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Privatization of the water sector; A double – edged sword

Privatization of the water sector; A double – edged sword

SDG 6

SDG 6 aims to have universal access to water and sanitation for all by the year 2030. In less than 6 years to the targeted year, this vision looks like a far-fetched dream. Almost half of the world’s population still does not have access to water and proper sanitation, the majority of whom are based in the developing world, Africa bearing the brunt of this shortage. This is a wake-up call to governments that SDG 6 may never be achieved by their countries in the next few years.

In realization of the above glaring reality, countries like Kenya are rushing to amend their Water Laws to include privatization of the water sector. This involves enacting laws to include the private sector in the supply of water to the public.

Privatization journey in Kenya

The proposed legislation – Water (Amendment) bill 2023, aiming at allowing the government to enter into water purchase agreements with the private sector, was tabled in Parliament in June 2023 and passed by the National Assembly in August 2023. Already the bill has gone through the second reading in the Senate as the government aims to attract new capital of about KES 500 billion to bridge the funding gap in the water sector.

This is a welcome move especially to us players in the water private sector as we look forward to assisting the government to meet its target in providing safe and clean water to all and in support of SDG 6. As we ponder on this move, it is also good to take the bull by its horns and ask ourselves pertinent questions that relate to the privatization of the water sector.

Water; a public good

We all agree that water is a public good and every citizen should have access to it. Water is so important in our lives that if possible as the right to life is enshrined in our constitution, maybe the right to water should also be included in the Bill of Rights, because water is life. Unfortunately, this has not been the case for eons and so many parts of the country, not only rural and peri-urban areas but also urban areas have never seen a drop of this gold liquid flowing through their taps for a very long time.

The government institutions mandated to provide water to households have been marred by poor governance leading to accumulation of huge debts thus provision of water has remained a long-piped dream for many. Climate change exacerbates water insecurity because it contributes to more frequent and severe droughts, floods and extreme rainfall, rapid declines in groundwater and the deterioration of water quality.

Kenya Innovative Finance Facility for Water(KIFFWA)

Pros and Cons of Privatization

There are several reasons why it will be good for the private sector to actively participate in provision of water services to the masses. These pros include: –

  • Increased efficiency as private companies have a reputation for being more efficient than government agencies.
  • Injection of capital for infrastructure development thus better water facilities in the country and also creation of jobs.
  • Better management of the water sector as private companies make decisions faster unlike government which has a lot of bureaucracy.

The cons of privatization include: –

  • Higher water bills for consumers making water unaffordable for low- income households.
  • Lack of regulation thus possibility of price collusion among the private players in the water sector
  • Loss of accountability/ responsibility by the private sector players as focus is on profitability of their operations.

Food for thought……

We in the private sector ask ourselves the following questions: –

  • Are there proper policies to cushion our investment in the water sector as we collaborate with the government to provide water to the public?
  • Is the public ready to absorb the costs that will be passed to them as a result of this investment?

Which way forward

We call forth for a balanced approach between the government and private sector stakeholders in tackling the issue of water scarcity in the country. This more than ever necessitates more involvement by both players in coming up with a common ground that will benefit both the public and private water sector players. We look forward to a time in the future where clean water will be accessed by all households at an affordable cost. Until then, we in the private sector will continue playing our part in the water ecosystem be it pure drinking water, hydropower, integrated water resources management, irrigation, water transport, etc.

For more information, kindly contact [email protected]

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