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Financial Viability of Electricity Sectors in Sub-Saharan Africa: Quasi-Fiscal Deficits and Hidden Costs

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dc.contributor.authorTrimble, Chris
dc.contributor.authorKojima, Masami
dc.contributor.authorPerez Arroyo, Ines
dc.contributor.authorMohammadzadeh, Farah
dc.date.accessioned2016-08-10T16:16:14Z
dc.date.available2016-08-10T16:16:14Z
dc.date.issued2016-08
dc.description.abstractThis paper studies the financial viability of electricity sectors in 39 countries in Sub-Saharan Africa using an approach similar to that in an earlier study, the Africa Infrastructure Country Diagnostic. The quasi-fiscal deficit in each country is calculated under two scenarios: existing utility performance and benchmark utility performance. In the first scenario, only two countries have a financially viable electricity sector (the Seychelles and Uganda). Only 19 countries cover operating expenditures, while several countries lose in excess of US$0.25 per kilowatt-hour sold. Quasi-fiscal deficits average 1.5 percent of gross domestic product, and exceed 5 percent of gross domestic product in several countries. In this context, it will be difficult for utilities to maintain existing assets let alone facilitate the expansion needed to reach universal access goals. The number of countries with a quasi-fiscal deficit below zero increases to 13 under the second scenario, and to 21 when oil price impacts are considered, indicating tariff increases may not be needed at benchmark performance in these cases. Combined network and collection losses on average represent a larger hidden cost and are less politically sensitive to address than underpricing, so could be a smart area for policy focus to reduce quasi-fiscal deficits. Underpricing remains an issue to address over the medium term, as service quality improves. With no changes in power mix, tariffs would need to increase by a median value of US$0.04 per kilowatt-hour sold at benchmark performance, representing a 24 percent increase on existing tariffs. Most countries have improved or maintained performance, and relatively few countries have had declining financial viability.en
dc.identifierhttp://documents.worldbank.org/curated/en/2016/08/26676470/
dc.identifier.doi10.1596/1813-9450-7788
dc.identifier.urihttps://hdl.handle.net/10986/24869
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 7788
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectelectricity
dc.subjectelectric utilities
dc.subjectquasi-fiscal deficit
dc.subjectsubsidies reform
dc.titleFinancial Viability of Electricity Sectors in Sub-Saharan Africaen
dc.title.subtitleQuasi-Fiscal Deficits and Hidden Costsen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleFinancial Viability of Electricity Sectors in Sub-Saharan Africa: Quasi-Fiscal Deficits and Hidden Costs
okr.date.disclosure2016-08-09
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/2016/08/26676470/
okr.guid182071470748085038
okr.identifier.doi10.1596/1813-9450-7788
okr.identifier.externaldocumentum090224b084694274_2_0
okr.identifier.internaldocumentum26676470
okr.identifier.reportWPS7788
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2016/08/09/090224b0844d290b/1_0/Rendered/PDF/Financial0viab0its0and0hidden0costs.pdfen
okr.region.administrativeAfrica
okr.region.geographicalSub-Saharan Africa
okr.topicEnergy::Electric Power
okr.topicMacroeconomics and Economic Growth::Taxation & Subsidies
okr.topicMacroeconomics and Economic Growth::Economic Policy, Institutions and Governance
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.topicEnergy::Energy Policies & Economics
okr.unitEnergy and Extractives Global Practice Group
relation.isAuthorOfPublication60bee924-2bf7-5094-88fd-d3e4089fe6ec
relation.isAuthorOfPublication.latestForDiscovery60bee924-2bf7-5094-88fd-d3e4089fe6ec
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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