World Economic Forum on Africa 2011

  • Water for a Growth-Thirsty Region

    Friday 6th May 2011 - 9:00am - 10:00am

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  • Water for a Growth-Thirsty Region

     
    Africa's expanding economies and growing populations are accelerating the competition for water to ensure food security, industrial growth, energy generation and human consumption. How can government and business collaborate to mitigate such trade-offs?

    The following dimensions will be addressed:

    • Energy production
    • Agricultural efficiency
    • Governance challenges

    Key Points

    • Growing world population and better diets call for increasing demand for water by farmers.
    • This is mirrored by growing demand from industry and households – a mirroring that calls for efficient allocation and efficient use of an increasingly scarce resource.
    • Water cannot continue to be treated as a free or cheap social good, and governments will need political courage to address this emotive issue.
    • Ecosystems need their own adequate supplies of water if they are to continue delivering clean, adequate water to the globe.
    • Sound planning for appropriate allocation of water must be formulated with the cooperation of all stakeholders and competing users.

    Synopsis

    In an increasingly populated and industrializing world trade-offs between water and other scarce resources are becoming increasingly apparent. At the same time, competition for water, which is often seen as a free or cheap social good, is becoming more intense and in need of careful management and allocation. Over the next 20 years the world’s population is projected to increase by half to about 10 billion people, many of whom are starting to demand “steak rather than soya”. Steak needs 10 times the amount of water than soya to produce a single nutritional calorie.

    Africa’s and South Africa’s historical reliance on agriculture and rural development is lessening, and the growing importance of urbanization, manufacturing and power generation is heightening competition for water. Reallocation to these “new” sectors calls for proper pricing and allocation of water. Historically, however, governments have focused on supply side issues – dam building, reticulation and storage – to the extent that this is reaching its limits in countries such as South Africa. The question is: How does government switch emphasis to the demand side of the equation, particularly to the issues of efficient and fair use of water, and take the electorate with it? Behavioural change will be central to ensuring that the water resource is fairly and efficiently allocated.

    Mexico is tackling the entire matter with a US$ 4.6 billion national and regional plan that extends to 2030. It has drawn in all stakeholders and is sufficiently robust to continue through several presidencies. Appropriate incentives are being put in place to overcome difficulties such as while agriculture only delivers between 6% and 10% of GDP it uses 80% of the nation’s water and wastes 50%. The aim is to instil an ethos of efficient use while, at the same time, taking difficult political decisions such as the removal of water subsidies.

    It is often overlooked that individuals and households that assume water to be a cheap social good use only 1.5% of the global supply directly at the faucet. But their expectations exert a strong influence on government policies and complicate moves towards pricing that will contribute to efficient allocation. On the other hand, “mother nature” will allocate water if the imperative of protecting and maintaining the ecosystems that deliver quality water is ignored.

    On the supply side it can prove difficult to predicate investment in water on conventional risk-return criteria. A solution might lie in different entrepreneurial directions such as self-sustaining social enterprises that can accept low or even negative returns on investment.

    Over the coming decades of increasing population and economic growth, how water is used will rapidly begin to predominate over how it is supplied.

    Takeaways

    Popular attitudes towards water were demonstrated with an anecdote: If a bottle of water is sent from Mexico to Europe, it is a scandal. If a bottle of beer is sent, it is welcomed as foreign trade. We place a value on beer, but not on water that is more precious.

    Peter Brabeck-Letmathe

    , Chairman of the Board, Nestlé, Switzerland; Member of the Foundation Board of the World Economic Forum; Co-Chair of the World Economic Forum on Africa; Global Agenda Council on Water Security

    Enrique Lendo Fuentes

    , Director, Foreign Affairs, Secretariat of the Environment and Natural Resources of Mexico, Mexico

    Edna Molewa

    , Minister of Water and Environmental Affairs of South Africa

    James Mwangi

    , Global Managing Partner, Dalberg, South Africa

    Laurent Some

    , Director, External Relations and Partnerships, WWF - Africa and Madagascar Programme, Kenya

    Moderated by

    James Cameron

    , Founder and Vice-Chairman, Climate Change Capital, United Kingdom; Global Agenda Council on Climate Change

    Disclosures

    This summary was prepared by

    Jim Jones

    . The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum.

    Copyright 2011 World Economic Forum

    This material may be copied, photocopied, duplicated and shared provided that it is clearly attributed to the World Economic Forum. This material may not be used for commercial purposes.

     

     

     

     

Speakers

  • Edna Molewa Edna Molewa
    Minister of Environmental Affairs of South Africa

    Studies, Wharton School of Business & Kennedy School of Gov.; Cert. in Negotiating Skills, IMMSA; BC...

  • Peter Brabeck-Letmathe Peter Brabeck-Letmathe
    Chairman of the Board, Nestlé, Switzerland; Vice-Chair Foundation Board, World Economic Forum

    Degree in Economics, University of World Trade, Vienna. 1997-2008, led the Nestlé Group, first as C...

  • James Mwangi James Mwangi
    Global Managing Partner, Dalberg, South Africa

    Degree in Economics, Harvard University. Formerly, Consultant serving clients in the financial servi...

  • Enrique Lendo Fuentes Enrique Lendo Fuentes
    Director, Foreign Affairs, Secretariat of the Environment and Natural Resources of Mexico, Mexico

  • Laurent Some Laurent Some
    Director, External Relations and Partnerships, WWF - Africa and Madagascar Programme, Kenya

    BSc in Biological Sciences; MSc in Forestry. 1993-96, Senior Researcher, Advisor and Lecturer, Natio...

Moderated by

  • James Cameron James Cameron
    Chairman, Climate Change Capital, United Kingdom

    Non-Executive Chairman, Climate Change Capital. Chairman, Overseas Development Institute (ODI). Memb...