_These improvements in access to improved water and sanitation services have propelled Uganda toward meeting the MDGs._ Access to improved water increased from 48 percent to 66 percent in of the population between 1995 and 2006, while access to improved sanitation rose from 66 percent to 70 percent over the same period. As a result, Uganda has already met the MDG of 65 percent for improved sanitation, and is close to reaching goal of 72 percent for improved water.

# **Box 1. Understanding the differences between the JMP and government data**

The AICD uses the Joint Monitoring Data (JMP) coverage statistics as the main source of access data on water supply and sanitation, and process under a standardize methodology to allow cross-country comparisons. These data might differ from that reported by governments. The JMP data are based on household surveys and therefore reported by users of the services, the government data is based on utility reports. This implies that there is a time lag between output data (provider) and outcome data (users). Moreover, household surveys capture clandestine use of water services, which are not conveyed in utility data. Other underlying factors explaining potential differences are the definition of what technologies constitute improved access to water supply and sanitation; and, the JMP’s use of several household surveys visà-vis the use of a single data point by several governments. Therefore, the conclusion on progress on MDGs might differ according to the data source used.

_Source:_ Adapted from AMCOW (2010).

_The performance of the urban water sector has been boosted by the remarkable improvements in the performance of the National Water and Sewerage Corporation (NWSC)._ The NWSC provides water supply and sewerage services in the 22 largest urban centers covering only 10 percent of the population in all. The improved performance is attributable to increases in revenue collection and a reduction in distribution losses. Revenue collection doubled from 48 percent of the bills in 1996 to 99 percent of the bills in 2009 (table 9). These rates exceed those of an average utility in LICs and are equivalent to the rates for utilities in MICs in Africa (table 8). Distributional losses also reduced significantly from 65 percent of production in 1996 to 36 percent in 2009. Despite the improvements, however, distribution losses at the NWSC as of 2009 were 16 percentage points higher than the benchmark for a wellperforming water supply utility in Africa (table 9). The NWSC has also recorded impressive progress in labor productivity, with connections per employee more than tripling from 45 connections per employee in 1996 to 148 connections per employees in 2009; this still falls short of the benchmark of 200 connections per employee for a well-run utility in Africa, however. In 2005 a free connection policy was introduced to allow the poorest customers to access utility water. Since then the number of the NWSC’s connections has almost doubled, rising from 123,046 connections in 2005 to 225,932 in 2009. Nevertheless, cost recovery is still a substantial challenge for the NWSC. Costs have increased substantially in recent years, yet systematic adjustments of water tariffs have not been undertaken. Thus, although the NWSC’s revenues cover operating cost, they do not cover capital costs (table 8). Capital costs have been financed by the government through aid from donors.

_Hidden costs as a percentage of the NWSC’s revenues have registered an impressive decline during the decade ending 2009_ . In 2009 hidden costs were around 65 percent of the NWSC’s revenues compared to 243 percent in 1999. In 1999, under-pricing of water, large distributional losses, and revenue collection issues were responsible for the large hidden costs (figure 17b). Despite progress in the NWSC’s performance, under-pricing of water still needs to be tackled to reduce the inefficiencies of the NWSC. In monetary terms, hidden costs have remained more or less stagnant at around $30 million a year. The 29