MCC should adopt a “reform first” approach in working with utilities. As is the case for many MCC projects, the Lusaka Water Supply, Sanitation, and Drainage Project's major infrastructure investments took priority over policy and institutional reform (PIR). Over the course of implementation, it became increasingly apparent that the utility—Lusaka Water and Sanitation Company (LWSC)—had major problems that could not be directly addressed by the available technical assistance resources. In retrospect, there were deeper institutional (and political) challenges that needed to be addressed to create an enabling environment for successful infrastructure investments. Most of the PIR outcomes were not achieved, including improved LWSC operations and maintenance, reductions in non-revenue water, improved financial stability, improved planning, and improved asset management and customer database. The evaluation found that the piecemeal technical assistance provided to the utility lacked the coherence, and the utility lacked the political will needed to substantially improve utility outcomes. In some ways, the PIR technical assistance was not taken seriously enough to allow for holistic service delivery reform. For example, while financial viability of the utility was a recognized priority, the designed pre-paid metering solution was not well-suited to the nature of the utility’s struggles to achieve financial solvency. It can be difficult for MCC and the Millennium Challenge Account (MCA) to ensure PIR projects with necessarily smaller budgets are given similar technical and political attention vis a vis infrastructure projects with larger budgets. Having dedicated MCA staff for PIR components (which was not the case in Zambia) of the project can help ensure that this work is not overshadowed by large infrastructure works.
Lesson Learned