Ghana: water privatization raises fears that profits and development cannot marry

Lending institutions are putting pressure on developing countries to privatise their water sectors at a time when water is returning to public hands in the UK and US. While the government of Ghana feels that privatisation will improve water provision in Ghana, many civil-society groups envisage high water prices and profits placed before provision as a result. The international lending institutions pushing for the privatisation of public utilities is a dangerous development, according to a recent in-depth investigation into the proposed privatisation of the water sector in Ghana.

The independent report - spearheaded by Ghanaian research group Southern Links, but backed by Christian Aid money and bringing together delegates from the water sector and universities across Europe and the US - was presented in London's Royal Commonwealth Society in Sep 2002.Their findings raised some interesting points of concern, not just for the water sector in Ghana, but for water utilities everywhere and privatisation in general.

World Bank lending conditions forced a 95% rise in water tariffs in May 2001. A bucket of clean water in Ghana is now more expensive than in the UK, where GDP per capita is over US$ 14,000 (EUR 13,750), compared to just over US$ 200 (EUR 196) in Ghana. On the other hand, laws being passed in the UK essentially prevent private companies from cutting off water supplies to customers who fail to pay their bills, as this would be denying them a basic right: the access to clean water. No such safeguards can be expected in Ghana.

Contact: Sarah Simpson, sarah.simpson@wmrc.com

Source: World Markets Research Centre, 9 Oct 2002

Keywords

• Financing