[Peace-discuss] Water privatization in Africa (fwd)

[Alfred Kagan]

>  http://www.yellowtimes.org/article.php?sid=3D369
>
>''Water privatization in Africa''
>Printed on Thursday, June 06, 2002 @ 09:02:10 EDT
>
>  By Wole Akande
>YellowTimes.org Columnist (Nigeria)
>
>(YellowTimes.org) - Water privatization is a big issue in many
>African countries. Investors say it brings efficiency. Opponents
>say it hurts the poor. Whatever one believes, the poor have no say
>in the matter. In Tanzania, privatizing the Dar es Salaam Water
>and Sewerage Authority (DAWASA) was one of the conditions given if
>the country was to receive the HIPC debt relief. Recently, the
>government raised a credit to fund the $145 (US) million upgrade
>of DAWASA, needed to sell off the company at a lower price,
>effectively increasing the national debt it seeks to reduce.
>Accordingly there are concerns that the privatization will produce
>higher water bills or even become another corruption trap.
>
>The African Development Bank (ADB) on May 31st sent out a release
>saying it had signed an agreement with Tanzanian Deputy Minister
>for Finance, Alhaji Adbisalaam Issa Khatibu, for a loan of
>approximately $47 million. The loan was to partially finance the
>"Dar-es-Salaam water supply and sanitation project." The shortfall
>of $98 million will be borrowed from the World Bank, and, more
>surprisingly, from the European Investment Bank and Agence
>Fran=E7aise de Developement.
>
>According to ADB, the "project" consists of improving "in terms of
>accessibility, quality, reliability and affordability [the water]
>services to the population." Further, the project would
>"contribute to poverty reduction and improve the economic and
>social well-being of the people of Tanzania by providing them with
>a better access to clean water, thereby, reducing the incidence of
>water borne diseases among the vulnerable groups."
>
>The concept sounds promising, but critics don't agree that
>"poverty reduction" is the real aim of ADB's Dar es Salaam
>project. The project's aim, they hold, is merely to make it
>possible to find a buyer for DAWASA. Ominously the company, owned
>by the Tanzanian Ministry of Water, will need to significantly
>increase its value due to the new investment in infrastructure and
>billing. In view of a recent privatization scandal many skeptics
>fear the project only will enrich the Tanzania's president's
>family.
>
>The scandalous privatization of the Tanzania Electricity Supply
>Company (Tanesco) shocked Tanzanians. The small South African
>engineering firm NET Group Solutions on 2 April 2002 beat several
>foreign companies to sign a lucrative contract to run Tanesco.
>
>During April, it turned out that NET Group Solution was "a very
>small firm" with inadequate capacity to handle Tanzania's national
>electricity grid. Then it became known that the firm's Tanzanian
>partner was a company owned by President Benjamin Mkapa's
>brother-in-law. "Most shocking was the fact that the directorship
>of the local firm includes primary schoolchildren," wrote the
>Nairobi-based "East African" in an editorial. After the scandal
>was out, the government rejected a parliamentary demand to reveal
>the details of Tanesco's management contract. The privatization
>process now continues secretly.
>
>In the last five years, the International Monetary Fund (IMF) has
>been insisting on privatizing DAWASA, as a condition to include
>Tanzania in the enhanced Heavily Indebted Poor Countries (HIPC)
>initiative. HIPC inclusion provides Tanzania with a significant
>debt service relief, theoretically worth billions of dollars.
>Unfortunately, conditional structural reforms, including water
>supply privatization, however often are a high price to pay.
>
>This is not an IMF demand that is unique to its Tanzania policy.
>The fund is promoting water supply privatization all over the
>African continent, often causing protests from civil society and
>international anti-globalization groups. Although African
>state-owned water suppliers mostly are ineffective and run-down,
>they at least have provided many urban poor people with cheap or
>free water. Protesters claim these international takeovers are
>excluding the poor from an affordable clean water supply.
>
>In all fairness, the water supply and sanitation of Dar es Salaam
>indeed doesn't have the best of reputations. According to the
>DAWASA's "owner" Festus Libu, Tanzanian Minister of Water,
>"infrastructure built in the 1970s is deteriorating rapidly." It
>is estimated that 50 percent of the water is lost through leakage
>and illegal links to the system. Minister Libu insists DAWASA is
>suffering "from poor billing and revenue collection and inadequate
>water sources both in terms of quality and quantity." Naturally
>after privatizing over 300 state-owned enterprises, the Tanzanian
>government agrees to the IMF cure of privatizing DAWASA.
>
>Every day 30,000 children in the Third World die of preventable
>causes. Many of them could be saved if they had access to safe
>water. The World Bank argues that governments in impoverished
>countries have to privatize their water supply and distribution
>systems if they are to get the efficient delivery of water that is
>needed.
>
>On the face of it, the argument makes sense. The adequate supply
>of water and other public services is too often frustrated by
>inadequate funding, inefficient bureaucracy or lack of political
>will. Promoters of private ownership say it brings investment and
>cost-effective service.
>
>Experience and common sense say otherwise. Private investors
>aren't attracted by poor and rural communities. Any improvements
>that might come with private ownership are in areas that generate
>profit. Private water, telecommunications and electricity
>companies tend to focus on efficiency in collecting tariffs, but
>not on improving service. Costs usually leap up quickly, annoying
>middle class and wealthy customers but leaving the poor without
>service at all.
>
>According to the Congress of South Africa Trade Unions,
>privatization has cost 200,000 people their jobs. In poor Soweto
>neighborhoods, up to 20,000 homes a month are disconnected from
>electric service for nonpayment.
>
>People in affected communities don't have a voice in how or if
>they want their services privatized. People in impoverished
>countries want efficient service. In some, privatization may be
>the way to go. They need to be allowed to choose if it is
>appropriate for them.
>
>A May 2001 report by Kate Bayliss, a Research Fellow at the
>University of Greenwich, Britain, titled "Water privatisation in
>Africa: lessons from three case studies" concluded that "high
>prices and disconnections must mean that the poorest segments of
>society are likely to be the main losers from the privatisation
>process. Where this increases use of unsafe water sources, the
>consequences will be disastrous for public health."
>
>[Wole Akande, a former opinion columnist with Ireland's Irish
>Examiner newspaper, is a freelance journalist. In addition to his
>work with YellowTimes.org, Wole also maintains
>http://www.abeokuta.org, a Nigerian community website.]
>
>Wole Akande encourages your comments: wakande at YellowTimes.org
>
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>
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-- 


Al Kagan
African Studies Bibliographer and Professor of Library Administration
Africana Unit, Room 328
University of Illinois Library
1408 W. Gregory Drive
Urbana, IL 61801, USA

tel. 217-333-6519
fax. 217-333-2214
e-mail. akagan at uiuc.edu