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Social services

Commentary

The private sector in Ghana’s water – a strategy to serve or steal?

22 November 2004

In 1995 the World Bank pushed the government of Ghana to develop specific options to increase private sector participation in the delivery of water services. The Ghana Water and Sewage Corporation has now been transformed into two separate structures: the profitable urban water sector which is about to be contracted to transnational corporations, and the unprofitable rural water supply which is being managed by the Bank-created Community Water and Sanitation Agency.

Western corporate interests led by French companies aim to take over the services sector in the name of private sector efficiency. Europe has several large transnational corporations, which are involved in privatising municipal water services around the world. Current global trade rules seek to phase out all government barriers to trade and competition in the services sector. Given the inequalities that exist in terms of the ability to access the world market, this can only lead to the global dominance of the sector by the most powerful western companies such as Saur, Suez, Vivendi (now Veolia), RWE and Thames Water. These are companies that have been short-listed to sell Ghana’s drinking water. Controlling the water and energy sectors of Africa is lucrative and less risky – there are fewer litigations here and labour is less turbulent than in other regions.

The IMF and the World Bank have been instrumental in manipulating the government of Ghana into accepting the privatisation of water services. Bank loans are dependent upon compliance with different types of policy conditionalities, including the privatisation of public utilities.

The World Bank is desperate to succeed in Ghana, having suffered serious failures in other countries, notably Bolivia and the Philippines. In July 2004 World Bank missions were sent to Ghana to lobby members of the national parliament to ensure that it approves the management service contract being pushed on the government of Ghana. The link man has been Honourable Mr. Kyei Mensah-Bonsu the majority chief whip and a former key player at the water restructuring secretariat – the Bank and UK Department for International Development-supported body that oversees water sector reforms in Ghana. Mr Mensah-Bonsu also heads the parliamentary committee on works and housing. The World Bank’s engagement with the committee is unprecedented and marks a significant shift in in-country engagement policy. The Bank has hitherto dealt with the executive arm of government only. Legal pundits are wondering if this does not amount to interference in the internal politics of a sovereign member state; a situation prohibited by the Bank’s charter.

The government is admittedly cash-strapped, but the solution lies in opening the debate to the people of Ghana and asking the question ‘how do we keep our water service public for the benefit of all our people’ rather than surrendering to external agents whose ultimate agenda is linked to the very companies which are strategising to take over the country’s public services.

The World Bank’s policy thrust appears to be primarily driven by fiscal concerns – that is, the desire to reduce central government expenditure and increase the revenue generation responsibilities at the local government level thus improving the country’s ability to pay back loans. This involves shifting a significant portion of the cost burden of public utilities to the impoverished sections of the urban population who under policies driven by demand and full-cost recovery will continue to pay more for water.

The government of Ghana should consult more broadly with local expertise and civil society with the view to devising more socially-friendly models for negotiation with creditors and donors. It should also re-prioritise the national budget in favour of the water sector. However, this will only be possible if the International Financial Institutions are restrained, conditionalities abolished, and the rights of citizens of member states to the basics of life become the basis for lending.

Rudolf N. Amenga-Etego
Foundation for Grassroots Initiatives in Africa (GrassrootsAfrica), Accra