AFRICA-EUROPE FAITH AND JUSTICE NETWORK
RESEAU FOI ET JUSTICE AFRIQUE-EUROPE

174, rue Joseph II
B-1000 Bruxelles - Belgique
Tel. 32-2 234 6810 Fax 32-2 231 1413
aefjn@aefjn.org http://www.aefjn.org

Privatization of Public Domestic Water and Sanitation Services
and poverty in Africa

Well-being cannot be a commodity for sale!

Stealing for your right to water!
David Shezi, from Dangaye in KwaZulu-Natal, sells fruit and vegetables to motorists, earning 100 Rand a month. Five years ago he had saved the 500 Rand for a pipe connection to his house. But then school fees, transport and food costs drove him into debt and could no longer afford the monthly water rate. When the water supply was cut off, he bought water for three months at 25 liters for 1 Rand. That was too expensive! When his children begged for water form the neighbors, David could not stand the humiliation, he used a pipe to bypass the water meter. Then he was arrested for stealing water!
Unfortunately David Shezi is not the only one feeling the pinch! He is among one million poor in KwaZulu Natal who may be drawn to illegal practices to get the water they need for their households. How many people will have to "steal" water to which they are entitled by right?

The French service provider groups Vivendi-Environnement, SAUR and SUEZ-ONDEO, which hold together 74% of the world water market, have in recent years been contracted (some for concessions up to 25 years) for water and sanitation services in Côte d'Ivoire, Guinea, Mali, Chad, Mozambique, Niger, Morocco, Cameroon, Gabon, South Africa, Senegal, Burkina Faso and Kenya. The fact that water and sanitation in Africa are badly needed products and offer a fast growing market with a good elite clientele means that water and sanitation ensure sustained profits. No wonder water and sanitation services in developing countries have been a major target for European water companies in the WTO, at the World Water Forum of 2000 in Den Hague, the 2002 WSSD in Johannesburg and not in the least at the European Commission.

Most people in Africa live without telephone services; many manage without electricity or formal education and without western style healthcare services. But nobody can survive without sufficient drinking water! Safe and sufficient drinking water and basic sanitation services cannot be treated the same way as other services that can be traded!

In the present day African context, where (according to the World Bank calculations!) 29,5% of the population lives around or under the national poverty levels, it is morally wrong to officially and aggressively promote the commercialisation of water and sanitation services, while not encouraging or investing in alternative models for public delivery of water and sanitation services.

Yet, the European Commission considers the distribution of basic water and sanitation services to be the same as any other service to be traded, thus subordinating the needs of the poor and their human right to health-not to mention the freedom of their governments to opt for a more suitable policy-to market forces. Solutions to the problem of access to basic water and sanitation services for all, must take in account, first and foremost, the well being of all citizens. Well-being cannot be a commodity offered for sale only to those who can afford it!

About poverty in Africa

According to UNCTAD , the number of people in the Least Developed Countries living in extreme poverty has doubled since the nineteen sixties. The World Bank defines as poor a person with an income below 2/3rd of the national mean per capita income. It therefore accepts that in 1999, practically one out of three persons (29.5%) in Sub-Saharan countries was poor and that one out of two people in Sub-Saharan Africa had no access to safe water, while 45% had no access to sanitation facilities in 2000 .

With an expected population growth of 50% by 2020, of which 60% will live in urban areas-the majority of whom will have an income that is around or under national poverty lines-African governments face a major challenge, as the public health of entire communities is endangered.

Even with such sections of the African population living in poverty, the international organisations and the European Commission maintain that increased involvement of the private service providers of water and sanitation services is the only realistic solution to mobilize enough capital and know-how investment to reduce the number of people who have no access to safe drinking water by half by the year 2015.

If water distribution and sanitation services are left to enterprises whose concerns are full-cost recovery and profit, their focus will be on those sections of African societies that can generate a fair return for their investments. The overall figures of the number of people with access to water and sanitation may very well be higher in 2015 then today, but the plight of those living in remote rural areas, shantytowns, para-urban areas-i.e. the poor-will not improve.

Water a human right or an economic commodity?

People everywhere have always thought of water as a common good to which they have a right, one that has traditionally been managed on community based principles. Central to this kind of 'social thinking' logic has been the contention that a common good and/or right cannot be put up for sale!

However since the late 1980s the World Bank , in an effort to correct the flawed implementation policies of the UN Decade for Drinking Water and Sanitation (1981-1990), has openly advocated the notion that water is not only a right but also an economic good and that water supply development should be seen as an economic intervention. The European Commission embraced this concept stating that, though water is an essential need, it is also a commodity and can therefore be considered as a service to be traded, especially where it concerns services of distribution of water and sanitation .

Fortunately, as recent as November 26th 2002 the UN Economic and Social Commission affirmed that: "the human right to water entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic uses". The UN sub-commission reminds the international community that the right to water is enshrined in the International Bill of Human Rights and that it is the state's obligation to assure an equal, affordable and non-discriminatory access to water, especially for disadvantaged or marginalized groups in society .

Opting to understand water and basic sanitation as "economic goods" and "services that can be traded" takes as a given private sector participation as a key component in the development of water and sanitation sectors in developing countries. As such, the World Bank, the WTO's General agreement on Trade in Services (GATS) and, indeed, the EC advise African governments to abdicate their responsibility for an equitable public or community based water and sanitation policy in favour of a policy that encourages full or partial privatisation of their public water and sanitation undertakings.

Using double standards?

The EU agenda at the Doha-round negotiations on trade in services is to seek better access for European services exporters in foreign markets and to secure a more transparent and predictable regulation environment for services . The Commission has argues that the General Agreement on Trade and Services (GATS) will not threaten public services as exemptions are foreseen for certain public services and that developing countries have the choice to "opt in" the services they want to be liberalized, not including those they wish to build up domestically .

In early February , giving in to the mounting pressure from trade unions, academics, civil society groups, political parties and even national and local authorities, who had pointed out the dangers of GATS for delivery of affordable, accountable and quality public services around the world, the Commission promised to make use of the GATS exemptions and ruled out talks on the further liberalisation of European health, education, energy, water and broadcasting markets so as to ensure that Europe may continue to develop its own model of services in the public interest

But the Commission did not give up its plans for engaging in foreign markets! Though kept very secret, we all know that the Commission is ready to demand that developing countries open their markets for water and sanitation distribution services. If Europe recognises the dangers of privatisation in the provision of accessible basic public services in Europe, would it then not be only fair to recognize that this policy is at least as dangerous for the much poorer African countries?

Free to choose between Private or Public Undertakings?

There is ample documentation that water and sanitation services are fast being privatized and are increasingly run on a commercial basis in Burkina-Faso, Gabon, South Africa, the Republic of Congo, Cameroon, Ghana, Nigeria, Tanzania, Sao-Tome, Uganda, Chad, Mali, Mozambique, Senegal, Côte d'Ivoire, Angola, Benin, Guinea-Bissau and Niger.

While in some countries this was a freely chosen policy option, there is evidence that several governments were coerced into opening their water and sanitation markets.

A review of loans granted by international creditors since 1999 (often within the framework of the Poverty Reduction and Growth Facility) to Angola, Benin, Guinea Bissau, Niger, Rwanda, Sao Tome, Senegal, Ghana and Cameroon reveal that these HIPC countries would be unable to gain access to loans unless they abided by IMF recommendations to move towards privatization of water services such as introducing a market price for water supply (full cost-recovery program) or putting in place consumer water rates linked to the international exchange rate of the domestic currency (automatic tariff adjustment). Both of these measures are aimed at making public water and sanitation undertakings more attractive for private sector involvement . Yet another, 'more gentle', method for forcing privatization in Africa is revealed in the policy of certain Western countries to make aid available for infrastructure development, conditional on the African country agreeing to measures towards privatization .

Does privatisation work in Africa?

Did water distribution improve in Africa since privatisation or Private-Public-partnership (PPP) models were put into place? The answer is: Yes! On the question whether the poor are now better off, the answer is unfortunately: No!

Figures show that over the period 1990-1999, such partnerships in middle and low-income countries have slightly improved overall delivery of water services, reduced the water leakage and a more efficient operation. "Overall" delivery and access growth is to be expected. However, did a greater part of the poor have access to water? One of the most striking effects of privatization is that in general the cost of domestic water increased considerably. Reports from Chad, South Africa, Mali, Gabon, Burkina Faso and Mozambique also show that the use of management contracts often are limited to the provision of distribution and fee collection, while national or local governments are required to meet the far greater costs for new or renovated infrastructures, must guarantee a sufficient revenue from the users of the services and that municipalities and government services will pay their bills.

The achievements of privatized water and sanitation services so far are not very convincing! Indeed, if international efforts would be directed towards capacity building, restructuring and upgrading of the public and community water and sanitation utilities of Africa, there is no reason why these services should not obtain at least the same results!

Conclusions

The World Bank's own Operation Evaluation Department doubts that the private sector can meet the needs of the poor, that public sector operations should remain an option, and that public service delivery policy needs to be much more poor-sensitive . The current trend to privatize water and sanitation services forces African governments to focus, not poverty reduction and public health, but on creating conditions conducive to attract and secure the involvement of international companies.

The emphasis on increased involvement of the private sector in water and sanitation services favors the interests of business concerns, holding economic governance outside the realm of community control; it fails to respect the reality of the poverty of a huge section of African societies; it does not give due consideration to the full range of alternatives and represents a rigid one-sided, one-size-fits-all approach .

Governments in Africa should not be limited in their water policy options. Built in conditionalities for loans from international financial institutions and the General Agreement for Trade in Services (GATS) will bind them to liberalize their drinking water and basic sanitation markets. Such policies, as has been argued, are unlikely to result in fair and equitable access to water and basic sanitation services for all citizens.

Recommendations

The Church in Africa and Europe needs to take position concerning the current trend to privatize water distribution and basic sanitation services in Africa. Episcopal Conferences could advise their governments and the European Commission to defend :

1. At the World Water Forum at Kyoto in March, that water must be recognized as a human right, and not just as a need, as it was agreed upon at the 2000 World Water Forum of Den Hague.

2. At the WTO's negotiations on the General Agreement on Trade in Services, that services for water for personal and domestic use and basic sanitation should not be bound by GATS regulations.

3. At the G8, the IMF and the World Bank, that measures towards privatization of public water and sanitation undertakings would not be a condition for access to loans.

The option to emphasize the need to privatize basic water and sanitation services in Africa may be coherent with the principles of market economy; however, at this point of time in Africa's history it is inconsistent with the principles of respect for Human Rights and a sustainable development for Africa.

Luc Coppejans, MAfr
AEFJN, Brussels, 18 February 2003.