How the private sector didn’t solve Ghana’s water crisis

By IndepthAfrica
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Jul 26th, 2012
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Judith Amanthis

Seventy percent of Ghanaian homes don’t have a WC or a pit latrine. Piped water, if you have it at all, is intermittent, so water in your tap depends on whether you can afford a domestic reservoir. In 2005, the World Bank secured a private sector solution to the water crisis in Ghana – the first independent sub-Saharan African country, and one of the first to be economically adjusted for corporate benefit. But Ghanaian campaigners had different ideas for their taps and toilets.

A remarkable turnaround in Ghana’s water sector occurred in June 2011. After five years of managing Ghana’s urban water services, Aqua Vitens Rand Ltd, a Dutch South African water corporation, failed to renew its contract with the government-owned Ghana Water Company Ltd. Ghanaian opponents to water privatisation had won a resounding victory. They effectively wrong footed the World Bank, private sector advocate and major funder of Ghana’s water sector.

In Accra, you’re unlikely to have a WC plus individual cesspit unless you’re in the elite minority, and pit latrines are largely rural. You therefore have a few options. You can defecate in a bucket or a pan and pay for your ‘night soil’ to be taken, probably manually and illegally, perhaps twice a week, to a cesspit whose contents are then emptied by sewage tankers. You can walk to and then queue for a public latrine, most likely a subhuman hangover from colonial days where you pay for a bit of newspaper to wipe yourself and where there may be six stalls serving 1,000 people. You can defecate in a plastic bag and deposit it in the storm drains that line your street. You can defecate in a storm drain. You can defecate on the beach. Men often urinate in drains. Women sometimes put a bucket under their skirts. The only area with underground piped sewers is the ex-colonial enclave, round Osu, where the president lives and Ministries are located. At the wittily-named Lavender Hill, near some of the poorest areas in town, sewage tankers squirt raw sewage into the sea. A World Bank and Ghanaian government funded treatment plant is said to be in the pipeline at Lavender Hill.

If you have piped water, it’s not safe to drink, however rich or poor you are. If you can afford it, you buy either sachet water or bottled water to drink. Bottled water is expensive, on average GHc2 (US$1.9) a litre when the minimum wage is GHc4.48 (US$2.66) a day. The media periodically report sachet water scams. In any case, your tap will be dry perhaps 75% of the time, depending on your topological relationship to the local pumping station. If you can afford it, you install a huge polytank (a cylindrical plastic container) on a tower in your garden, plumb it into your domestic system, and fill it up when the taps are running. If you can’t afford it, you store water in jerry cans wherever you have room. You might seek professional help to fix your water meter, illegally. If you don’t have piped water, and you’re not paying bills to the Ghana Water Company, you might employ a professional to plumb you into a mains water pipe, illegally. If you don’t, you must buy from a water tanker, or from a stand pipe, which is more expensive than tap or domestically stored water. Fetching three buckets of water a day can cost you between 10% and 20% of your daily income. Thus, the poorer you are, the more you’re likely to pay for water in absolute terms.
Despite these huge problems, in January 2011 the World Bank was confidently stating that Ghana was ‘making steady progress’ towards the United Nations 2015 Millennium Development Goal for safe drinking water.

Water privatisation in Ghana goes back decades. The 1980s and the Rawlings regime saw external funders, especially the World Bank and the IMF, direct the restructuring of the Ghanaian economy as a condition for receiving desperately needed loans. Water reforms in the 1980s included sacking staff in the publicly owned Ghana Water and Sewage Corporation, attempts to curb non-revenue water and an emphasis on ‘cost recovery’ – as opposed to improving access to sanitation and clean water.

By 1999, the GWSC had been replaced by the Ghana Water Company Ltd. While 100% state owned, it’s responsible neither for rural water services nor for sewage disposal. Sewage generates life and plant growth as well as death and disease, but not profit.

In the same year, the World Bank’s plans snarled up on the issue of national sovereignty: the government objected to the accusation of corrupt tendering practices, and the World Bank withdrew its US$100 million loan – but with an eye to elections the following year. And indeed, the new New Patriotic Party government, far keener on the World Bank’s ‘reforms’ than Rawlings’ National Democratic Congress had ever been, ‘quickly organised an international tender for the [public-private partnership] lease contract, and in 2001 they short listed nine [multinational] companies…’ [1]

At this point, the opposition to the proposed water reforms consolidated. The National Coalition Against the Privatisation of Water was established at an Accra forum in 2001. Members of South Africa’s Anti-Privatisation Forum and Municipal Workers’ Union participated, as well as an activist from Bolivia’s Cochabamba water struggle. They ‘shared their experiences of water privatisation, and the adverse impacts it had had on their communities.’ [2]

Independent research in 2002 found ‘… that implementation of a plan for full cost recovery and automatic tariff adjustment mechanisms [in the water sector] will be a condition for the completion of the IMF’s fifth review of Ghana’s Poverty Reduction and Growth Facility loan. Further, ‘Conditions attached to World Bank lending led to a 95 percent increase in water tariffs in May 2001.’ [3]

By early 2011, the anti-water privatisation coalition had been organising pickets, meetings, and media campaigns for 10 years. It had survived splits and government witch hunts, and had received some (but not nearly enough) international media exposure. NGOs which had previously backed water privatisation were working alongside it. Ghana’s Public Utility Workers Union was now openly campaigning against the renewal of the Ghana Water Company Ltd’s contract with Aqua Vitens Rand Ltd. The Minister for Water Resources, Works and Housing began dropping hints that the contract would not be renewed.

But why? Surely the private sector, with its performance, efficiency and revenue targets, could tackle the huge problem of non revenue water? Non revenue water is any water supplied by the water company that isn’t paid for, because of unpaid bills, water leaking from pipes, or water connected illegally. In the late 1990s, Ghana Water Company Ltd’s non-revenue water stood at 50-51%, way above the World Bank’s 15% target.

On all major contractual obligations, however, Aqua Vitens Rand Ltd failed, a contract, furthermore, that they had got on the cheap because it required no investment on their part whatsoever; it was a management contract, not a lease contract. Aqua Vitens Rand Ltd failed to decrease non-revenue water, they failed to increase the production of water, and they failed to improve bill collection. Service delivery (not surprisingly) failed to benefit from reducing the number of workers, i.e. cutting the cost of wage bills.

Five days after Aqua Vitens Rand Ltd’s contract wasn’t renewed, the Minister of Water Resources, Works and Housing announced the setting up of the 100% state owned Ghana Urban Water Company Ltd, a subsidiary of the Ghana Water Company Ltd, to replace Aqua Vitens Rand Ltd, with a one year tenure ending in June 2012.

Leonard Shang Quartey co-ordinates the Essential Services Programme at The Integrated Social Development Centre (ISODEC), the campaigning NGO which spearheads the anti-water privatisation coalition. ‘This whole idea about Ghana Urban Water Limited, I don’t think it’s necessary,’ Quartey said in June 2011. ’We have to focus our efforts on GWCL [Ghana Water Company Ltd] and make it workable.’ And it’s not as though Ghana doesn’t have water – the mighty Volta Lake is one of the world’s largest reservoirs.

June 2012 and what happens next? The interim Ghana Urban Water Company Ltd still exists. According to Quartey and Oxfam GB’s Alhassan Adam (telephone interviews June and May 2012), the World Bank is pressurising the government to return to the privatisation option. But, Quartey said, any form of privatisation is unacceptable to the anti-water privatisation coalition. They want a strengthened and restructured Ghana Water Company Ltd, that is, a public water authority charged with the provision (as opposed to the cost recovery) of clean water. The issue has very little to do with management, as Aqua Vitens Rand Ltd’s failure proved. ‘The bulk of the problem,’ Quartey said, ‘lies in financing.’

It’s worth remembering that during colonial occupation, African economies were organised primarily for the extraction of raw materials to their northern ‘masters’. Political independence did not bring economic independence, and the advent of IMF and World Bank economic restructuring from the 1980s onwards, driven by conditions on loans and grants, has maintained extractive exploitation. According to Quartey, Public Private Partnership, as in the Aqua Vitens Rand Ltd debacle, is still the World Bank’s preferred privatisation vehicle.

What solutions are there? Quartey and the coalition want increased government spending: the water sector is more than 80% donor funded. But Ghanaians can finance their water sector themselves. Since 2010, the country has produced oil. It’s one of the world’s leading gold and cocoa producers. Taxation needs to be properly regulated, in particular corporate tax loopholes blocked. Last year’s increase in corporate tax on mining companies was a step in the right direction, Quartey said.

Ghana is a wealthy country, as is Africa as a whole. The Ghanaian government, with a little help from the anti water privatisation coalition, need not submit to World Bank pressure. And then there’s China.

  Judith Amanthis is a freelance writer and journalist based in London.

END NOTES

1. Alhassan Adam , ‘Urban Water Policy Reforms in Ghana: Power, Interest and Performance’,
Dissertation for Masters in Public Administration, June 2011

2. ibid

3. Report of the International Fact-Finding Mission on Water Sector Reform In Ghana, August 2002, http://cesr.org/downloads/factfindingmissionGhana.pdf

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