Dwindling water resources is of great concern for many countries of the world and especially water-scarce countries. Countries are forced to make rational choices between competing domestic, industrial, agricultural and commercial uses, among others. Kenya is a water-scarce country. Located in East Africa, it sits on the coast of the Indian Ocean, which serves as an important outlet. Surface water covers only two percent of Kenya’s total surface area. Per capita available water is 647m3/year. Future projections show that by the year 2020, per capita water availability will drop to 235 m3 as a result of population growth.
The Kenyan government understands that water management is essential for ecological and socio-economic development. However, the role and eligibility of the state in the provision of water supply is increasingly drawing worrying concerns. Since independence, the provision of water has been largely vested in local authorities and the central government. The economic reforms initiated at the behest of the World Bank and IMF in the late eighties have laid greater emphasis on government divestiture from public service delivery in many sectors including the water sector in order to allow a greater participation of the private sector.
However, privatisation is often confused with liberalization. With the latter, the government can retain ownership of public enterprises but commercialise them in pursuit of efficiency. This could be done through improved management and a pricing to reflect market trends. The bottom line in such cases is that neither public ownership nor public management shifts. This appears to be Kenya’s chosen path with the provision of water services as opposed to outright privatisation through ceding control to private enterprises.
Despite many policy designs to give face to privatisation, they have at best been half measures. Private sector players have been confined to peripheral roles, away from the ownership and operation of main systems.
An evaluation of Kenya’s institutional framework has indicated that no privatization has taken place in the water sector. All the institutions legalized to operate are public, yet there are no structures and systems for ensuring that they operate in a way that may bring commercial benefits. So far privatization only exists in the pronouncements of policy makers but not in the policy framework and practice. For that matter, none of the desired benefits of privatization can be achieved
Water is a scarce resource nowadays and should therefore be used in a sustainable and economical way. By paying for water at market price, consumers within a particular use will face a situation where they only consume the amount of water for which they can pay. This would cut down on wastage that is rampant within the supply management approach currently under public provision. There is however broad appeal among stakeholders for a focus on demand management as that had potential for conservation.
Those who support private initiative as a sustainable approach to service provision would rather see water as an economic good that can be exchanged in the market at a price. It does not mean that under public provision water has not been sold at a price. In practice it has been sold at a subsidised price affecting the turn over and there by thwarting reinvestment plans.
The market price is determined by demand and supply. The market price would allocate water according to competing uses, taking into account the opportunity cost.
The other reason cited by the proponents of private sector approach is the obvious failure of the public sector to provide adequate and sustainable supply to the urban population. The failure of the public sector is marked by; inability to extend services to the poor; inability to rehabilitate existing infrastructure; inability to recover cost for self-sustenance and dependence on the exchequer which has limited funds.
An evaluation of Kenya’s institutional framework has indicated that no privatization has taken place in the water sector. All the institutions legalized to operate are public, yet there are no structures and systems for ensuring that they operate in a way that may bring commercial benefits. So far privatization only exists in the pronouncements of policy makers but not in the policy framework and practice. For that matter, none of the desired benefits of privatization can be achieved. The government has a comprehensive policy framework on privatization that it needs to put in place. However, it seems the government itself is reluctant to see the policy through.
Phylis Temet is Chemical Engineering graduate and alumnus of AfricanLiberty.org’s summer seminar