered encompass political interference, insufficient safeguard mechanisms, threats to financial autonomy, the influence of environmental factors, and inadequate institutional resources within the country. The study makes significant original contributions to knowledge including institutional and legal frameworks in the context of regulatory autonomy and transparency, responsiveness, and credibility. By delving into regulatory governance in Ghana, the study also finds support for three theories of regulation: public interest, capture theory, and credible commitment. Based on the research findings, several recommendations are proposed to enhance the regulatory institutional design and legislation. These include reinforcing autonomy, transparency, and responsiveness in the appointment procedures and tenure of office, as well as implementing a transparent Cash Waterfall Mechanism and enforcement strategies. Furthermore, this study highlights the importance of a national dialogue concerning the intricate interplay of socio-politico-technological factors and the tariff-setting process. It emphasises the necessity of balancing safeguarding consumer interests and ensuring that utility service providers receive fair tariffs to facilitate infrastructure investment. Future research endeavours could focus on measuring the quality of PURC’s regulatory governance, emphasising the equitable management of stakeholders’ interests, and further advancing the regulatory landscape in Ghana’s utility sectors. Additionally, there is a critical need to explore the reasons behind political interference to ascertain whether they are rooted in public or private interests. Moreover, further research could explore the factors leading to regulatory non-compliance by public utilities in the electricity and urban water sectors. Specifically, to ascertain the nature of power-play within the governance structure in the electricity and water sectors. Additionally, the study suggests delving deeper into the motivations behind government interference and utility non-compliance by utilising theories such as public interest and regulatory capture. It also highlights the implementation of transparency measures like the Cash Waterfall Mechanism (CWM). It proposes comparative analyses and longitudinal studies to track the impact of regulatory reforms and stakeholder engagement. Furthermore, the study emphasises the need for comprehensive investigations into regulatory credibility's effects on stakeholder behaviour and regulatory outcomes, advocating for continued exploration of regulatory dynamics across different sectors and jurisdictions.