Right message, right solution? The African Development Bank and Africa’s water crisis
This past month, the African Development Bank (AfDB) released a report entitled “Water Sector Governance in Africa,” which identified poor governance as the primary reason why millions of Africans are without clean, safe and sufficient drinking water, and reliable sanitation. The message is clear, and shines the light on a tragic problem. A 2006 UN Human Development Report noted that the lack of clean water and sanitation has both immediate effects (approximately 1.8 million children die as a result of diarrhea) as well as longer-term developmental effects (approximately 443 million school days are lost each year from water-born illnesses). To add to this, the AfDB estimated that $450bn-$60bn would be needed, annually, to improve Africa’s failing water and sanitation infrastructure, a number that cannot be met by ODA (official development assistance) and national budgets alone.
The answer, according to the AfDB, is to privatize the water sector and force people to pay. Think back to your political science or econ classes; it is a matter of moving water from that of a public good, to something of a club or private good.
The reasoning behind the AfDB’s decision is fairly simple, and in-line with many privatization advocates:
- Privatization will lead to more efficient (consistently to a greater number of people) and effective (cleaner) delivery of water, while easing the financial pressures on the state.
- Subsidized water supplies and services (i.e. by the state) distorts the consumers perception of the value of water and results in greater waste (having recently moved from an apartment where I paid for utilities, to one where utilities were included in the rent –thus “essentially” free –I can relate to this line of reasoning).
- And, as mentioned above, poor governance and a lack of financial resources make it impossible for the state to correct this crisis without the infusion of commercial finance.
Unfortunately, the AfDB has identified the right problem, but the wrong solution. A few reasons why the privatization of water in Africa would be a poor public policy include:
- On July 26, 2010 the UN General Assembly declared, “the right to safe and clean drinking water and sanitation as a human right…” Charging admissions for a human right seems like a really bad idea.
- For the poor who desperately need to see an increase in water supply, privatization promises little change to the status quo. Unable to afford the “metered” water, these individuals continue to seek out free, yet unsanitary water from dirty rivers and canals. As one example, Clare Provost cites the 2000 cholera epidemic in South Africa’s KwaZulu-Natal province where 120,000 people were infected and 265 were killed as a result of poorer individuals not being able to pay for privatized water.
- Basic economics tells us that multinational corporations or MNCs (profit maximizing entities answerable to their shareholders), would invest more in the regions that bring in larger profits than in those that do not; thus wealthy communities would have better water infrastructure while those who really need it, the poor, continue to suffer in neglect.
- Past experiences simply do not indicate that the privatization of water actually helps to provide water to those in need. As illustrated below, the 2006 UNHDP report revealed that individuals living in places like Manila, Accra and Barranquilla all paid more for water than in New York or London.
- Finally, if states cannot provide clean drinking water and reliable sanitation because of poor governance, why are we to believe they can provide the oversight to ensure that large, powerful MNCs will do the job any better.
I am not advocating for throwing the proverbial baby out with the bath water, that would be wrong. The AfDB has accurately identified a serious crisis. What I am advocating for is a solution that does not repeat past mistakes while sufficiently addressing the problems at hand. Perhaps something in the middle, between state provision and privatization, would be more appropriate? Perhaps something in the arena of public private partnerships (PPPs), or even some sort of creative use of public development partnerships (PDPs)?