While there are lessons to be learnt from the SA response to the energy crisis, we need to appreciate that the water crisis is significantly more complicated and will represent Africa’s next big leadership challenge.
As Africa’s most industrialised and financially sophisticated economy, the SA response to the load-shedding crisis provides useful insights into various facets around infrastructure challenges. This included the development of enabling policy, the importance of public-private partnerships, and the unlocking of funding mechanisms.
However, water is undoubtedly the next major infrastructure hurdle — and its challenges are even more urgent. Firstly, access to water is more politically charged than access to electricity. It is a fundamental right, enshrined in the Bill of Rights, which states that everyone has the right to sufficient food and water. This brings land reform into the discussion — a topic already fraught with emotion.
Secondly there is the question of privatisation — or, more correctly, democratising access to water infrastructure. One of the key learnings that came out of the energy crisis in SA was that individuals or businesses that had the financial means to invest in solar solutions were able to enjoy a better quality of life compared to those who could not.
The government will need to work with the private sector to tackle the water challenge but it needs to be done in a manner that does not drive further inequality. Language around the “privatisation” of water or private sector participation needs to be considered more carefully.
Thirdly, there is a very real economic effect. SA’s water infrastructure need over the next 10 years is in the order of hundreds of billions of rand, causing business continuity risk. Water scarcity issues could reduce SA’s GDP by 0.44% by 2030, affecting water-intensive sectors such as agriculture and agri-processing.
Despite the magnitude of these challenges there are reasons to be optimistic about the opportunities around water. While Africa was behind the curve when it came to the energy transition — both from a public and private sector perspective — the right discussions are now starting to take place, not only for electricity but for water as well.
Until recently water was not a CEO-level topic, but we are seeing a range of sectors starting to take notice of its importance and how it will influence supply chains, property developments, food security, community engagements and even town planning. Leadership teams are recognising that the cost of inaction is simply too high and that the risks are both financial and reputational in nature.
Samsung, in its Water Stewardship report, calculated that its water usage would double by 2030 from 2021 usage. Meanwhile, media reports highlight that soft-drinks manufacturer Coca-Cola was ordered to close two of its Indian-based bottling facilities in 10 years as it faced local resistance over water use.
Closer to home, in SA the discussion goes beyond water scarcity but requires a mapping of the broader water ecosystem so that we can respond to the diverse spectrum of challenges. In the Eastern Cape recent floods caused R500m in damages and directly influenced the ability of the province to attract investment as well as straining existing public sector infrastructure including dams and roads.
On the other end of the spectrum, the country’s economic hub, Gauteng, has been in the news with stakeholders from business, government and civil society talking about a “Day Zero” scenario where taps could run dry in the next five years. Overlaying these along with the recent floods in KwaZulu-Natal and the Western Cape and Northern Cape, we can then work with governments and municipalities to develop town planning models for more resilient ecosystems.
We have been involved in two standout pieces of work in Africa and Asia which encapsulate this. In East Africa we have demonstrated and quantified that investing in water resilience measures builds a more robust food system and subsequently reduces food insecurity for millions of people in the Horn of Africa. This work was undertaken as part of the Water Resilience Programme and is an example of how the public and private sector can work together to meet sustainability goals.
In Asia we often say that “the water has missed the tech bubble” and we have been able to work on artificial intelligence (AI) models that not only look at issues like allocations and pricing, but can be utilised to dynamically allocate water across the rice sector. This provides a real-world example of why it is critical to foster and accelerate a culture of investing in water sector technology.
Looking at any one natural resource in isolation is not the solution, as they are all interconnected. However, in a nature-led approach, water is the starting point and to ensure a water-secure future we must mitigate the risks to water-dependent value chains and build adaptation and resilience to water-related hazards.
Leadership teams in both business and the government who proactively address water strategies have the potential to be game-changers, and we look forward to partnering with these organisations to navigate this complex challenge.
• Muruven is associate director at Boston Consulting Group.
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