R17 Billion New Development Bank Loan Risks Being Wasted Without Urgent Overhaul in Water and Sanitation Management

2 September 2024

ActionSA cautiously welcomes the New Development Bank’s R17 billion loan for financing water and sanitation infrastructure projects. However, without a fundamental overhaul of our water infrastructure and resource management, the loan merely represents nothing more than pouring water into a leaking bucket which won’t treat deep-rooted issues of systemic inefficiencies, mismanagement, and poor maintenance that continue to undermine service delivery.

ActionSA is increasingly concerned that, while investments in infrastructure maintenance and upgrades are necessary, the current approach sidesteps critical issues that undermine the effectiveness of these investments and the delivery of services. Systemic mismanagement, along with a lack of technical capacity, inadequate project management, deficient municipal billing and collection systems, and ineffective governance structures, creates inefficiencies and hinders the delivery of essential water and sanitation services.

It is clear that South Africa’s ongoing water and sanitation infrastructure issues increasingly reflect governance and administrative failures rather than merely fiscal limitations, highlighting the urgent need for a comprehensive overhaul of our water resource management frameworks, especially at  municipal level.

A case in point is the imminent bankruptcy faced by the Vaal Central and Magalies Water Boards within the next 6 to 12 months, with both boards experiencing severe financial instability, which underscores the broader systemic issues that threaten the delivery of services to residents in their respective jurisdictions.

In light of this, ActionSA believes there is an urgent need to strengthen municipal systems to address and overcome the systemic issues that pose a continued risk to our water and sanitation infrastructure management. These issues also lead to unsustainable water losses that a water scarce country like ours can ill afford.

ActionSA will monitor the projects funded by the New Development Bank loan to ensure they are executed efficiently and effectively, thereby fostering long-term improvements in water resource management and ensuring that every South African has access to clean water and sanitation services.

Issued by Malebo Kobe, Member of Parliament, ActionSA, 3 September 2024