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South Africa and Australia, both arid countries with historical ties to the British Empire, face significant water management challenges. Despite common legal and parliamentary systems, the two nations diverge in their approaches to water sector governance, leading to markedly different outcomes in economic prosperity.
In examining disparities, it is evident that contemporary South Africa is grappling with a scenario resembling a failed state. Evidence is the breakdown of the electricity and water services sector. A fundamental question is – why is South Africa’s water sector faltering while Australia’s thrives?
Addressing the collapse of the country’s water sector requires a nuanced understanding rooted in historical context. The origins of the issue can be traced back to the British Empire’s consideration of federalism during the Anglo-Zulu War. While federalism succeeded in Canada and Australia, it failed to take root in South Africa.
Presently, South Africa operates as a unitary state with a centralised water policy and national water law. This approach leaves little room for local variation, resulting in a cookie-cutter model applied nationwide. Despite water being a constitutional right and given that free, basic water is guaranteed to all, the sector faces challenges such as high levels of unaccounted-for water, leakages, and poor management. The absence of justiciable water rights and the separation of water from land ownership hinder private sector involvement. Consequently, utilities are reliant on government bailouts, a situation exacerbated by failing water and electricity grids, diminishing the tax base, and escalating unemployment.
Australia’s flourishing water sector is due to innovation. Australia’s federal structure facilitates a diverse array of state policies and laws, promoting adaptability to local conditions. Boasting over 30 distinct water authorities, each tailored to meet local needs, Australia thrives on a justiciable water right system that allows private ownership.
Australia’s innovative and market-oriented approach has resulted in well-managed utilities with robust balance sheets. The ability to raise capital from the bond market reduces reliance on public funds for bailouts. Groundwater plays a vital role, accounting for around 40% of the total resource, while innovative technologies, such as seawater desalination, are embraced at the utility scale.
South Africa’s water sector is uninvestable and is facing challenges. A lack of innovative approaches, coupled with a rigid, cookie-cutter methodology has stifled local imagination. The state’s hostility towards private capital has rendered the water sector generally uninvestable. While some large water boards still maintain strong balance sheets, the growing debt burden from non-payment by municipalities poses a threat.
Limited development of groundwater at utility scale, coupled with a reluctance to replicate successful initiatives, further compounds the challenges. Sea water desalination, where it exists, is confined to small package plants in distressed municipalities along the coast, often seen as unsustainable.
The weakness of South Africa’s water sector lies in the highly centralised approach, resulting in ineffective, one-size-fits-all solutions. Local authorities often lack imagination, relying heavily on taxpayers and hindering innovation. In contrast, Australia’s decentralised approach fosters vibrant water utilities capable of attracting both capital and technology.
- Prof. Anthony Turton is a water expert from the Centre for Environmental Management at the University of the Free State.
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