An Analysis of Factors Affecting the Financial Performance of State-Owned Enterprises: A Case Study of Mulonga Water Supply and Sanitation Company Limited

Abstract

This study investigates the factors influencing the financial performance of Mulonga Water Supply and Sanitation Company Limited (MWSC) in Chingola District, Zambia, using a mixed-methods approach. Through a survey of 136 stakeholders, including customers and employees, and in-depth interviews with 10 key informants from management and local government, the research identifies non-revenue water (NRW), political interference, weak internal financial controls, and revenue collection inefficiencies as primary challenges. Quantitative analysis reveals that effective NRW management and reduced political interference are critical for improving financial outcomes, while qualitative insights underscore governance weaknesses and aging infrastructure as significant barriers. The study further explores underlying causes such as chronic underfunding, reliance on outdated billing technologies, and insufficient staff training. To address these issues, the research proposes targeted strategies: enhancing internal financial controls, investing in modern infrastructure to minimize NRW, adopting digital solutions for efficient revenue collection, and instituting governance reforms to insulate the utility from political pressures. These findings contribute to the understanding of financial sustainability in state-owned water utilities in developing contexts and offer practical recommendations for policy and operational enhancements at MWSC and similar entities