Water in Africa: Sustainability in frontier markets
October 26, 2012
Over the coming decades the continent of Africa, and particularly the countries of Sub-Saharan Africa, face a challenge: How to achieve development and growth in a way that is secure and sustainable, against a back-drop of a more unpredictable and extreme climate, simmering geopolitical tensions (and in some cases open conflict), and significant socio-economic pressures.
The ability to effectively manage water resources will be central to the region’s ability to cope and flourish. Sub-Saharan Africa has a relatively plentiful supply of rainwater, but it is highly seasonal, unevenly distributed across the region, and there are frequent floods and droughts. The greatest amount of rainfall occurs along the equator, especially in the area from the Niger Delta to the Congo River basin, and in western and central Africa rainfall is variable and unpredictable.
The geo-political context cannot be understated. About one-third of the world’s major international water basins exist in Africa and virtually all sub-Saharan African countries, and Egypt, share at least one international water basin. According to the latest edition of the UN World Water Development Report, there are between 63 and 80 trans-boundary river and lake basins and over 90 international water agreements to manage shared water basins across the region. One country’s economic growth and development, including greater utilisation of water for agriculture, industry and energy, cannot be done at the expense of another.
But what are the implications for large multi-national companies investing in African markets, or big regional players with a stake in Africa’s future? I think they are twofold:
Firstly, all major growth initiatives and investments in sub-Saharan Africa must be water-aware. The challenges associated with water and the constraints to growth will vary from one location to another. Therefore having an awareness of the risks and opportunities related to water in a particular location, will be key.
Secondly, water must be a central theme when investing in community programmes or other social investment initiatives in water stressed locations. This does not have to be at the expense of other priorities such as health, education, innovation, job creation or access to energy. Rather, water and other social priorities should be seen as mutually reinforcing and complementary. HSBC’s US$100 million Water Programme, a collaborative partnership with WWF, WaterAid and Earthwatch, targeting the world’s most populous water basins, is one example of how a proactive, partnership-led approach to tackling water issues in water-stressed locations can be done. It is also a good example of how a strategic community investment programme can be targeted to deliver sustainability benefits and secure growth opportunities in markets where water might be a constraint to growth.
All around the world, water is emerging as a major sustainability challenge facing societies, in terms of availability, access, quality and allocation. By better understanding the risks and opportunities faced in relation to sustainable water use and changing weather patterns, businesses can begin to take proactive steps to avert the negative repercussions associated with these trends. For more information on how companies can begin to respond to the emerging challenges associated with water, please see our recent publication – Water means business: Corporate perspectives on water.
Yohan Hill is an Associate Director with Corporate Citizenship and has extensive experience in corporate social responsibility and sustainability.
Water in Africa by numbers:
Between now and 2050, Africa’s population will double to reach 2.1 billion, the fastest growth rate of any region in the world.
About 66% of Africa is arid or semi-arid and more than 300 of the 800 million people in sub-Saharan Africa live in water-scarce locations.
In sub-Saharan Africa, only 31% of the population uses improved sanitation facilities, with large differences between urban coverage.
The economies of most African countries rely on rain fed agriculture as a major source of economic activity. Agriculture represents approximately 20% of the region’s GDP, employs 60% of its workforce, constitutes 20% of its export goods and provides 90% of rural incomes.
Agriculture is by far the largest user of water in Africa, accounting for approximately 87% of total water withdrawals.
In order to achieve food security by 2025, Africa needs to increase its agricultural output by 3.3% per year.
The potential investment needed for small-scale irrigation systems in Africa is approximately $18 billion, and $2.7 billion for large-scale systems over the next 50 years.
Climate change and climate variability are likely to severely compromise agricultural production and food security in many African countries.
75% of Africa’s population has no access to electricity.
Hydropower supplies 32% of Africa’s energy, but it is underdeveloped. Only 3% of its renewable water resources are exploited for hydroelectricity.
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