2005 - 2006 - Pinsent Masons Water Yearbook 2012

Framework for Action Annual Investment
4
PART 1: 2005-2006 OVERVIEW
(US $ billion) Annual Investment
1. Water supply for basic needs 5.00
2. Sanitation and hygiene 7.00
3. Irrigation and water-productivity improvement 4.00
4. Water for industry, energy and transport 2.10
5. Flood and drought management 0.40
6. Policy and institutional reform and capacity-building 0.35
7. Knowledge and information 0.45
8. Awareness and education 0.45
9. Research-search and development 0.25
Total 20.00
From Africa Water Vision 2025 (2005), UN Economic Commission for Africa / African Union / African Development Bank
There are some fundamental obstacles that need to be faced before accelerated investment in
these areas can take place: where is the money coming from and how can it best be used? It is
clear that internal resources are currently inadequate. Not because Africa is too poor per se, but
because of the extreme distribution of wealth and the consequential widespread poverty.
People in Sub-Saharan Africa living below the poverty line
Income per person per day Million people Share of population
1990 2001 1990 2001
US$ 1.08 poverty line 227 313 45% 46%
US$ 2.15 poverty line 382 516 75% 77%
Source: Millennium Report, Interim Report of Task Force 7 on Water and Sanitation (2004), UNDP
At the same time, despite the good intentions at events such as the Commission for Africa, no
material commitments towards accelerating investment in water and sanitation services have to
date been made. The region is also more dependent on external support than any other in the
world due to the lack of income from remittances (billing for services) and private investment.
Aid and economic development
Investment by source Sub-Saharan Other developing
Africa
economies
Official aid flows (ODA) 50% 9%
Foreign Direct Investment (FDI) 22% 43%
Other private flows 14% 16%
Remittances 13% 33%
Total (US$ billion) 45 331
In Sub-Saharan Africa, ODA is currently worth 6.2% of GNI (Gross National Income) or US$ 33
per capita per annum. ODA in the rest of the world ranges from 0.4-1.3% of GNI. FDI is
concentrated in Nigeria, South Africa and Angola, while 55% of remittances were received by
Kenya, Nigeria and Sudan. The chief constraints to attracting investment have been identified
as:
• Inflexible labour registration
• Problems with enforcing contracts
• Problems with registering property
• High start-up costs
• Corruption
• Poor infrastructure
Pinsent Masons Water Yearbook 2005-2006