Public water suppliers are still losing massive amounts of cash through invisible gaps in their systems, with nearly Sh14.9 billion slipping away in the 2024/25 financial year from water that never reached billing records.
The latest figures point to persistent breakdowns in pipelines, illegal tapping and faulty metering that continue to drain revenues even as production rises.
Compared to the previous year’s Sh11.9 billion loss, the sector’s financial leakage has widened further, deepening concerns over efficiency and accountability.
Data from the Water Services Regulatory Board shows that almost half of all treated water never turns into revenue, with non-revenue water averaging 48 percent.
This includes water lost through burst pipes, theft, meter inaccuracies and weak billing systems that fail to capture what is actually consumed. Although utilities increased water production by 9.4 percent, billing only grew by 2.3 percent, meaning most of the added supply did not translate into income.
“A persistent underlying challenge within the water services subsector remains the high level of NRW, which stood at 48 percent. Although water production increased by 9.4 percent, the volume billed rose by only 2.3 percent, indicating that a substantial portion of the additional water produced was either lost or unaccounted for,” the regulator said.
The global standard for non-revenue water is about 20 percent, placing the local situation far above acceptable efficiency levels. Regulators warn that this gap continues to strain utility finances, slow expansion plans and reduce the benefits expected by consumers.
“This persistent inefficiency continues to undermine financial viability, constrain service expansion, and limit the benefits delivered to consumers.”
Even with increased output, actual household consumption remains low at 26.7 litres per person per day, suggesting that improved production has not fully translated into better access at the household level.
Losses are uneven across providers, with very large utilities recording the biggest share at Sh11.7 billion, followed by large utilities at Sh2.7 billion. Medium and small utilities posted losses of Sh0.3 billion and Sh0.2 billion respectively, reflecting widespread inefficiencies across the system.
Small utilities recorded NRW levels above 31 percent, while medium utilities deteriorated further, rising from 52 percent to 57 percent. “Medium utilities’ performance was worse, with NRW rising sharply from 52 percent to 57 percent, reflecting severe physical losses and weak commercial controls,” the regulator noted. “Overall, NRW performance is deteriorating rather than improving. Only large utilities show slight progress, while small, medium, and very large utilities are either stagnating or worsening.”
Despite the leakages, the sector still posted stronger financial performance, with total revenue rising 14 percent to Sh32.9 billion in 2024/25. Operation and maintenance cost coverage also improved to 103 percent, showing some utilities are now able to meet basic running expenses.
However, the Water Services Regulatory Board cautioned that this improvement is uneven, noting that more than half of utilities still fall short of full cost recovery. Liquidity pressures remain high, while staffing costs continue to consume funds that could otherwise support infrastructure upgrades.
Anthony Njaramba, chief executive officer of the Water Services Providers Association, said the problem reflects a long-running structural weakness rather than isolated failures. “For the last 20 years, non-revenue water has remained above 40 per cent. Now we are seeing figures closer to 48 per cent,” he said. “That means we are not doing well. We are losing a lot of money,” he added.
Expansion of access is also moving slowly. Water connections grew by 1.3 percent and sewer connections by 0.9 percent in the 2024/25 year, both lagging behind population growth.
“More people are being reached, but durable household connections are not increasing fast enough. The largest disparities persist in rural, arid, and underserved counties, where service hours are lowest and infrastructure remains underdeveloped,” the regulator said.