Drinking water for rural and semi-urban areas in Africa: the need for private sector involvement

Sustainable drinking water services are crucial for the health, well-being, and economic development of populations. Access to this vital resource is essential, particularly in rural and semi-urban areas of sub-Saharan Africa, where it plays a key role in regional security and development.

THE PRIVATE SECTOR, AN ESSENTIAL PARTNER

However, unlike urban areas, drinking water services in small towns and rural areas have never been seen as economically viable, resulting in them remaining the responsibility of the state by default. Despite decades of investment and successive development programs, these services are still not functioning properly. With continuing demographic growth and increased demand, many African countries are struggling to ensure access to drinking water for their populations. The lack of investment and chronic inefficiencies in the sector’s management and maintenance systems mean that new solutions are necessary. Private sector involvement is essential in facing these challenges; while it is not the only solution, sustainable solutions may be challenging to find without it. Although various private sector models exist, few have been implemented in West Africa thus far.

The Odial Solutions Group, through its subsidiaries Vergnet Hydro and Uduma, has been developing viable business models adapted to local contexts for over 15 years and has co-invested in several ambitious innovative projects. By utilizing new technologies and appropriate management techniques, the group has successfully provided sustainable drinking water services in areas where traditional solutions have failed. For instance, Uduma has implemented,automatic standpipes in neighbourhoods suitable for this technology, creating a completely autonomous water distribution system powered by solar panels. Users receive a key that they can add credit to, allowing them to access water easily from the standpipes.

SOLUTIONS ADAPTED TO THE CONTEXT

The private sector possesses several inherent strengths that are essential in enhancing the impact and sustainability of drinking water services. These include efficient management practices, technical expertise, innovation, access to advanced technologies, and the ability to expedite project implementation. By ensuring the availability of necessary resources to compensate operators, infrastructure maintenance, renewal, and continuous service operation can be guaranteed, promoting long-term viability and profitability.

In contrast to urban areas, rural areas and small towns face challenges such as dispersed populations, lower incomes, and difficulties in affording water services. As a result, balancing the business model in these areas is more financially challenging. Management systems and operators must adapt to these unique circumstances. Unlike large urban utilities, rural and semi-urban regions require small and medium enterprises (SMEs) capable of adjusting to local conditions. Although these organisations may possess fewer resources and be more vulnerable, they benefit from flexibility and proximity, critical aspects in integrating appropriate technologies to reduce management costs. However, attention must be given to their ability to secure the necessary funds to invest in the infrastructure and de-risk potential short-term losses from services. An estimated one third of the US$30 billion annual investments in the water sector are required in rural areas.

FAVOURABLE CONDITIONS

To effectively engage the private sector in operating drinking water services in small African towns, conducive conditions for success must be established. Economic constraints should be acknowledged and considered by all stakeholders, particularly governments and investors. Furthermore, regulatory frameworks need to be tailored to facilitate private sector involvement while safeguarding public interests, encompassing tariff regulations, resource protection, and equitable water access. Additionally, innovative financing solutions specific to the sector, such as targeted subsidies, low-interest loans, special public-private partnerships, and creative co-financing arrangements, need to be developed and implemented. The future of the water sector in Africa, especially in small towns and rural areas, is a critical issue not only for economic advancement but also for the continent’s social, environmental, and political stability and security. With half of Africa’s population affected, this sector serves as a pivotal vector for development. Recognizing and encouraging private sector involvement is essential in addressing these challenges, aligning with the sector’s evolving needs.