Institutional reforms needed for sustainability
Dennis Mwanza, managing director of the Water Utility Partnership for capacity building in Africa
One of the challenges for the new millennium is how to meet the ever-increasing demand for water supply and sanitation services. While global frameworks for meeting this demand are being set up, there is little hope for millions of people living in urban areas in developing countries unless major steps are undertaken.
International frameworks include the adoption of the Millennium Development Goals (MDGs) by government leaders in September 2000 and the declaration the International Decade for Action: Water for Life from March 2005 to 2015 by the UN General Assembly in December 2004.
The MDGs, among other issues, call for a 50% reduction in the number of people without access to a safe water supply and sanitation services. Achieving this target would ultimately reduce global poverty. However, the poverty levels for many sub-Saharan Africa countries average 46.7%, as opposed to the global average (excluding China) of 22.7% (1999 estimates). ‘Poverty’ refers to the number of people living on less than US$1 per day.
Indeed, water is life, essential for health and human dignity. It is a key to sustainable development and is also crucial for socio-economic and environmental development, yet access to this critical resource, by a huge percentage of Africa’s population, is limited.
Although the continent has an abundance of fresh water, only 62% of the population has access to safe water. Behind the statistics are lives of people being unnecessarily lost due to low availability or poor quality of water.
Africa is urbanizing at a higher rate than any other region in the world. According to the United Nations Department for Economic and Social Affairs (UN-DESA), it is estimated that around 48% of the continent’s population will live in urban areas by 2020, a sharp rise from the current 37%.
Africa’s urban population is increasing by as much as 5% per year, putting more pressure on the already overstretched and sometimes poorly managed urban water supply and sanitation services.
While accessibility to water and sanitation services may not be the main pull factor of people to urban areas, the statistics emphasise the need for better provision of services. Unfortunately the greater part of the urban population lives in deprived residential areas or slums, where services are also extremely poor or non-existent.
The greatest challenge faced by urban water utilities is how to provide services to these areas on a sustainable basis. In order to meet the MDGs of halving the unserved population by 2015, urban Africa will require an 80% increase in the numbers of people served with water and sanitation services.
Unfortunately, if many publicly-run utilities continue their record of under-performance, the goals will not be achieved. Many water supply and sanitation utilities (WSSUs) in Africa are operating inefficiently and have limited prospects for improvement unless they undertake or engage in broad institutional reforms.
There is increasing general awareness and consensus that deficiencies in the urban water and sanitation sector, in many developing countries, are attributable more to institutional shortcomings, including legislation and regulatory issues, than financial and technical inadequacies.
The institutional reforms should result in financial and management autonomy and possibly open up opportunities for increased private sector participation (both for accessibility to private funding and management). At the least, utilities have to be commercially viable if they are to ensure that the low-income clients’ demand for services is properly addressed.
The reforms of WSSUs and the improvement of their performances are central to the drive to expand coverage and address environmental problems in urban areas.
The situation on the ground is sometimes disheartening, and many national governments lack the political will to embrace change. Weak institutional arrangements with the resulting poor service delivery should motivate governments, especially political leaders, to fully embrace water sector reforms. Unfortunately many political leaders are scared of change.
Changes could benefit the political systems but are often seen as working against the poor. However, currently the very poor are paying a much higher price for low quality water under poorly managed public utilities.
Indeed, if reforms are to yield any results, they must be embraced locally. There has to be leadership in undertaking reforms and reforms must not be seen as an imposition or yielding to some donor conditionality.
While on one hand utilities face the challenge of serving consumers who have limited financial resources to pay for the services, the utilities themselves are dogged by very low tariffs hence leading to low cost-recovery.
The situation is worsened by low collection rates from dissatisfied consumers with little or no incentive to pay for unreliable services. The combination of low billing and collection ratios, along with low tariffs, can easily lead a cost recovery of only 30-50%.
Lack of investment in water by governments and donor agencies means the facilities are almost becoming obsolete. The extremely difficult financial circumstances in which utilities operate will worsen unless reforms are embraced.
Many developing countries have a very weak urban institutional framework, with very little governance, lack of accountability and little or no transparency. Utilities tend to be accountable to the appointing authorities rather than to the people they serve.
Technical transparency is lacking and, without benchmarking, utilities consider themselves to be performing much better than theyactually are.
The goals will not be achieved by increased investment alone. Institutional re-engineering, leading to more credible, accountable and transparent organisations that respect the good governance principles, supported by independent regulatory frameworks, is needed.
It is also necessary to ensure that the roles of the key players in the urban water supply and sanitation sector are clearly defined. This includes the separation of policy-making from regulation and service provision. Governments need to concentrate on creating an environment for better and efficient provision of services.
MDGs will not be achieved unless governments and utilities engage in broad institutional reforms.