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PrivatisationAlternatives / ReformsPublic-Public PartnershipsFinancing Public Water
Case StudiesAnalysesCampaigns




Jun 27 2004
Supplied or written by aleksej scira
Water Privatisation in Ghana: Activists Battle With Government and World Bank, Al-hassan Adam, National Coalition against Privatisation of Water - NCAP (November 2003)

BACKGROUND

Potable Water production and its distribution in Ghana started inn 1928 which pre-dates the country's independence 1957, the then colonial administration which was seated in the former national capital, Cape Coast had a pilot system managed by the Hydraulic Branch of the Public Works Department (PWD). This scheme was meant to provide potable water for the colonialists and their local administrators. After meeting the demands of the colonialists was water extended to the inhabitants in the form of public "stand pipes”. Public standpipes are out-door taps scattered in neighbourhood with an average spacing of 2km apart. After independence in 1957, the nationalist government led by Kwame Nkrumah drew a national scheme for the provision of potable water and sanitation to Ghanaians. In order to realize this goal, Nkrumah made Water Supply an autonomous body under the Ministry of Works and Housing in 1958.
By 1965, Ghana Water and Sewerage Corporation was created by an act of parliament (ACT 310) as a legal public entity charged with the responsibility of providing and managing water resources for domestic and industrial purposes. This arrangement created a massive centralized bureaucratic institution, which made it next to impossible for decision-making at regional levels not to talk of district and unit levels as well. Due to this issue it was thought best to decentralize some of GWCL'S operations. The decentralization took place and rolled through 1970 to 1985; the results where nothing to write home about. All these were happening with a military dominance over political power. A military junta (PNDC) dominated the political scene from 1981 to 1992, when it metamorphosis into a political party (National Democratic Party-NDC), won the election from 1992 to 2000. The reign of this military junta brought about unbridled corruption in the public sector. Economic Recovery Programme (ERP) and Structural Adjustment Programme (SAP) were the dominant economic paradigms of the country. The country was show as a star pupil by the IMF/WB and also as a module country for SAP. The zeal to implement SAP to the letter, GWSC was restructured purposely for fiscal policies, which meant the sacking of 1400 workers from 1990-91. Thames (UK) was heavily involved in this process through a smoke screen of institutional capacity building. This sacking was not enough, 600 more had to lose their jobs in 1993. At the end of the day the restructuring failed to deliver potable water to Ghanaians and the corporation was running into crisis.

The collapse of SAP gave way to another new set of development paradigm being introduced by the Neo-Classical economist with the focus of transferring public resources to the private purse. In 1993 the government of the National Democratic Congress (NDC), which was an old vessel of a military junta (PNDC) accepted the World Bank's recommendation of re-restructuring the water sector towards privatisation. This process saw the de-linking of Sanitation and the Rural sector from GWSC. The NDC government went into negotiation with Azurix (subsidiary of ENRON). There where a lot of clouds hanging over the deal with Azurix. It was later found out that a Minister was bribed an amount of $5million by Azurix in 1995. This bribery scandal collapsed the Private Sector Participation (PSP) deal since 1996 was an election year. As part of the privatisation scheme in 1998, government set up the "Public Utility Regulation Commission (PURC) as a regulator for utilities, followed by the Community Water and Sanitation Agency (CWSA) with the responsibility of providing potable water and sanitation to the rural folks under the auspices of the District Assemblies (Councils). This was hurriedly followed by incorporating Ghana Water Company Limited (GWCL) as a limited liability company. The opposition parties condemned all these developments. As one of the leading members of the biggest opposition party wrote in a national daily “In Defence of GWSC: 'Stop the butchering'. (Daily Graphic, Wednesday august 4, 1999, page 7, Kan Dapaah.MP, is now a Minister who is totally in support of PSP). The debate on PSP was limited to newspaper articles and the occasional rhetoric of the opposition parties. It has never become an issue up until 2001 when a national water stakeholders workshop was organized by Integrated Social Development Centre (ISODEC ). At the end of this workshop, the PSP plan which was previously shelved by the NDC. Now being re-invigorated by the new government of New Patriotic Party (NPP) led by Kufour would not bring water to all, especially the POOR! A declaration was signed and the signatories formed the National Coalition Against Privatisation of Water (NCAP).

The coalition membership cuts across civil institutions in the country; Organized labour, students, communities and NGOs are heavily involved. Ever since the inception of the campaign, the government has come down heavily on the coalition members, calling us terrorists and un-patriotic and all manner of names. Newspaper advertisements by the government to tarnish our reputation did not scare us. The smear campaign was mastermind by WB/DFID sponsored outfit call "Water Sector Restructuring Secretariat (WSRS).

WHAT WAS IN THE PSP FOR OFFER

Through the support and influence of the WB/IMF, the government of Ghana got some British and American consultants to draw out a business framework for GWCL for Private Sector Participation (PSP). GWCL with is 220 water works and 6500 boreholes was to be leased to private water companies. It was claimed that the company needed capital injection of $1.3billion for the next 10 years to provide water for the citizenry. But curious enough it is proposed that the two companies who will eventually win the bids will contribute $70million each, as their investment capital for the period of the lease. The investment is woefully inadequate. The dust of this offer did not settle when we heard that the companies were not willing to contribute $70million, but only $30million each. This development did not come as a surprise to the coalition members. We kept the heat on the government, WB and its allies. Very recently we held two separate meetings with the Government of Ghana and World Bank, at which they announced that they are now considering "Service Contract” not "Lease” options anymore. When the coalition brought pressure to bear on them, they disclosed that terrorist the attack on 9/11 and War conflicts in the West African sub-region has made investments unattractive. According to the WB what is on offer now in 3 years service contract rolled into 7 years lease contract, by which time there will be less political and financial risk in the sub-region. In essence, off-load all risks to the public and all profits to the private operator.

WHERE HAS PSP TAKEN US

Ever since PSP was put on the table, GWCL has been starved of investment. We now have very rampant water shortages, private water vendors are cashing in on this situation by drawing water from filling points with trucks and selling it at 600% the original price. The worst affected areas are the rural folks. There has been the insurgence of guinea worm infections, which is a water borne disease. Ghana is the second highest country of guinea cases even though it was almost eradicated 10 years ago. Rural district assemblies have no budget for water and sanitation since their total budget allocation from the central government is woefully inadequate. For this reason, the idea of Community Water and Sanitation Agency (CWSA) has failed. To worsen their plight, the World Bank refused disbursing its funds meant for Rural Water and Sanitation for the simple reason that the rural folks could not contribute 5% required from them by the Bank. They are denied access to good water and sanitation because they are poor!

How Many Miles Have We Come?

The coalitions relentless struggles brought the issue of PSP to the public domain, which was being negotiated only in boardrooms. It has become an unpopular policy in the country to such an extent that government officials avoid being interviewed on the subject. One of the major victories is the governments' inability to meet the proposed schedule for the PSP, the subsequent suspension of the policy, and the disbanding of the Water Sector Restructuring Secretariat(WSRS).

How Did The Coalition Got There?

The cardinal point of mobilizing is engaging with ordinary citizens where they work, study, live, or hang-out. Teach-ins, rallies, leafleting and flyer distribution came handy in these exercises. Also linking this single issue of water to other Full Cost Recovery (health, education, power etc) policies has been very successful in getting people to build bridges. International solidarities have also played a key roll in challenging the IFIs and their allies.

WHERE DO WE WANT TO GO?

We are calling for active citizenry participation in water and sanitation delivery. This is the sure way to bring about an equitable and efficient system, not huge state bureaucracy and private corporate greed. It has been demonstrated that community control of their water resources and providing good services is feasible by working with a guinea worm infested community called Savelugu in Northern Ghana. Savelugu has a population of 20,000 with 600 cases of guinea infections, the highest case in the country. World Vision International (WVI), Global 2000 Inc. of the Carter Center and UNICEF adopted this community to help in solving the situation. The community had no running potable water for about two decades, although there are still remnants of the pipes intact. UNICEF provided 60% of the finance while WVI was instrumental in the drilling of the mechanized borehole, the District Assembly and Community contributed 10% of the cost GWCL donated an overhead tank of 20,000-gallons (Glass re-enforced tank) and Guinea Worm Eradication Programme (GWEP) also contributed in kind and cash.

These organizations in collaboration with the community approached GWCL to sell water in bulk to the community who will distribute the water to its citizenry. The GWCL supplies the community with 95% while a mechanized borehole takes care of the remaining 5%. The module is closer to what we want to build as participatory democracy in water delivery. The Township has been zoned into six areas, and each has a water management committee, comprising equal numbers of men and women. The water management committee has an overseer who ensures discipline and a treasurer who collects money for water fetched. A liaison person on the committee reports faults and malfunctions of the water system to the district assembly. Water is available to the different zones of the township in turns. For any amount of water supplied to each area, the water board allows up to 5% losses at the fetching points. Thus, water committees account for up to 95% of water supplied to their respective sections. Sales are rendered daily to the accountant. During the first year (2000), the Water Board managed the system directly, but in 2001, the community decided to hire a technical person to manage the system on behalf of the water board, as a Water Supply Manager. The works engineer of the District Assembly is responsible for the technical supervision of the system. The Water Board pays the Water Works Manager, from revenue accrued from the sale of the water. To strengthen the capacity of the above officer there are plans to sponsor him for training in a suitable training institution. As at the time of writing guinea worm cases are virtually non-existing in Savelugu and over all district incidence has dropped to 95%. Time spent on looking water (which is point of infection) is save, crippling effects of guinea worm is gone!


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