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Are African Electricity Distribution Companies Efficient? Evidence from the Southern African Countries

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Author Info
Antonio Estache
Beatriz Tovar
Lourdes Trujillo () (Department of Economics, City University, London and DAEA, Universidad de Las Palmas de Gran Canaria)

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Abstract

This paper is a first attempt at documenting economic efficiency levels in Africa’s electricity distribution, their evolution and the sources of this evolution. The analysis is based on a sample of 12 operators providing services in the 12 countries members of the Southern Africa Power Pool. We focus on the changes in total factor productivity (TFP) of the largest operators in each country between 1998 and 2005. We then rely on a DEA decomposition to identify the sources of the changes in TFP. The results suggest fairly comparable levels of efficiency in the region and performance levels and evolution quite independent of the degree of vertical integration, the presence of a private actor or the main sources of energy supply. The analysis suggest that although the companies have not made significant improvements during the period of analysis in using their capital and human assets, they have done much better in adopting better technologies and better commercial practices. No clear correlation could be associated with the adoption of reforms during the last decade and data limitations impede a more refined assessment of the impact of reforms on efficiency at this stage.

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Publisher Info
Paper provided by Department of Economics, City University, London in its series City University Economics Discussion Papers with number 07/13.

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Length: 20 pages
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:cty:dpaper:0713

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Keywords: Malmquist productivity; electricity; efficiency;

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References listed on IDEAS
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  1. Estache, Antonio & Goicoechea, Ana, 2005. "How widespread were private investment and regulatory reform in infrastructure utilities during the 1990s?," Policy Research Working Paper Series 3595, The World Bank. [Downloadable!]
  2. Jamasb, T. & Pollitt, M., 2000. "Benchmarking and regulation: international electricity experience," Utilities Policy, Elsevier, vol. 9(3), pages 107-130, September. [Downloadable!] (restricted)
  3. Estache, Antonio & Goicoechea, Ana, 2005. "A"research"database on infrastructure economic performance," Policy Research Working Paper Series 3643, The World Bank. [Downloadable!]
  4. Jamasb, T. & Mota, R. & Newbery, D. & Pollitt, M., 2004. "‘Electricity Sector Reform in Developing Countries: A Survey of Empirical Evidence on Determinants and Performance’," Cambridge Working Papers in Economics 0439, Faculty of Economics, University of Cambridge. [Downloadable!]
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  5. Jamasb, T. & Newbery, D. & Pollitt, M., 2004. "'Core Indicators for Determinants and Performance of Electricity Sector in Developing Countries’," Cambridge Working Papers in Economics 0438, Faculty of Economics, University of Cambridge. [Downloadable!]
  6. Kumbhakar, Subal C. & Hjalmarsson, Lennart, 1998. "Relative performance of public and private ownership under yardstick competition: electricity retail distribution," European Economic Review, Elsevier, vol. 42(1), pages 97-122, January. [Downloadable!] (restricted)
  7. Plane, Patrick, 1999. "Privatization, Technical Efficiency and Welfare Consequences: The Case of the Cote d'Ivoire Electricity Company (CIE)," World Development, Elsevier, vol. 27(2), pages 343-360, February. [Downloadable!] (restricted)
  8. Hjalmarsson, Lennart & Veiderpass, Ann, 1992. " Productivity in Swedish Electricity Retail Distribution," Scandinavian Journal of Economics, Blackwell Publishing, vol. 94(0), pages S193-205, Supplemen.
  9. Leland Gerson Neuberg, 1977. "Two Issues in the Municipal Ownership of Electric Power Distribution," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 303-323, Spring. [Downloadable!] (restricted)
  10. Estache, Antonio & Perelman, Sergio & Trujillo, Lourdes, 2005. "Infrastructure performance and reform in developing and transition economies: evidence from a survey of productivity measures," Policy Research Working Paper Series 3514, The World Bank. [Downloadable!]
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