The very political financing of water infrastructures in Africa

    For most of us, our first thought about water in Africa is that Africa lacks water. Images of deserts and arid lands cracked by drought come to mind. But is this preconception really true? A member of the steering committee of the African Water Association (AAE), Claude Jamati edited the collective work entitled L'Afrique et l'eau (2014) and refutes this well by stating that "Africa does not lack water but distribution and sanitation infrastructures." Similarly, Mohamed El-Azizi, director of water and sanitation at the African Development Bank, makes the same observation: "Africa has plenty of water but no water to drink" (Heuclin & Hewitt, 2015).

    The real challenge linked to water is therefore its unequal distribution, which compromises the economic development of certain territories, as its presence is a guarantee of growth and essential to the majority of economic activities. Let's take the example of the great variability of rainfall, which has a considerable influence on the production of wealth in Zimbabwe or Ethiopia (graph below, Frailé, 2006). GDP falls by more than 10% during periods of drought (Frailé, 2006). 

    A restricted access to water thus considerably jeopardizes a country's economy, which makes the issue of water strategic and that of water infrastructures crucial. Indeed, out of the 54 countries in Africa, 14 are threatened by water scarcity. 80% of people without access to a source of drinking water live in Africa and one out of two Africans has to travel 10 km each day to fetch his water (Jamati, 2014).

    These eloquent figures clearly demonstrate the urgency of improving water supply and sanitation. How can we mobilize the necessary financing for such a challenge? To answer this question, we will rely on the note written by Inès Frailé (Infrastructure Expert of the Finance, Private Sector and Infrastructure Department of the Middle East and North Africa of the World Bank) entitled “Water in Africa. Financing investments” (2006).

    She states that doubling the volume of annual investments dedicated to the development of water services in Africa would be necessary. But then, what solutions could be adopted to meet the challenge? Of course, mobilizing more international development aid and increasing public spending by reversing its downward trend in the infrastructure sector is a first step. However, public resources seem to be insufficient to achieve the ambitious objective.

    The increasing privatization of water and health service delivery could lead to a significant amelioration of water supply and provision in Africa. The small number of developers and operators, the low profitability margins, the complex contractual framework and the small number of bankable projects are nonetheless as many entry barriers for private investors. How to attract more private investors to compensate for the lack of public resources? Yet, by improving service efficiency through productivity gains and optimizing the management of water services, the risks taken by private investors could be mitigated and they would be more inclined to spend on the creation of new water infrastructures, especially if governments or financial institutions offer guarantees. But is there not a risk here of increasing the weight of large foreign companies in such a strategic sector at the expense of small local entrepreneurs? Are these investments motivated solely by the capitalist logic of market gain or do they maintain the colonial handovers and the former colonial mindsets?

    However, encouraging international private investors can go hand in hand with the promotion of the local financial market by providing them with an adequate regulatory framework as well as facilitating access to long-term capital. The development of international solutions can be another way of financing water infrastructure. This incentive for cooperation seems relevant given the transboundary nature of African rivers. For example, Guinea has fourteen international rivers and Mozambique has eight (Frailé, 2006). Eventually, and despite the strong social constraints, increasing user contributions through taxation could be another source of financing.

    Lastly, such a choice to prioritize water infrastructures financing would put countries into a virtuous circle of development. Improving these services would lead to the reduction of child mortality, universal primary education or poverty reduction for instance.