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Key Note Address at Stakeholders Dialogue on the Lagos Water Crisis, De Rembrandt Hotel, Ikeja, Lagos. 8th October 2019 by Hussaini Abdu, PhD

Introduction

Water crisis is important challenge in the world, it is even more important in Nigeria and Lagos in particular considering several sociological, demographic and economic imperatives. Most often responses to water crisis are viewed from civil engineering, hydrological and economic perspectives. My discussion this morning is about people, rights, global commitments and environment. The interest is to examine the nature of water crisis in Lagos, the response so far, implications for the poor and the imperative of sustainable to solution to the crisis.

Why Lagos?

This is not a simplistic particularization of Lagos, but a national conversation using Lagos. The example of Lagos is not only important to Lagos, Nigeria, but the entire Africa. Lagos is an important city in Africa. As a mega city, the example of Lagos is important to the rest of Africa. It is the largest city in Africa – not only in population but in economic resources. It is bigger than many other West African countries.  The GDP of Lagos is more than half of Nigeria and probably larger than any other West African country. Over 60% of commercial activities in Nigeria is around Lagos. It is one of the most unequal cities in world, where poverty and affluence duel side by side.

Lagos Water Crisis – Manifestations

Lagos is believed to have over 21 million people. Estimates suggest only one in 10 people have access to water supplied by the state utility provider. The daily water demand in Lagos is estimated to be 540 million gallons per day (MGD) and production by the Lagos State Water Corporation (LSWC) at 210 MGD. The city is faced with acute water shortage, which is having toll on the life of the people, in particular, poor and low-income earners. The unfortunate situation has compromised sanitation and public health. The cost of individual and family sources for water through water vendors is eating deep into the pockets of the poor depleting the little they have and further deepening their poverty.

In 2016, Léo Heller, the U.N. special rapporteur on the human rights to water and sanitation, raise an alarm about this crisis, after Lagos’s state governor presented a proposed budget for 2017 to the Lagos House Assembly. This crisis have been associated with and insufficient water infrastructure, unsustainable policy framework (privatization and PPP), deprioritization of water and inadequate budgetary allocation, poor citizens engagement, which a fundamental issue in urban governance and regulatory failures.

Water as a Human Right

Water is not only a fundamental human necessity – in biological, social and economic context, it is a human right. Access to water and sanitation are recognized by the United Nations as human rights, reflecting the fundamental nature of these basics in every person’s life. Lack of access to safe, sufficient and affordable water, sanitation and hygiene facilities has a devastating effect on the health, dignity and prosperity of people, and has significant consequences for the realization of other human rights. It is also an important SDG goal (goal 6), with strong implications for other goals.

People are rights-holders and States are duty-bound to providing water and sanitation services. Rights-holders can claim their rights and duty-bearers must guarantee the rights to water and sanitation equally and without discrimination. The human right to safe drinking water was first recognized by the UN General Assembly and the Human Rights Council as part of binding international law in 2010. in its resolution 64/292 of 28 July 2010.

Even before this resolution, there have been several others UN decisions that advance people’s right to water. The 54/175 of 17 December 1999 on the right to development; Resolution 55/196 of 20 December 2000, which proclaimed 2003 the International Year of Freshwater; Resolution 58/217 of 23 December 2003, by which it proclaimed the International Decade for Action, “Water for Life”, 2005–2015; Resolution 59/228 of 22 December 2004, 61/192 of 20 December 2006, by which it proclaimed 2008 the International Year of Sanitation; and 64/198 of 21 December 2009 regarding the midterm comprehensive review of the implementation of the International Decade for Action, “Water for Life”; Others include: Agenda 21 of June 1992; the Habitat Agenda of 1996; the Mar del Plata Action Plan of 1977 adopted by the United Nations Water Conference; and the Rio Declaration on Environment and Development of June 1992.

Practically every human rights treaty of the UN has a water dimension, with the 2010 resolution made copious reference to: Universal Declaration of Human Rights; the International Covenant on Economic, Social and Cultural Rights; the International Covenant on Civil and Political Rights; the International Convention on the Elimination of All Forms of Racial Discrimination; the Convention on the Elimination of All Forms of Discrimination against Women; the Convention on the Rights of the Child; the Convention on the Rights of Persons with Disabilities; the Geneva Convention relative to the Protection of Civilian Persons in Time of War, of 12 August 1949.

Human Right to Water

The human right to water entitles everyone without discrimination to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic use; which includes water for drinking, personal sanitation, washing of clothes, food preparation, and personal and household hygiene.

Right to Water

Studies in Africa, including Nigeria show that the poorest 20% of the population spend between 3 to 11% of their household income on water. This calculation does not include the cost of the time women spend on collecting water and managing water and sanitation facilities.

International human rights law demands a specific focus on those people who do not fully enjoy their rights, leading to explicitly ‘pro-poor’ development planning in many countries. It also requires a commitment to progressively reduce inequalities by tackling the discrimination and stigmatization that can lead to people being excluded from, or marginalized in relation to, water and sanitation access.

The ‘human rights-based approach’ stresses the correspondence between rights and obligations, providing a framework for Member States and other organizations that aims to ensure that respect for human rights are integrated into development plans at all levels.

Water Privatization

During much of the 1990s, water utilities worldwide experienced a wave of privatization. Lagos state with the support of the WB is one of the first state to have experimented with this in Nigeria as far back as 1989. Barely 3 years after the embrace of neoliberal policy of privatization in Nigeria through SAP in 1986.

The rationale for water privation is built on 2 hypothesis:

Fiscal hypothesis – privatization will relieve governments of the burden of investment financing water facilities, particularly in the context of fiscal pressures faced by many developing countries.

Efficiency hypothesis – that water utilities performance will improve under private ownership because it is ‘obviously’ more efficient than the public sector. This is rooted in public choice theories, which suggest that government in developing countries are challenged by a number of factors that limit their efficiency in service deliver including:

Populist pressures to keep prices below cost even though these subsidies do not benefit the poor.

Conflicts of interest because the owner is also the same as the regulator and as a result, performance contracts cannot be credibly enforced (Shirley & Nellis, 1991).

They are faced with perverse organizational incentives arising from non-credible threat of bankruptcy, weak competition, agency problems, rigidities and performance measurement problems (Weimer & Vining, 1998).

State owned enterprises are insulated from capital markets as they face soft budget constraints and therefore are not subject to market discipline.

Privatization of Water

These two hypotheses – widely supported by donors, think tanks and economists – is summarized by Franceys (1997) as follows: ‘‘private sector participation is seen to increase efficiency and introduce new ideas of finance but above all to require a new emphasis on proactive, performance oriented commercial management that aims to match the demand of its customers with their willingness to pay realistic charges and tariff.’’

Experiences around the world show the contrary. A study of 17 lease management contracts in Sub-Saharan Africa, for example did not result in any investment by the private company to poor unconnected household. Concession contracts do involve investment by private companies to extend the network; however, the commitments agreed when these contracts where made are invariably revised, abandoned or missed. For instance, about 37% of all private investments in the water and sanitation sector worldwide became distressed (or were cancelled or renegotiated), including those of the largest concessions which accounted for 80% of these commitments (World Bank, 2006).

The problem is more severe in Latin America and the Caribbean. For example, in a study of more than 1000 concessions in infrastructure granted during 1985–2000 in that region, found that 74.4% of water and sanitation concession contracts were renegotiated very soon after their award, occurring on average 1.6 years thereafter (Guasch, Jean-Jacques, and Stephane (2003). In Cape Verde, Gabon, Mali and South Africa, the story is pretty much the same.

Second, in most privatization contracts, actual investment on the ground particularly in connecting poor households often required public finance and/or guarantees from government or governments owned development banks.

Third, private water companies do not necessarily bring in new sources and volumes of investment finance. They rely heavily on the same sources that are available to the public sector. For instance, most private companies relied on sources that are also available to governments—donors, commercial and development banks, bonds and operating surplus. Private equity was rarely used by private investors. It is in the context that DFID, EU and USAID, WB, ADB are still playing important role in water sector.

Fourth, the contribution of multinational companies in water investments in poor countries is negligible and unlikely to increase. Most investors prefer to invest in middle income countries (50%) compared to low income countries (18%) where the need for water investment is greatest investment in water utilities is not significant. For instance, from 1990 to 2001, only 5% of the total private investment in all infrastructure projects in developing countries went to water investments. (Estache & Rossi, 2002).

On efficiency, Estache and other in 2005 using econometric evidence, concludes that there is no statistically significant difference between the efficiency performance of public and private operators in the water sector. They find that for utilities, ownership often does not matter as much as sometimes argued (Hall & Lobina, 2006).

A comparative study of cities in three Latin American countries by Clarke and others in 2004 – Argentina, Bolivia and Brazil. It compared cities which had private sector participation, and in cities which had no private sector involvement using household level data. They concluded that ‘‘while connections appear to have generally increased following privatization, the increases appear to be about the same as in cities that retained public ownership of their water systems.

In Africa, Kirkpatrick et al. (2004) examined 110 African water utilities, including 14 private and found no significant difference between public and private operators in terms of cost.

Despite the evidence, proponents of privatization, capitalizing on government laziness and lack of commitment to public good, continue to argue that only private corporations can fill the funding gap required to achieve the Sustainable Development Goals, including for water and sanitation. 

Public Private Partnerships (PPPs), including blended finance, are falsely promoted as a way for governments to access new capital and mitigate risk. In almost all cases the capital is not new; it’s borrowed from banks at a higher rate of interest than governments would pay. Inflexible contracts often lasting 25-30 years, force governments to prioritize ever increasing repayments over other spending priorities. This can lead to spending cuts in other areas, further weakening the rights of most vulnerable and marginalized.

Privatization and Right to Water

The major challenge to privatization of water is not just the economics of financing or efficiency, it is the implication largely for inequality and violation of poor people right to water and related human right. In September 2018, the UN a issued an groundbreaking report stressing the negative impact of privatization on human rights and the poorest in society. Philip Alston, the UN Special Rapporteur on extreme poverty and human rights criticized the World Bank, the International Monetary Fund, and the UN for aggressively promoting the widespread privatization of basic services, and governments for undermining human rights.

Privatization of water and sanitation often increases costs for governments and low income households. It has not been efficient or cost effective. It has reduced quality and undermined access, particularly for the poorest and most vulnerable in society.

Sustainable Solution 

Sustainable approach to the crisis, will require commitment to certain principles:

Recognize that access to safe, clean and affordable water is human right issues and government as duty bearer has a responsivity to promote, and ensure this right.

The poor carries the a disproportionate burden of water crisis and everything must be done to protect their interest.

Water crisis is gendered. Even among the poor, women are the biggest victims of water crisis, what ever solution is being proposed must be gender transformative and water services must be gender responsive.

Environmental friendly. Water is an important parts of our environment, it must be conserved and managed in a sustainable manner.

Recognize that there is a social and cultural dimension to water.

In the context of this, public ownership is the sustainable way recovering from the crisis. There is a fundamental difference between the principle of public service and governance and the principle  of market and profit. Market approach and commodification of to water has proved unsustainable as examined earlier and there is an increased level of reversal even in developed countries. Municipal services are being transferred back to the public institutions.

Citizens must be part of the solutions – International Financial Institutions have never addressed municipal challenges, people do. Urban governance and policy must be people driven. When people are part of policy making process, they own the policies, protect and sustain these policies. When policies are imposed on them, they reject and undermine them.

Improve water infrastructure through enhance budgetary allocation to the sector. Resources are challenged everywhere, but when government is clear with its priorities, it is able to fund it. Water must be prioritized and invested in. State may not profit out of it, but it charges and tarrif, if properly managed can sustained it.

Sustainable access and popular control of water is important to our democracy. Municipal services like water is on of the ways people can get connected to their government and value state institutions. When government abdicates its responsibilities and hands it to the private sector, it is as well handling governance to private hands. People don’t only demand services, they are also concerned about who is providing it. Water is an important service that only government can sustainably provide it.

Featured Image Source: Environmental Rights Action (ERA)

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This article was first published on 9th October 2019

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