Water boards post huge losses

The country’s water boards have continued struggling financially, posting losses in 2025/26 fiscal year as they struggle with high non-revenue water (NRW) and debt collection challenges. According to the Government Annual Economic Report for 2026, NRW has averaged 33.4 percent from 36.1 percent in 2024, meaning that the five water boards only sold 66.6 percent of their pumped water resource, subjecting them to revenue constraints. For instance, the 33.4 percent NRW means that the water boards’ lost revenue through such leakages hover around K70 billion from K66 billion in 2024 considering significant tariff adjustments which went as high as 60 percent in some instances.

Reads part of the report: “From the analysis, Southern Region Water Board (SRWB) has the lowest percentage of NRW, now at 27 percent from 31.9 percent in the previous year. However, none of the water boards have met the recommended international standard of 25 percent. “The NRW is attributed to factors such as physical leakages in the distribution system due to pipe breakages resulting from construction works and other project activities, vandalism and inaccuracies in billing or meter readings,” Meanwhile, the debtors’ day, number of days taken to collect billed revenue, worsened by 0.6 percent from 163 days to 163.6 days out of the recommended 60 days, highlighting how debt collection inefficiency is also affecting the sector’s cashflow.

Here, SRWB registered improvement, reducing debtor’s days from 137 in 2024 to 110 in 2025 while the Northern Region Water Board (NRWB) and Central Region Water Board (CRWB) saw an increase from 61 to 65 and 397 to 446 days, respectively. In terms of individual waterboards’ performance, according to the report, save for Lilongwe Water Board which projects little profit, all other boards posted billions of losses. For instance, Blantyre Water Board, which effected 60 percent tariff adjustment, expects a decline in net losses from a deficit of K37.8 billion in 2024 to K10.2 billion in 2025 while CRWB expects a loss of K1.2 billion from K1.6 billion whereas NRWB net losses are projected to widen from K10.3 billion in 2024 to K14.7 billion in 2025.

[paywall]

In an interview, corporate governance expert Jimmy Lipunga said to improve efficiency in water utilities there is need to establish the key value drivers in the sector to assess their performance against their approved budgets and designated performance indicators in their operational strategies. Lipunga said: “Like any other public utility, profitability is driven by volume of water sales, cost-reflective tariff regime and cost-containment and efficiency. “The water utilities may not perform efficiently if they achieve targeted sales volumes and yet the tariffs are not cost-reflective.

This creates a risk that water is sold at a loss,” he said “If unaccounted for water losses are significant without a commitment to drastically reduce them, it is difficult to establish a fair cost reflective tariff for water utilities. “Setting tariffs without addressing these losses would pose an undue burden on consumers who will essentially be paying for water they haven’t consumed. It is a violation of economic justice,” Lipunga said.

[/paywall]