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Irrigated agricultural production is viewed as key to the twin challenges of transforming agriculture and adapting to climate change in sub-Saharan Africa. Farmer-led irrigation is currently not well recognised or accounted for, and the current focus on state or public-private irrigation schemes means this activity is largely occurring outside of formal governance mechanisms or is deemed illegal. How do current institutional and regulatory frameworks relate to the apparent boom in farmer-led irrigation, and how do these shape current patterns of response, support, and regulation? To answer this question, we build a conceptual understanding of water governance which draws on critiques of current institutional frameworks for water and irrigation management, specifically using the conceptual ideas of isomorphic mimicry and capability traps, and elements of a problem-driven iterative adaptation (PDIA) approach. We then use three case studies from Tanzania and Malawi to illuminate three critical problems that state institutions encounter in approaching the recognition and regulation of farmer-led irrigation. In our conclusion we argue that current irrigation governance is creating capability traps for existing institutions. Where incremental and context-driven adaptation of governance is practised this can be avoided, creating better chances of effective support and regulation of farmer-led irrigation development.