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Global Water Bankruptcy Threatens African Utilities’ Survival

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Cape town: A new United Nations report highlights a troubling shift from a global water crisis to a state of water bankruptcy, with African utilities already revealing the dire implications of this transition. According to African Press Organization, the report titled "Water Security and Infrastructure Volume 2026," released by ESI Africa of VUKA Group, delves into this crucial shift and evaluates African utility data. This transformation from a crisis, a temporary shock, to bankruptcy, an irreversible condition, signals that long-term water usage has outpaced renewable inflows, leading to significant degradation. Currently, nearly 75% of the global population resides in countries identified as water insecure. Since 1970, the world has lost 410 million hectares of wetlands, equivalent to the size of the European Union, with an economic cost of $5.1 trillion. Glacier mass has decreased by over 30%, and 70% of major aquifers are experiencing long-term decline. ESI Africa's report on African utilities highlig hts concerning trends, with non-revenue water, representing water produced but not billed, surpassing 35% in countries like South Africa, Tanzania, and Mozambique, and over 50% in Zimbabwe and Kenya's largest utilities. South Africa's non-revenue water rate stands at approximately 47.8%. A 2017 World Bank study found that nearly half of 120 utilities across 14 African countries could not cover their operating and maintenance costs through revenue alone, relying on government transfers that ultimately discouraged financial self-sufficiency. Despite efforts, the trend remains unchanged, with ESAWAS's 2023/24 benchmarking showing a drop in average cost coverage from 99% to 91% and collection efficiency from 107% to 87%. DBSA's Bothwell Manikai emphasized the need for improvement in addressing water losses, while AfDB's Zakhele Mayisa identified upstream issues like land tenure disputes and inadequate baseline data as obstacles to financing water projects. The report also highlights sectors that need to adapt , shrink, or pay more, including mining, thermal power, agriculture, and data centers. By 2030, AI-related water consumption could reach 9.3 trillion liters globally, impacting regions like Sub-Saharan Africa. The focus is not on building more infrastructure, but rather on nature-based capital investments, water-bankruptcy risk screening by lenders, and global monitoring. As ESI Africa Editor-in-Chief Nicolette Pombo-van Zyl notes, future successful utilities will be those that minimize water loss. The full volume includes 17 articles exploring finance, metering, and policy responses within the sector, published in collaboration with Conlog and the STS Association.

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