How to address South Africa’s water scarcity problem

Whilst the focus on the energy crisis remains strong and consistent, another crisis looms and that is the inadequate investment in water infrastructure, coupled with the scarcity of water. With crisis comes opportunity, Thanzi Ramukosi, Investment specialist at NinetyOne unpacks how investment can help averts more pain to our economy.

Mon, 18 Sep 2023 16:19:02 GMT

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AI Generated Summary

Water scarcity crisis in South Africa necessitates urgent investment in infrastructure
Collaboration between public and private sectors crucial for efficient water management
Encouraging payment mechanisms and improving collection rates vital to attract investments and sustain water projects

South Africa is facing a looming crisis of water scarcity, with inadequate investment in water infrastructure exacerbating the issue. Whilst much attention has been given to the energy crisis, the water crisis remains a pressing concern that requires urgent action. Investment specialist, Thanzi Ramukosi from NinetyOne, discusses how investment can play a crucial role in averting a deeper economic crisis due to water shortages. The recent announcement of water restrictions in Johannesburg highlights the persistent nature of the water shortage issue in the country. Projects such as the Lesotho Highlands Water Project and Moloko Crocodile Project have been identified as key initiatives requiring financing to ensure a sustainable water supply. Collaboration between the public and private sectors is essential to address the substantial leakage of water in municipal pipelines, amounting to approximately 47% of water loss. Through partnerships and investments, efforts can be made to repair and maintain existing infrastructure, ultimately reducing water wastage and improving efficiency. Furthermore, ensuring consistent payments from municipalities is crucial to attract more investment into the water sector. With the support of the Public Procurement Bill, efforts are being made to simplify procurement processes and encourage private sector involvement in water infrastructure projects. However, a significant challenge lies in shifting societal behavior towards accepting the need to pay for water, similar to how electricity payments are widely accepted. Encouraging payment and collection mechanisms is essential to secure the necessary funding for water projects and bridge the financial gap in the sector. The total investment required for near-term water projects in South Africa is approximately $115 billion, with a significant portion of this funding expected to come from the private sector. Improved collection rates and payment systems will be key in attracting private sector investments and ensuring the long-term success of water infrastructure projects. With the right structures in place and a collective effort from both the public and private sectors, South Africa can work towards securing a sustainable water supply for its citizens.