The case for a water endowment fund


As the United Nations Secretary General Ban Ki Moon once said, our world is one of terrible contradictions. While we have an overabundance of food in some quarters, one billion people go hungry every day. A few people live a lavish lifestyle while poverty is the reality for billions of others.

And while the world has made tremendous advances in medicine, mothers in the developing world still die every day in childbirth, and children die every day from drinking dirty water.

Africa faces severe challenges in accessing clean water and sanitation, and Kenya is no exception. Inability to access clean water, sanitation and hygieneis one of the greatest obstacles to poverty alleviation and economic growth in many countries.

The World Bank’s Water and Sanitation Program estimates that lack of water and sanitation causes a downward pull on GDP of between 2-7 percent annually, while providing water and sanitation has a reciprocal positive impact on GDP.

Worldwide, about 748 million people still lack access to safe water, 325 million of whom live in sub-Saharan Africa.Twenty-eight of the 38 countries with the lowest levels of access to an improved drinking water source are located in sub-Saharan Africa.

We are warned thatif nothing is done by 2025, nearly two-thirds of the world’s population will be water stressed due to greater demands on freshwater resources by burgeoning human populations, the diminishing quality of existing water resources because of pollution and the additional requirements of servicing our industrial and agricultural growth.

These statistics tell us that it is time to invest in water and protection of water resources if we are to attain sustainable development.
There will be no technological advancement that can replace water in the forseeable future, and so we need to invest heavily in securing what precious water supplies that we have.

The responsibility of delivering access to clean water to communities, demands a broad-based approach involving the Golden Triangle approach, bringing together Government, the NGO sector and Private sector companies to address this issue.

The concept of Water Funds is one that could help in achieving this. A Water Fund is an innovative tool that pays people to protect nature’s services. I believe that introducing this tool into sub-Saharan Africa could go a long way towards addressing this broad issue. Here’s why.

Kenya is classified by the United Nations as a water-scarce country where less than one-third of population has access to an improved water source.Although, the country does have the water resources it needs to meet demand, water quality is poor and drought impacts are amplified by unsustainable land-use practices. As the population grows and farming intensifies, the wetlands that store water are disappearing and sediment runoff is polluting our watersheds.

The Nairobi Water and Sewerage Company reports that, during the wet season, their water treatment costs often increase by more than 33 percent as sediment runoff, which can be prevented, fills and chokes treatment equipment.

To offset the increase in treatment costs, funding is diverted away from activities that expand the city’s water distribution or promote water availability for marginalised urban neighborhoods.

Secondly, since a healthy watershed minimises water treatment costs, large, downstream users willingly contribute to a Water Fund as a way of shoring up their business investment. Revenues from the fund are used to promote sustainable management practices in lands upstream that filter and regulate the water supply. Funding is also used to create incentives for sustainable economic opportunities that enhance livelihoods and the quality of life for upstream communities.

Finally, an economic study conducted for Kenya has shown that impacts resulting from poor sanitation and hygiene cost the economy of Kenya Kshs.24.7 billion ($274 million) per year, or the equivalent of 0.9% of annual GDP.

Investment in improved water will also reduce other societal costs such as malnutrition, diarrhea, and cholera among others.

The concept of Water Funds has been proven to work in other nations especially in Latin America, where Coca-Cola’s main bottling partner, FEMSA, has led industry in supporting the establishment of Water Funds in Mexico.

There are also seven Water Funds in Ecuador and Colombia established by the Nature Conservancy that protect and manage more than 1.58 million hectaresof native habitat and the source of drinking water for 11 million people.

Each Water Fund has a flexible structure that can be easily adapted to meet local opportunities, needs and laws.

With support from the Inter-American Development Bank and bottling companies, six new funds are now being developed in Latin America.

This demonstrates the potential of Water Funds in tackling this challenge.

(The Writer is the President, The Coca-Cola Africa Foundation.

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