Whilst South Africa’s water challenges seem daunting, they also present an opportunity to invest in water security that will realise social and economic developmental objectives. Photo: Delwyn Verasamy
South Africa remains one of the driest countries in the world with drought conditions over the past years placing additional pressure on the country, constraining economic growth and hampering livelihoods. As articulated in the National Water and Sanitation Master Plan, South Africa is facing a water crisis caused by inadequate water infrastructure maintenance and investment, recurrent droughts driven by climatic variation, disparities in access to water and sanitation and deteriorating water quality. A supply and demand gap of circa 17% has been projected by 2030 and the gap is expected to increase to 30% with climate change impacts considered. Other challenges include institutional weakness at municipal level, high reticulation losses and an over-extended surface water system with limited scope for further development.
Whilst South Africa’s water challenges seem daunting, they also present an opportunity to invest in water security that will realise social and economic developmental objectives, with gains in health, education, energy, food security and more. With smart management, collective action across all the role players, focused investment, including platforms that match funding sources to investment opportunities and water stewardship, South Africa can build a resilient water future that supports thriving municipalities, productive farms and water security assurance for today and the coming generations.
In addition, these challenges also highlight where we can maximise impact from modernising infrastructure, improving maintenance and adapting to a changing climate. We have a real opportunity to close the projected supply gap by 2030 and build a more sustainable, resilient water future.
Unlocking Investment
It is encouraging to see the heightened focus on water through Operation Vulindlela (OV) to accelerate reinstating the Blue Drop, Green Drop and No Drop water quality monitoring systems, streamlining and improving the water-use license application processes and enhancing the role of Private Sector Participation in the Water Sector. The OV is a joint initiative by the Presidency and National Treasury that was established in October 2020 to accelerate implementation of priority structural reforms. OV has made meaningful strides to stabilise South Africa’s energy supply and establish a competitive logistics network, thus opening pools of capital that will also benefit water infrastructure.
South Africa’s Public Private Partnership (PPP) is key to unlocking the massive infrastructure investment opportunities. The South African government estimates that it will require R3.2 trillion (US$168 billion) from the private sector to meet its infrastructure needs by 2030. Currently South Africa has several large-scale water projects that can be funded through PPPs. These will boost employment, save costs, improve water security for communities, optimise efficiency and improve governance amongst others. PPP projects like Vaal Gamagara and OMM can be used as novel models or prototypes in the water sector.
In the 2024‑27 Medium Term Expenditure Framework (MTEF), the Department of Water and Sanitation has been allocated R134.909 billion. This includes R36.305 billion in conditional infrastructure grants (for water services and regional bulk infrastructure) and large allocations for the water trading entity.
Across South Africa, significant progress is being made to strengthen the country’s water infrastructure. Major bulk-water supply projects—valued at approximately R139 billion are currently underway in multiple provinces. These strategic initiatives aim to improve water security, expand delivery capacity, and support long-term economic growth. From large-scale inter-basin transfers to regional pipeline upgrades, these investments signal a strong commitment to ensuring sustainable water access for all South Africans.
The Outlook
The National Planning Commission estimates that achieving South Africa’s sustainable water infrastructure objectives will necessitate annual capital and operational investments ranging between R7 billion and R14 billion—significantly exceeding current funding allocations.
Looking ahead, the 2025 Budget Review and related reports indicate that we will need R256 billion annually to ensure water security to 2050, with total investment required for water security and universal access reaching R7.2 trillion by 2050.
Call to Action
To bridge the gap between current water usage and sustainable, secure supply, South Africa needs to deepen investments and improve management across the board. Some urgent actions will include:
Technology & Automation: Scale up telemetry, smart meters, AI / sensor‑based leak detection, satellite rainfall forecasts, and water quality monitoring. These pay for themselves in reduced waste and better service.
Agricultural Reforms: Since the bulk of water is used in agriculture, introducing precision farming, drought‑resistant crops, modern irrigation, and support from Land Bank/IDC for such transitions is essential.
Municipal Governance & Capacity Building: Many failures originate at local government level due to weak billing systems, poor maintenance, or lack of technical capacity. Stronger oversight and skills deployment are needed.
Community Engagement & Education: Reducing per capita consumption (especially in high‑use areas), promoting water saving in households, and awareness of water scarcity should no longer be optional.
Securing South Africa’s water future requires a collective effort. It is collaboration across all stakeholders including, Private Sector, Public Sector, Policy Makers, Regulators and Communities to build a resilient and sustainable water system.
Zen Dlamini is Standard Bank’s Executive Head for Infrastructure and Public Sector.