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South Africa and Australia, both arid countries with historical ties to the British Empire, face significant water management problems. 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 the disparities, it becomes evident that contemporary South Africa is grappling with a scenario resembling a failed state, particularly evident in the breakdown of the electricity and water services sector. This raises a fundamental question: why is the South African water sector faltering while its Australian counterpart thrives?
Addressing the collapse of the South African water sector requires a nuanced understanding rooted in historical context. The origins of the problem can be traced back to the British Empire’s consideration of federalism during the Anglo-Zulu War. Although federalism found success in Canada and Australia, it failed to take root in South Africa.
Fast forward to the present, South Africa operates as a unitary state with a centralised water policy and national water law. This uniform approach leaves little room for local variation. Despite water being a constitutional right and given that free basic water is guaranteed to all, the sector faces problems 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 federal structure facilitates a diverse array of state policies and laws, promoting adaptability to local conditions. Boasting more than 30 distinct water authorities, each tailored to meet local needs, Australia thrives on a justiciable water right system that allows private ownership. Market forces drive water to its most productive use, and investor confidence is a cornerstone in decision-making.
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, while innovative technologies are embraced at the utility scale.
In contrast, South Africa’s water sector’s lack of innovative approaches and rigid, standardised methodology has stifled local imagination. The state’s hostility towards private capital has rendered the water sector generally uninvestable. Although 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 problems. Seawater desalination, where it exists, is confined to small package plants in distressed municipalities along the coast, often seen as unsustainable.
Australia stands out for its innovative solutions. With a vibrant private sector driving constant technological advancements, groundwater is a key element in most utilities, integrated into the grid and accounting for about 40% of the total resource. Building codes align with water conservation, ensuring rainwater harvesting and aquifer recharge are pursued at various levels, including suburb and city. The management of sewage, increasingly sophisticated water recovery from waste, and seawater desalination at utility scale funded by private capital showcase Australia’s forward-thinking approach.
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. Suspicion towards capital and technology further limits the sector’s development. In contrast, Australia’s decentralised approach fosters vibrant water utilities capable of attracting both capital and technology. Entrepreneurs’ initiatives in desalination and water recovery programmes inspire investor confidence, leading to capital influx and secure, water-efficient local economies.
Professor Anthony Turton is a water expert at the Centre for Environmental Management at the University of the Free State.