Introduction
The first phase of exploring the Non-Revenue Water (NRW) system revealed an important insight: persistent water losses cannot be explained by technical failures alone. Earlier analyses of the system and its stakeholders identified recurring weaknesses in governance, information flow, accountability, institutional coordination, trust, and financial sustainability. These factors do not operate independently. Rather, they interact continuously to shape NRW performance. Drawing on both systems analysis and professional experience in the water sector, this article argues that NRW persists not because policies, institutions, technical expertise, or data are absent, but because these elements often fail to function as an integrated governance system. This governance assessment interprets how these interactions enable or constrain sustainable NRW reduction and explains why repeated technical interventions frequently deliver only temporary improvements
Interpreting NRW Through a Systems Strengthening Lens
To interpret the governance dimensions of NRW, this assessment applies UNICEF's Enabling Environment Strengthening for Water, Sanitation and Hygiene. The system strengthening framework recognizes that complex sector challenges emerge from interactions among multiple governance functions rather than from isolated institutional or technical weaknesses. provides a structured lens for examining the functions that enable a water system to perform sustainably, while also recognizing that weaknesses across these functions can interact and reinforce one another. The five interconnected governance functions (Policy and strategy, Institutional arrangements, Financing, Planning, monitoring and review, and Capacity development) provide the analytical structure for NRW governance assessment. Political leadership and commitment cut across all five functions, influencing priorities, resource allocation, institutional coordination, accountability, and long-term system performance. Examining NRW through this integrated governance lens helps explain why water losses often persist despite existing policies, investments, and technical interventions. The figure below illustrates NRW governance assessment using the UNICEF framework.
Political Leadership and Commitment
Political leadership and commitment can significantly shape NRW performance by influencing policy implementation, resource allocation, institutional coordination, and accountability. However, competing political priorities, limited commitment to sustained NRW investment, and weaknesses in transparency and accountability can divert attention and resources away from long-term NRW reduction. Where short-term political considerations outweigh system needs, utilities may struggle to secure the consistent support required to address underlying NRW challenges. Strengthening political commitment therefore requires aligning leadership priorities with long-term sector outcomes, transparent resource allocation, and stronger accountability for NRW performance. Against this backdrop, the assessment now considers the five key functions of the systems-strengthening framework used for the assessment.
Policy and Strategy
Most water utilities have policies, regulations, and NRW reduction targets that provide an important foundation for improving utility performance. However, my experience in the water sector has shown that having policies and targets does not automatically translate into coordinated action. The gap often emerges between what is expected at the policy level and what utilities can implement in practice. NRW targets, for example, may be clearly defined, like the ones set at 25% by the Water Services Regulatory Board (WASREB) in Kenya, yet achieving them requires coordinated action across technical, commercial, financial, and customer service functions. When NRW is treated primarily as the responsibility of a single department, the policy objective becomes disconnected from the broader system that generates the losses. In my view, the challenge is therefore not only whether an NRW strategy exists, but whether there is sufficient leadership and political commitment to translate it into shared responsibility, aligned priorities, adequate resources, and sustained action across the entire system.
Institutional Arrangements
NRW management cuts across multiple functions and institutions, making clear roles, coordination, and accountability essential. From my experience, responsibilities may be formally assigned, yet fragmentation often emerges in practice when technical, commercial, finance, customer service, regulatory, and government actors address different parts of the same NRW problem without sufficient coordination. A physical leak, for example, may begin as a technical issue but quickly become a financial, commercial, and customer relations concern if repairs are delayed and service is disrupted. When each actor focuses only on their immediate responsibility, no one may take ownership of the overall outcome. Effective institutional arrangements therefore require more than clearly defined mandates; they require mechanisms that connect responsibilities, strengthen accountability, and enable actors to work collectively toward a shared NRW reduction goal.
Financing
Financing is central to NRW management because reducing water losses requires sustained investment in infrastructure maintenance, metering, technology, data systems, and human capacity. Based on personal experience in the water utilities sector, NRW creates a difficult cycle: high water losses reduce utility revenue, while reduced revenue limits the resources available to address the very conditions contributing to those losses. The challenge is therefore not simply the availability of finance, but how NRW is prioritized within budgeting and investment decisions. When limited resources favor immediate operational pressures over preventive maintenance and long-term NRW reduction, utilities can become trapped in a reactive cycle of responding to failures rather than preventing them. Breaking this cycle requires treating NRW reduction as a strategic investment that protects future revenue and strengthens the utility's long-term financial sustainability.
Planning, Monitoring and Review
NRW data is essential for understanding system performance, but collecting and reporting data does not necessarily mean that it is being used effectively. From my experience, NRW figures can indicate that a problem exists without clearly showing where the system is failing. For example, there exists a debate in many water utilities about which component contributes the greatest NRW, between commercial losses and physical losses. Physical losses, meter inaccuracies, unauthorized consumption, billing errors, and data inconsistencies may all contribute to the same headline NRW figure, but most water utilities struggle to know which of the two produces the biggest loss. The real governance challenge is therefore turning information into coordinated action. When technical, commercial, and financial data are fragmented or reviewed separately, opportunities for early intervention can be missed. Effective NRW management requires monitoring systems that do more than report performance; they must enable actors to jointly interpret emerging patterns, learn from them, assign responsibility, and trigger timely corrective action.
Capacity Development
Sustainable NRW reduction depends not only on infrastructure and technology but also on the capacity of the people and institutions responsible for managing the system. From my experience, utilities may have skilled technical professionals, yet NRW management requires capabilities that extend beyond engineering to include data analysis, commercial management, customer engagement, coordination, and adaptive decision-making. Capacity gaps in one area can weaken performance across the system. New technologies, for example, may generate better data, but their value is limited if teams lack the capacity to interpret the information and translate it into coordinated action. Strengthening NRW's capacity therefore requires more than periodic technical training; it requires building institutional capability to work across functions, learn from system feedback, and continuously adapt how NRW is managed.
Integrated Governance Insight
Looking across the five functions, my interpretation is that the central governance challenge in NRW management is not necessarily the absence of policies, institutions, financing, data, or technical expertise. Rather, it is the weakness of the connections that brings these elements together into a coordinated system of action. A policy may set clear NRW targets, but institutional fragmentation can weaken implementation. Limited financing can constrain action, while fragmented monitoring can delay decisions and weaken accountability. Capacity limitations can further reduce the ability to respond effectively. Cutting across these interactions is political commitment, which can determine whether NRW remains a reported performance problem or receives the sustained leadership attention, resources, coordination, and accountability required for improvement. This helps explain why NRW can persist despite repeated interventions. Strengthening individual functions is important, but sustainable improvement requires strengthening the relationships between them so that policy drives coordinated action, information informs decisions, financing supports priorities, institutions remain accountable, and capacity enables the system to learn and respond.
Reflections
This governance assessment reinforces my understanding that persistent NRW is not simply a reflection of technical inefficiency, but also of how effectively the wider system is governed. Policies, institutions, financing, information, and capacity may all be present, yet their impact depends on how well they are connected and supported by sustained political commitment. For me, the key insight is that improving NRW performance requires moving beyond strengthening individual parts of the system in isolation. The greater opportunity lies in strengthening the relationships between them, creating a system where responsibilities are connected, information triggers action, resources follow priorities, and actors are collectively accountable for results.
From Governance Assessment to Deeper Interpretation
This governance assessment provides a clearer picture of why NRW can persist even where technical interventions and formal institutional structures are in place. It reveals that system performance depends not only on the strength of individual governance functions, but also on how they interact and reinforce one another over time. Understanding these governance relationships explains why NRW persists. The next step of applying the SIDA Improvement Cycle Interpret Stage will examine the deeper system dynamics, feedback loops, and reinforcing mechanisms that continue to shape NRW performance over time.
Author: Ernest Chea I Email: ernest.chea@strathmore.edu
SiBI Institute Extern, PhD Candidate, Social Marketing, Strathmore University Business School
Mentor: David Tsetse, Ph.D., Founder and President I SiBI Institute
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