Africa’s Poor Water Infrastructure Draws Big Investments

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Written by D.A. Barber

With grand rivers like the Nile, Congo, Niger, Zambezi and Limpopo, sub-Saharan Africa appears to have ample water. But the uneven distribution of those and other water resources leaves many countries facing increasing levels of water stress as population and economic growth outpaces existing water infrastructure.

“Only 58 percent of Africa’s population enjoys access to safe drinking water,” according to the African Development Bank, which notes in both urban and rural areas, the number of people depending on unsafe surface water continues to grow.

Besides the human need, the economic sectors which require water – such as agriculture and energy – have brought to the forefront opportunities for expanding water infrastructure in the region.

“Africa has very high non-revenue water and very high water scarcity issues, not to mention the other issues which are just clean drinking water,” Ben Gardner, president of Northeast Group told AFKInsider.

According to the World Bank, Factors contributing to the prevailing situation of under-maintenance are institutional weaknesses in the wake of decentralization, inadequate attention to technology choice, low pump density, restrictive maintenance systems, and the lack of a supply chain to adequately maintain complex machinery.”

Part of the solution is the recognition that countries must boost cooperation in managing cross-border or “trans-boundary” rivers, lakes and ground water for shared economic growth.

Infrastructure Solutions

Water security is defined by the World Bank as “reliable water supplies and acceptable risks from floods and other unpredictable events, including those from climate change.”

To meet the Millennium Development Goals, it is estimated that Africa would have to spend $15 billion annually, four times more than the current spending of $3.6 billion on water projects.

Finding innovative water infrastructure solutions was center stage – along with investment possibilities – at the 5th Africa Water Week Business Forum in May, where increasing water use efficiency in agricultural was given particular prominence.

It is estimated that 85 percent of all industrial water withdrawals in Africa go to agriculture.

During October’s 6th U.S.-Africa Infrastructure Conference in Washington sponsored by the Corporate Council on Africa, a panel discussion focused on the varied opportunities for investment in the water, sanitation and hygiene market.

“There was a long discussion on water and sewage and drainage, which had a big focus on the compact that’s happening in Zambia that is financed by the U.S. Millennium Challenge Corporation,” Vivienne Sequeira, Corporate Council on Africa’s Director of Infrastructure told AFKInsider.

“And actually, that’s one of the reasons our trade mission [went] to Zambia – so our participants can learn more about that project.”

That trade mission to Zimbabwe, Tanzania, and Zambia took place Oct. 26 through Nov. 4 to explore business opportunities in the agribusiness, energy and infrastructure sectors. In Zambia, the Millennium Challenge Corporation has been offering opportunities to compete for funding for infrastructure and institutional strengthening projects through Zambia’s five-year, $355 million compact.

The upcoming March 2015 Zambia International Water & Infrastructure Conference and Exhibition in Lusaka will also focus on financing water infrastructure projects, including sustainable solutions and technological breakthroughs.

During the Corporate Council on Africa’s conference, World Bank municipal finance specialist Kirti Devi noted that while there is a need to mitigate water security risk, there are also huge opportunities for investment throughout Africa.

One of those opportunities targets the critical need to curb wasted water. Inefficiencies and failing infrastructure cost utilities about $3.7 billion in revenues each year.

“Inefficiencies are divided between distribution losses and revenue under collection. Average distribution losses stand at 35 percent, far above the world norm of 20 percent,” according to the African Development Bank.

“In the worst cases – such as the Democratic Republic of Congo, Ghana, and Zambia – these combined inefficiencies can create an economic burden of 0.7 to 1 percent of GDP.”

“The big issue is ‘non-revenue water,’” Ben Gardner, president of Northeast Group told AFKInsider. “If 100 percent is sent in one end of the pipe and only 70 percent comes out the other end of the pipe, there’s 30 percent non-revenue water.”

“This lost water creates additional needs for costly treatment plants, increases the demand for energy from pumping stations, and puts added stress on already strained communities and environments,” according to the Northeast Group 2013 report Emerging Markets Smart Infrastructure: Smart Water, looked at the smart water infrastructure market in 72 emerging market countries through 2023, including Ghana, Kenya, Rwanda, South Africa, Tanzania, Uganda and Zambia.

The report notes “lost revenue from this water only increases the need for government subsidies, which already are necessary to cover a significant portion of the costs of water in many countries.”

The Infrastructure Consortium for Africa points out that besides old and leaking pipes, “lack of metering, poor billing and collection procedures, as well as illegal water connections” contributes to the loss of revenue for utilities.

Northeast Group’s Gardner says their research indicates using smart water meters – much like smart electric meters – can help water utilities and developers identify where there are leaks in the water infrastructure.

“So, you can do smart meters at the residential level, but you can also do smart metering at the network level or through the water distribution network – what we call ‘smart water networks.’ And that can help identify where there’s non-revenue water,” Gardner told AFKInsider.

Cross-Border Water

According to the World Bank, 40 percent of rural dwellers continue to rely on surface water but in many countries, less than 1 percent receives piped water.

The Bank cites some “best cases” in Lesotho, Mozambique, and Uganda which have managed to shift 2 to 3 percent of the rural population from surface to piped water each year. Yet, one in three rural water distribution points still need rehabilitation.

In the other countries, surface water use is actually increasing and that is forcing governments to set aside differences in favor of regional cooperation on trans-boundary river and lake basin infrastructure policy.

“Africa has some 63 international river basins that “are shared by two or more countries and require careful coordination of water resource management and associated infrastructure investments,” according to the World Bank.