Africa's water sector thirsty for investment

In a recent interview on CNBC Africa, Jean-Pierre Labuschagne, Infrastructure and Capital Projects Leader at Deloitte Africa, shed light on the concerning state of water infrastructure investment in Africa. Labuschagne revealed that water projects only account for a meager 1.3% of total infrastructure investment on the continent, as highlighted in the 2016 Construction Trends report by Deloitte Africa. This stark contrast is evident when comparing the 15 water projects valued at $4.8 billion to the 271 non-water infrastructure projects valued at a staggering $319.2 billion. Despite the vital role that water plays in various aspects of daily life, from agriculture to energy generation, the sector continues to struggle to attract sufficient investment. Labuschagne emphasized the importance of addressing this disparity in investment, particularly in light of the profound social impact that inadequate water infrastructure has on communities, especially in rural areas. Notably, water scarcity not only affects access to clean drinking water but also has repercussions on education, economic development, and overall quality of life. Labuschagne pointed out that the lack of visibility and perceived return on investment are key reasons why water infrastructure projects do not attract financiers as readily as other infrastructure ventures such as roads and bridges. Furthermore, the challenge lies in balancing the fundamental human right to access water with the financial viability of water projects. While many see water as a free resource that should not be monetized, the reality is that adequate financing is essential for building and maintaining water infrastructure that meets the needs of growing populations. Labuschagne highlighted the potential for private sector involvement in water projects, emphasizing the importance of innovative financing models to make such ventures economically viable. He also acknowledged the critical role played by non-state actors and not-for-profit organizations in driving initiatives to improve water access in Africa. However, there is a pressing need to shift the trend towards increased investment in water infrastructure to ensure sustainable development and inclusive growth on the continent. Labuschagne underscored the significance of internal water network distribution systems in delivering water from large-scale projects like dams to urban centers and remote communities. The challenge lies in not only rehabilitating existing infrastructure but also expanding and optimizing water distribution networks to meet the evolving needs of African societies. As discussions around the bankability of water projects continue, there is a growing consensus among financiers and development institutions on the potential for socially-oriented investments in the water sector. Labuschagne highlighted the importance of structuring water projects in a way that aligns with financial and economic imperatives, thereby making them more attractive to investors. While the road ahead may be complex, with various stakeholders involved in shaping the future of water infrastructure in Africa, Labuschagne's insights offer a compelling call to action for prioritizing investment in this critical sector.