Performance Audit Report on the Regulation of Water Utilities in Tanzania

The Controller and Auditor General (CAG) of Tanzania recently released a Performance Audit Report on the Regulation of Water Utilities, scrutinising the effectiveness of the Energy and Water Utilities Regulatory Authority (EWURA) in overseeing the sector. This audit, conducted under the CAG's mandate to assess value-for-money, highlights critical areas where regulatory oversight and utility performance fall short of statutory requirements and public expectations. Key issues identified in various CAG reports on the water sector include persistent challenges with non-revenue water, inadequate infrastructure maintenance, and deficiencies in water quality monitoring. The report underscores the urgent need for enhanced regulatory enforcement and strategic interventions to ensure sustainable and reliable water supply and sanitation services across Tanzania, impacting both urban and rural populations.

The provision of safe, adequate, and affordable water supply and sanitation services is a cornerstone of public health and economic development in Tanzania. Recognising its critical importance, the sector is subject to a robust legal and regulatory framework, with the Energy and Water Utilities Regulatory Authority (EWURA) at the helm of its oversight. In a significant development for the sector, the Controller and Auditor General (CAG) of Tanzania recently submitted a Performance Audit Report on the Regulation of Water Utilities in Tanzania to the President and the National Assembly. This report, dated March 2026, represents a crucial independent assessment of EWURA's efficacy in fulfilling its regulatory mandate.

This article delves into the implications of the CAG's performance audit, examining the legal and institutional landscape governing water utilities in Tanzania and highlighting the recurring challenges that undermine service delivery. For legal practitioners, understanding the findings and recommendations of such audits is vital, as they often signal areas of increased compliance risk, potential litigation, or forthcoming policy and legislative reforms. The audit serves as a critical barometer for the sector's health, offering insights into the practical application and enforcement of water sector legislation and regulations.

The regulatory architecture for water utilities in Tanzania is primarily anchored in two key pieces of legislation: the Water Resources Management Act, 2009 (No. 11 of 2009) and the Water Supply and Sanitation Act, 2019 (No. 5 of 2019). The Water Resources Management Act, 2009, establishes the framework for the sustainable management, development, and protection of water resources, including provisions for water abstraction, use, pollution control, and stakeholder participation. It vests the ownership and management of water resources in the state and outlines principles for sustainable water resources management.

Complementing this, the Water Supply and Sanitation Act, 2019, specifically addresses the sustainable management, adequate operation, and transparent regulation of water supply and sanitation services. This Act led to the establishment of Water Supply and Sanitation Authorities (WSSAs), the Rural Water Agency (RUWASA), the National Water Fund, and community-based water supply organisations, defining their roles and responsibilities in service provision. The economic and technical regulation of these utilities falls under the purview of the Energy and Water Utilities Regulatory Authority (EWURA), an autonomous multi-sectoral body established by the EWURA Act, Cap 414-2006. EWURA's mandate includes licensing, tariff setting, monitoring performance, and resolving disputes within the water sector, ensuring fair regulation and promoting competition. The Controller and Auditor General (CAG) derives its mandate to conduct performance audits from Article 143 of the Constitution of the United Republic of Tanzania of 1977 and Section 28 of the Public Audit Act, Cap. 418, allowing for value-for-money assessments of public entities like EWURA.

The CAG's Performance Audit Report on the Regulation of Water Utilities in Tanzania, submitted in March 2026, specifically directs its findings, conclusions, and recommendations to EWURA, indicating a focus on the regulator's effectiveness. While the specific details of this particular report's findings are not fully public, previous CAG reports and analyses of the water sector in Tanzania consistently highlight systemic challenges that EWURA's regulation aims to address. A recurring issue is the significant problem of Non-Revenue Water (NRW), which includes water lost through leakages, outdated infrastructure, and illegal connections. For instance, a 2020/21 audit revealed an increase in NRW value to TZS 175 billion, posing a substantial financial drain on water authorities. This indicates potential gaps in EWURA's monitoring and enforcement mechanisms to ensure utilities invest adequately in infrastructure maintenance and loss reduction strategies.

Furthermore, audit findings have frequently pointed to the non-functioning of water supply infrastructure and the inability of many Water Supply and Sanitation Authorities (WSSAs) to operate at installed capacity. This stems from operational and maintenance challenges, leading to low water production and unreliable service delivery. The financial viability of utilities is often precarious, with many struggling to cover operation and maintenance costs due to low tariffs and poor efficiency, despite EWURA's role in tariff setting. This suggests a delicate balance EWURA must strike between ensuring affordability for consumers and financial sustainability for service providers, a balance that performance audits often scrutinise for its effectiveness.

Another critical area of concern highlighted in previous audits is the inadequate monitoring of water quality parameters. Instances have been noted where water facilities fail to conduct proper quality monitoring before and after treatment, raising public health concerns. This points to potential weaknesses in EWURA's technical regulation and compliance oversight, or in the capacity of the regulated entities themselves. The Water Supply and Sanitation Act, 2019, places a clear obligation on authorities to provide sustainable and adequate services, which inherently includes quality. The CAG's report likely evaluates whether EWURA's regulatory tools and enforcement actions are sufficient to compel utilities to meet these fundamental service standards. The fact that some water authorities received qualified audit opinions in the 2024/25 financial year further underscores persistent financial and operational weaknesses that EWURA's regulatory framework is intended to mitigate.

The Controller and Auditor General's Performance Audit Report on the Regulation of Water Utilities in Tanzania serves as a crucial accountability mechanism, providing an independent assessment of EWURA's performance in safeguarding public interest within the water sector. For legal practitioners, the report's findings, even in their generalised form from related audits, underscore the importance of scrutinising compliance with the Water Resources Management Act, 2009, the Water Supply and Sanitation Act, 2019, and the EWURA Act, Cap 414. Issues such as high non-revenue water, dilapidated infrastructure, and inadequate water quality monitoring present significant legal and operational risks for water utilities and potential grounds for regulatory action or public complaints.

Practitioners advising water authorities, private sector participants, or community-based organisations must pay close attention to the CAG's recommendations, as they often foreshadow future policy directives, legislative amendments, or intensified regulatory enforcement by EWURA. The report highlights the ongoing need for improved governance, enhanced operational efficiency, and greater accountability within the water sector. Moving forward, stakeholders should anticipate increased pressure on EWURA to strengthen its oversight mechanisms, enforce performance standards more rigorously, and ensure that water utilities are not only financially viable but also consistently deliver high-quality, reliable services to all Tanzanians. Monitoring the government's response to this audit and any subsequent actions taken by EWURA will be paramount for all involved in the Tanzanian water sector.