MCC compacts should prioritize building data capacities of beneficiary institutions from the earliest engagement to support development of data-driven program design and to facilitate effective monitoring and evaluation during and after compact close. Initial financial assessments using data obtained from the Lusaka Water and Sewerage Company (LWSC) showed a position of strength for the utility including low debt, and ultimately a surplus in revenue over expenses by 2009. This seemingly strong position influenced the compact design and investment decisions. During compact implementation, assessments of the utility’s data quality systems and further deep dives into the utility’s data uncovered a systematic deferral of maintenance activities and other operational challenges that directly impacted all of the major benefits modeled in the Economic Rate of Return calculation originally used to justify the compact investment. Admittedly, such data assessments are challenging for an outside entity if the underlying systems are not in place to monitor operations of the utility. There is a need to build in institutional data systems within the compact to verify the program design and to support continued monitoring as well as evaluation. For example, efforts by the compact to increase LWSC revenue through customer metering and an update of the customer database did result in about a three percent improvement based on analysis conducted by the independent evaluator. However, the utility was not conducting these analyses internally and therefore made decisions that did not maximize the benefit from this intervention (by choosing to replace meters for already metered customers rather than metering customers who were previously unmetered and received lower bills).
Lesson Learned