## _sdn1511tn - 1. Annual Renewable Freshwater Resources per Capita

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### A. Key Water Issues in Sub-Saharan Africa (SSA)
- Resource endowments and variability
  - SSA countries have highly variable water resources and relatively low per capita supply on average.
  - Regions with scarce access and highly variable rainfall include the western Sahel, eastern horn, and southern tip (examples: Burkina Faso, Kenya, Niger, Zimbabwe).
  - Relatively abundant resources in the middle of the continent (examples: Angola, Cameroon, Democratic Republic of the Congo (DRC), Republic of Congo).
- Access and withdrawals
  - Despite low per capita supply, “water stress” is tempered by low annual withdrawals, reflecting low access rates and low depth of access to water.
  - SSA countries withdraw the lowest annual volume per capita of all regions.
  - Average rate of access to drinking water in SSA: 64.5 percent; Oceania: 55.2 percent.
- Main drivers of low access
  - Deficit of infrastructure (including energy) — insufficient, outdated, or poorly maintained water storage, distribution, and treatment facilities.
  - Annual infrastructure investment gap in Africa’s water sector estimated to be $22 billion (Foster and Briceño-Garmendia 2010).
  - Poor management: poor maintenance, waste, below-cost-recovery tariffs, and low collection rates.
- Paradoxes and successes
  - Countries with relative water abundance (e.g., DRC and Angola) have some of the lowest rates of access to drinking water in SSA (46 and 54 percent, respectively).
  - Successful access expansion examples: Burkina Faso, Lesotho, Mozambique, and Seychelles — often achieved full recovery of costs for drinking water partly through progressive tariff grids.
- Rural–urban and sanitation gaps
  - Average gap between urban and rural rates of access to drinking water in SSA: 28 percentage point gap.
  - Average access to improved sanitation in SSA as of 2012: 35 percent.
  - Urban–rural gap in sanitation access: 20 percentage point gap.
- Economic and social impacts
  - Water variability and scarcity constrain growth, particularly through agriculture.
  - Example: Mozambique study (1981–2004) suggested GDP growth reduced by about 1.1 percentage points annually due to shocks typically occurring every five years.
  - Water shortages affect women’s participation in income-generating activities and education due to time spent fetching water.
- Future pressures
  - Water stress expected to become more acute due to high population growth, urbanization, structural transformation, climate change, and contamination.
  - Average population growth rate cited: around 2.5 percent — per capita supplies will quickly diminish.
  - Quality deterioration from contaminants (fertilizers to mining activities) and infrastructure strain.

### B. Key Water Issues in Middle-Eastern and Central Asian Countries
- Overall situation
  - Many countries face high water stress given limited renewable water resources.
  - MENA region per capita water availability projected to fall by half by 2050 (World Bank, 2007b).
  - Some Caucasus and Central Asia (CCA) countries and Afghanistan are highly water intensive while facing significant water stress.
  - Shared water resources across international borders add management complexity.
- Persistent challenges
  - High proportion of surface freshwater stored in reservoirs in MENA.
  - Access to improved water and sanitation is relatively widespread but uneven; rural populations in oil-importing countries disadvantaged.
  - Overextraction of groundwater driven by individual well drilling and weak regulation.
- Three prominent policy/management issues
  - Subsidies or lack of metering
    - Subsidies and failure to meter/bill encourage overconsumption and impose fiscal costs often outside budgets.
    - Example cost estimates: around 2 percent of GDP in the Gulf Cooperation Council (GCC) countries; 1 percent of GDP in Algeria and Jordan.
    - Prevalent issues in Algeria, Armenia, Djibouti, Egypt, the GCC countries, Iraq, Jordan, Kyrgyz Republic, Lebanon, Mauritania, Pakistan, Sudan, Tunisia, and Turkmenistan.
    - Yemen: subsidized diesel encourages overconsumption by lowering cost of pumping groundwater.
  - Infrastructure issues and water management
    - Aging or inadequate infrastructure leads to low water quality and large network losses (examples: Afghanistan, Armenia, Azerbaijan, Iraq, Kyrgyz Republic, Pakistan, Sudan, Turkmenistan, West Bank/Gaza, Yemen).
    - In some countries, water supply is rationed (e.g., Jordan, Lebanon), prompting private sector alternatives (water trucks).
    - Infrastructure needs can be sizable (Djibouti, Kyrgyz Republic, Lebanon).
  - Cross-border coordination
    - Shared sources and dams for flood control, electricity generation, and irrigation create cross-border tensions (examples: Egypt/Sudan/Ethiopia; Jordan/Israel/West Bank; Iraq/Turkey/Syria; Afghanistan/Iran/Uzbekistan/Turkmenistan/Pakistan; India/Pakistan; Uzbekistan/Tajikistan/Kyrgyz Republic).
- Macroeconomic implications
  - Rainfall reliance and variability affect agricultural output and growth potential (example: Morocco).
  - Underpricing/lack of collection cause resource misallocation (land use, housing in dry areas).
  - Sizable water and energy subsidies exacerbate fiscal imbalances and crowd out efficient resource use.
  - Large infrastructure investment needs can have significant macroeconomic impacts and may be unaffordable domestically or from commercial borrowing (example: Djibouti).
- Relative successes
  - Algeria achieved continuous water supply in Algiers after a decade of massive investment.
  - Tunisia implemented active water management since the 1970s and achieved the highest access rates to water supply and sanitation in the MENA region.
  - Both countries still face costly water subsidies.

### C. Case Study — Burkina Faso
- Resource characteristics and variability
  - Burkina Faso has one of the lowest per capita supplies of water in SSA and in the world.
  - Land-locked West African country with tropical climate and Sahelian dominance.
  - Well below the United Nations water scarcity threshold.
  - Relies exclusively on surface water; up to 49 percent of its renewable annual freshwater resources are consumed by evaporation and, to a lesser extent, water sharing agreements.
  - High interannual rainfall variability: rainfall can vary as much as 50 percent year-to-year.
- Use and access
  - Annual water withdrawals per capita are half the SSA average and about one-eighth the world average.
  - Agriculture accounts for the lion’s share of usage.
  - Innovations include cisterns and highly water-efficient drip irrigation in sugarcane fields; genetically modified cotton introduced that required one-third the fertilizer applications and doubled yields.
- Access trends and MDG outcomes
  - Drinking water access doubled over last two decades; nearly universal access in urban areas; rural access catching up.
  - MDG target for drinking water met; sanitation target will not be met.
  - Access to improved sanitation constrained by acute infrastructure deficit.
- Projections, risks, and fiscal impacts
  - Per capita water use could outstrip supply in roughly 10 years as a function of population growth alone.
  - Additional pressures: water pollution (fertilizers, cyanides from informal mining), encroaching desertification, and land degradation.
  - Agriculture employs 70 percent of the labor force and provides 25 percent of growth; highly dependent on annual rainfall.
  - World Bank’s Water and Sanitation Program estimated cost of insufficient access to improved sanitation in Burkina Faso could be as much as 2 percent of 2010 GDP.
  - Fiscal costs related to contingency food stocks, subsidized prices, and distribution mechanisms during droughts and floods.
  - Example: 2011–12 drought created fiscal costs of around 2–5 percent of GDP.
- Management outcomes
  - Investments in agricultural productivity and water storage and irrigation coincided with improved macro performance:
    - Five-year average real growth doubled between 1990 and 2012.
    - Standard deviation of five-year average real growth declined from 3.8 to 2.5 percentage points over the same period.

### D. Burkina Faso — ONEA reforms and investment strategy
- ONEA reforms and outcomes
  - ONEA charged with water management in urban areas; three-year performance-based service contracts with experienced private management introduced in the early 2000s.
  - Essential elements of the public-private partnership:
    - arm’s length management contracts;
    - performance benchmarking with independent monitoring;
    - new infrastructure investments based on strict financial sustainability;
    - performance-based compensation for the private manager;
    - cost recovery tariffs.
  - Tariff design: progressive tariff grid based on volume of use, with higher tiers subsidizing the lowest tier and part of sanitation activities.
  - Operational and financial outcomes:
    - recovery bill rates of 97 percent;
    - low debt ratios;
    - annual profits.
- Investment strategy and Bagré “growth pole”
  - Aggressive investment strategy since the mid-2000s including reservoirs, irrigation, crop rotation, genetically modified cotton, and diverse crops.
  - Bagré “growth pole”:
    - Valley flooded thirty years ago to create a large man-made reservoir after relocating residents;
    - Past 10 years government invested in industries and supportive services to attract private investors and create jobs around the water source;
    - Reservoir now supports fishing, irrigation for diverse crops, livestock and dairy, eco-tourism, and a hydro-electric power plant.
- Key findings and remaining challenges
  - Findings:
    - Restricted access/high costs for water can bring about home-grown solutions to improve efficiency and reduce per capita use.
    - Public water utilities can achieve cost recovery for drinking water access; ONEA’s focus on independent management, cost recovery, financially sustainable investment, quality of service, and social objectives serve as a model.
    - Resilience to variability of water supply can be improved through aggressive government investment strategies.
    - Decline in volatility of growth suggests benefits from the government’s aggressive investment strategy.
  - Remaining challenges:
    - large infrastructure gap;
    - low access to sanitation;
    - still high vulnerability to water shocks;
    - future pressures from high population growth, contamination, urbanization, climate change, and structural transformation.

### E. Democratic Republic of the Congo (DRC)
- Endowments and current use
  - Provides 19,967 cubic meters of freshwater per person per year for an estimated population of 77 million.
  - SSA average is 14,048.97 cubic meters per person per year.
  - Rainfall averages 1,545 millimeters (mm) per year, continental average 680mm per year.
  - Only a fraction (6,800 hectares in 2000) of the potential 4 to 7 million hectares of agricultural land are irrigated.
  - Currently, 356 million cubic meters of water are withdrawn every year, less than 1 percent of the available renewable water resources.
  - Withdrawals equate to around 7 cubic meters per person per year against an SSA average of 152 cubic meters.
  - Only 46 percent of the population has access to improved drinking water against an SSA average of 73 percent.
- Public health, access gaps, and utility performance
  - Mortality of children under the age of five in DRC is 11.9 percent versus SSA 9.2 percent.
  - Urban/rural access gap: 79 percent of urban population has access to improved water versus 29 percent in rural areas.
  - Access to improved sanitation: urban 29 percent, rural 33 percent.
  - REGIDESO performance issues:
    - Urban water supply coverage fell from 88 percent in 1990 to under 79 percent in 2012.
    - Most systems serving secondary towns are out of service due to lack of electricity and absence of new investment and maintenance.
    - Operating costs are high: staff expenses amount to 35 percent of REGIDESO’s turnover, against 20 percent in Burkina Faso.
    - Lowest bill collection rate in SSA and an inadequate tariff structure; current water tariff structure results in a billing price that is, on average, 80 percent of production cost.
- Institutional bottlenecks and financing needs
  - Sector governed by a multitude of conflicting laws and regulations across multiple ministries and agencies; coordinating body exists but clear distribution of responsibilities is missing.
  - Proposed reform law yet to be passed.
  - Only 50 percent of donor resources devoted to water projects can be absorbed due to low implementation capacity.
  - Government estimates required investment of US$171 million per year to provide safe water access to 50 percent of the population.
  - In 2007–08, public expenditure on water and sanitation was around US$65 million, or less than US$1 per person.
- Main takeaways
  - Strengthen the institutional environment for adequate management and expansion of water infrastructure.
  - Current cross-subsidized system among user categories is not working properly given the very low collection rate.
  - Investment in water and sanitation infrastructure could enhance inclusiveness of growth; allocate funds more equitably beyond Kinshasa to reduce urban/rural gaps.
  - International coordination is important for medium-term sustainability because DRC’s surface waters draw from a basin covering 10 countries.

### F. Pakistan — scarcity, projections, and reform priorities
- Scarcity and hydrology
  - Per capita water availability trends: dropped from 5,600 cubic meters at independence to the current level of 1,017 cubic meters.
  - 85 percent of annual river flows occur during the June-September period.
  - Rainfall varies from 1,500 mm per year in northern Punjab to 150 mm per year in upper Sindh province.
  - Total dam storage represents only 30 days of average demand, compared to 1,000 days for Egypt and 220 days for India.
- Demand and supply projections
  - Demand projected to reach 274 million acre-feet (MAF) by 2025.
  - Supply expected to remain stagnant at 191 MAF.
  - Resulting demand-supply gap of approximately 83 MAF.
- Sectoral facts and fiscal implications
  - Irrigation water charges (abiana) only recover 24 percent of the annual operating and maintenance costs; collection is only 60 percent of total receivables.
  - Groundwater quality: 36 percent of groundwater is highly saline.
  - Urban water tariffs low and unrevised; tariff collection varies 20–80 percent across cities.
  - More than 35 percent of the population lacks access to safe drinking water.
  - Agriculture consumes about 95 percent of annual available surface water and is predominantly irrigated (90 percent).
  - Approximately 60 percent of farm-gate-delivered water in Punjab comes from tube wells.
  - Agriculture contributes less than 0.1 percent of total tax revenues while accounting for 21 percent of GDP and employing 43 percent of the population.
  - Pakistan has hydro potential of 50,000 megawatts of electricity generation; only 13 percent has been developed so far; developed hydropower cost cited at 2 cents/kilowatt hour.
  - Existing mega dams Mangla and Tarbela (commissioned 1967 and 1976 respectively) losing storage capacity because of rapid silting.
- Recommended reforms and IMF engagement
  - Reform priorities:
    - reform water tariffs and cost recovery in agricultural and urban sectors;
    - increase investment in water infrastructure, including storage and hydro projects;
    - bring agriculture within the tax net to address equity and efficiency concerns;
    - phase out electricity subsidies and address the nexus between water and electricity;
    - encourage provincial reforms of agriculture taxation in the context of the National Finance Commission’s (NFC’s) award.
  - Role for IMF engagement:
    - focus on agriculture taxation in the context of the NFC award;
    - support phasing out electricity subsidies;
    - assist in policy design for water pricing as part of broader energy sector reform.
  - Policy thrust:
    - shift emphasis toward demand-side measures to promote conservation and control excessive groundwater exploitation;
    - greater engagement of local stakeholders and capacity building of water management institutions;
    - reliance on private investment and capital as integral parts of solutions for urban and hydro sectors.

### G. Singapore — “Four Taps” strategy and institutional lessons
- Overview and objectives
  - Singapore is located on an island (and some 60 small islets) with a total area of some 714 square kilometers.
  - Population: almost 5½ million; the country is third in the world in terms of population density.
  - The “Four Taps” strategy, introduced in the late 1990s, aims at achieving self-sufficiency by 2062 and combines diversification of supply, demand management, R&D, and public support.
- The Four Taps (supply sources)
  - Imports: Capacity up to 1,100 thousand cubic meters a day; pipeline from Johor; under current agreements expiring in 2061 entitled to receive up to 60 percent of current needs.
  - Local catchment water: Capacity 900–1,400 thousand cubic meters a day from 17 reservoirs.
  - Reclaimed water (NEWater): Capacity up to 520 thousand cubic meters a day; four plants meet up to 30 percent of the nation’s water needs; capacity to be expanded to 55 percent by 2060.
  - Desalinated seawater: Capacity up to 230 thousand cubic meters a day; two plants launched in 2005 and 2013; current contribution allows meeting up to 25 percent of the current water needs; planned to supply a quarter of the country’s water needs in the 2060s.
- Pricing, institutions, and financing
  - Single base tariff applied to both domestic and non-domestic users; households face an additional surcharge beyond a certain consumption level.
  - No subsidized “basic” consumption; targeted help provided for low-income families.
  - Additional charges: flat water-borne fee (doubles for non-domestic users), flat sanitary appliance fee, progressive water conservation tax.
  - Public Utilities Board (PUB): single agency responsible for the water cycle, autonomous, invests in PUB and government-owned assets, and has issued bonds since 2005 to finance some investments.
- R&D, sector ecosystem, and social engagement
  - Decades of R&D enabled opening the third and fourth taps.
  - PUB cooperates with researchers; National Research Foundation promotes water-sector R&D.
  - Institute of Water Policy established at the National University in 2008.
  - Home to over 70 local and international water companies and more than 20 research and development centers.
  - PUB promotes engagement across “3P” (population and public and private sectors) through cleanup, beautification, and conservation programs.
- Lessons
  - High-level political support for long-range policy objectives and strong institutions, including an autonomous technocratic institution such as the PUB, are key factors enabling the comprehensive strategy.
  - Rapid improvement in living standards and industrialization, with a reduced role of agriculture, may have helped secure broad public support for water management policies.

### H. Yemen — scarcity, impacts, and reform priorities
- Resource trends and depletion
  - Yemen described as one of the world’s most water-deficient countries; groundwater and rainfall are the sole sources of freshwater.
  - Water availability per capita: around 2 percent of the world average.
  - Per-capita availability trended from 113 cubic meters in 2002 to 86 m3 in 2013.
  - Access to “improved water sources” declined from 60 percent to 55 percent of the population in aggregate (2002–2013).
  - Rural population access to safe water now standing at 46 percent.
  - Annual freshwater use increased from 3.4 billion m3 in 2002 to 3.9 billion m3 in 2010; annual renewable supply remained relatively constant at 2.5 billion m3 during the same period.
  - Groundwater is being depleted; non-renewable water resources expected to be exhausted within one to two decades in the most densely populated highlands.
  - Sana’a: groundwater table dropping by more than six meters a year.
- Distributional and socioeconomic effects
  - Majority of urban consumers have access to a public water network; around 40 percent rely on trucked water.
  - Cost of trucked water: up to 10 times that of network water.
  - Agricultural sector consumes around 91 percent of water; irrigation of qat consumes around 40 percent of water used in agriculture.
  - Expansion of water-intensive crops supported by subsidies (diesel fuel price held extremely low until mid-2014).
- Policy changes, institutional challenges, and risks
  - Authorities reduced fuel subsidies and raised the price of diesel by 50 percent since July 2014.
  - To improve poverty orientation, Social Welfare Fund monthly transfers to households were increased by 50 percent.
  - Political instability over the past four years hampered investments, raised costs, damaged installations, and reduced billing and collection rates.
  - Desalination proposed as a long-term answer but is energy-intensive, requires large long-term investment, and seems infeasible without donor support.
  - Contamination and reduced household availability have contributed to disease spread in rural areas.
  - Water and fuel shortages and higher production costs risk farmer unemployment and broader economic deterioration.
  - If unaddressed, water difficulties could delay development, cause internal migration and tribal conflict, and increase urban water costs.
- Policy recommendations and reform priorities
  - Implement a broad reform agenda to rationalize consumption and improve efficiency, combined with well-coordinated donor support.
  - Implement price-based reforms and change legal and social understanding of water rights to reflect true cost of water resources.
  - Prioritize better management of water resources, targeted public and private investments, donor financing, closing the urban-rural water gap, and boosting water supply.
  - Focus on agricultural sector reforms to enhance efficiency of production and irrigation.
  - Strengthen regulation and enforcement to stop widespread and unregulated extraction of underground water.
  - Create an enabling business and regulatory environment to encourage private sector participation in financing water projects and infrastructure.
  - Full implementation of structural reforms embedded in the Extended Credit Facility program (ECF), including:
    - Completing the phase-out of highly distortive energy subsidies.
    - Directing public resources to growth-enhancing investment and poverty-reducing transfers.
    - Improving public sector management.
    - Supporting private sector activity through enhanced financial intermediation and improved access to finance for small and medium-size enterprises.

*Source: Technical Companion Note, June, 2015 — International Monetary Fund.*

### 1. Annual Renewable Freshwater Resources per Capita ____________________________________________ 2

### _sdn1511tn - 1. Annual Renewable Freshwater Resources per Capita

### A. Key Water Issues in Sub-Saharan Africa (SSA)
- SSA countries have highly variable water resources and relatively low per capita supply on average.
- Regions with scarce access and highly variable rainfall include the western Sahel, eastern horn, and southern tip (examples: Burkina Faso, Kenya, Niger, Zimbabwe).
- Relatively abundant resources in the middle of the continent (examples: Angola, Cameroon, Democratic Republic of the Congo (DRC), Republic of Congo).
- On average, SSA countries have relatively limited water resources compared to other regions.
- Despite low per capita supply, “water stress” is tempered by low annual withdrawals, reflecting low access rates and low depth of access to water.
- SSA countries withdraw the lowest annual volume per capita of all regions.
- Average rate of access to drinking water in SSA: 64.5 percent; Oceania: 55.2 percent.
- Main drivers of low access:
  - Deficit of infrastructure (including energy) — insufficient, outdated, or poorly maintained water storage, distribution, and treatment facilities.
  - Annual infrastructure investment gap in Africa’s water sector estimated to be $22 billion (Foster and Briceño-Garmendia 2010).
  - Poor management: poor maintenance, waste, below-cost-recovery tariffs, and low collection rates.
- Notable paradox: countries with relative water abundance (e.g., DRC and Angola) have some of the lowest rates of access to drinking water in SSA (46 and 54 percent, respectively).
- Successful access expansion examples: Burkina Faso, Lesotho, Mozambique, and Seychelles — often achieved full recovery of costs for drinking water partly through progressive tariff grids.
- Rural–urban disparities:
  - Average gap between urban and rural rates of access to drinking water in SSA: 28 percentage point gap.
  - Rural water systems often decentralized to local communities; urban systems typically operated by publicly owned utilities.
  - Investments for rural access commonly include wells, small reservoirs, and rainwater collection schemes.
- Sanitation:
  - As of 2012, average access to improved sanitation in SSA: 35 percent.
  - Urban–rural gap in sanitation access: 20 percentage point gap.
- Economic impacts:
  - Water variability and scarcity constrain growth, particularly through agriculture.
  - GDP growth is highly correlated with rainfall; example: Mozambique study (1981–2004) suggested GDP growth reduced by about 1.1 percentage points annually due to shocks typically occurring every five years.
  - Water shortages affect women’s participation in income-generating activities and education due to time spent fetching water.
- Future pressures:
  - Water stress to become more acute due to high population growth, urbanization, structural transformation, climate change, and contamination.
  - Average population growth rate cited: around 2.5 percent — per capita supplies will quickly diminish.
  - Quality deterioration from contaminants (fertilizers to mining activities) and infrastructure strain.

### B. Key Water Issues in Middle-Eastern and Central Asian Countries
- Many countries face high water stress given limited renewable water resources.
- MENA region per capita water availability projected to fall by half by 2050 (World Bank, 2007b).
- Some Caucasus and Central Asia (CCA) countries and Afghanistan are highly water intensive while facing significant water stress.
- Shared water resources across international borders add management complexity.
- Persistent challenges despite past investments and policies:
  - High proportion of surface freshwater stored in reservoirs in MENA.
  - Overall access to improved water and sanitation is relatively widespread but uneven; rural populations in oil-importing countries disadvantaged.
  - Overextraction of groundwater driven by individual well drilling and weak regulation.
- Three prominent issues:
  - Subsidies or lack of metering:
    - Subsidies and failure to meter/bill encourage overconsumption and impose fiscal costs often outside budgets.
    - Example cost estimates: around 2 percent of GDP in the Gulf Cooperation Council (GCC) countries; 1 percent of GDP in Algeria and Jordan.
    - Prevalent issues in Algeria, Armenia, Djibouti, Egypt, the GCC countries, Iraq, Jordan, Kyrgyz Republic, Lebanon, Mauritania, Pakistan, Sudan, Tunisia, and Turkmenistan.
    - Yemen: subsidized diesel encourages overconsumption by lowering cost of pumping groundwater.
  - Infrastructure issues and water management:
    - Aging or inadequate infrastructure leads to low water quality and large network losses (examples: Afghanistan, Armenia, Azerbaijan, Iraq, Kyrgyz Republic, Pakistan, Sudan, Turkmenistan, West Bank/Gaza, Yemen).
    - In some countries, water supply is rationed (e.g., Jordan, Lebanon), prompting private sector alternatives (water trucks).
    - Infrastructure needs can be sizable (Djibouti, Kyrgyz Republic, Lebanon).
  - Potential for cross-border coordination issues:
    - Shared sources and dams for flood control, electricity generation, and irrigation create cross-border tensions (examples: Egypt/Sudan/Ethiopia; Jordan/Israel/West Bank; Iraq/Turkey/Syria; Afghanistan/Iran/Uzbekistan/Turkmenistan/Pakistan; India/Pakistan; Uzbekistan/Tajikistan/Kyrgyz Republic).
- Macroeconomic implications:
  - Rainfall reliance and variability affect agricultural output and growth potential (example: Morocco).
  - Underpricing/lack of collection cause resource misallocation (land use, housing in dry areas).
  - Sizable water and energy subsidies exacerbate fiscal imbalances and crowd out efficient resource use.
  - Large infrastructure investment needs can have significant macroeconomic impacts and may be unaffordable domestically or from commercial borrowing (example: Djibouti).
- Relative successes:
  - Algeria achieved continuous water supply in Algiers after a decade of massive investment.
  - Tunisia implemented active water management since the 1970s and achieved the highest access rates to water supply and sanitation in the MENA region.
  - Both countries still face costly water subsidies.

### C. Case Study — Burkina Faso
- Context and resource characteristics:
  - Burkina Faso has one of the lowest per capita supplies of water in SSA and in the world.
  - Land-locked West African country with tropical climate and Sahelian dominance.
  - Well below the United Nations water scarcity threshold.
  - Relies exclusively on surface water; up to 49 percent of its renewable annual freshwater resources are consumed by evaporation and, to a lesser extent, water sharing agreements.
  - High interannual rainfall variability: rainfall can vary as much as 50 percent year-to-year, producing ongoing droughts that affect food security.
  - Seasonal rainfall fills reservoirs and rivers that systematically run dry in the dry season; timing between rains is critical for crop success.
- Use and access:
  - Low level of water use has kept supply constraints from being binding so far.
  - Annual water withdrawals per capita are half the SSA average and about one-eighth the world average.
  - Low use compared to SSA linked to depth of access and low access to improved sanitation.
  - Agriculture accounts for the lion’s share of usage.
  - Innovations include cisterns and highly water-efficient drip irrigation in sugarcane fields; genetically modified cotton introduced that required one-third the fertilizer applications and doubled yields.
- Access trends:
  - Drinking water access doubled over last two decades; nearly universal access in urban areas; rural access catching up to earlier urban levels.
  - Millennium Development Goals (MDG) target for drinking water met; sanitation target will not be met.
  - Access to improved sanitation constrained by acute infrastructure deficit.
- Projections and risks:
  - Going forward, water demand likely to outpace low supply due to population growth, urbanization, and climate change.
  - Per capita water use could outstrip supply in roughly 10 years as a function of population growth alone.
  - Additional pressures: water pollution (fertilizers, cyanides from informal mining), encroaching desertification, and land degradation.
- Economic and fiscal impacts:
  - Water challenges constrain growth and social outcomes; large fiscal costs.
  - Agriculture employs 70 percent of the labor force and provides 25 percent of growth; highly dependent on annual rainfall.
  - Health consequences from low water and sanitation access and time costs of water fetching (especially for women) negatively affect outcomes.
  - World Bank’s Water and Sanitation Program estimated cost of insufficient access to improved sanitation in Burkina Faso could be as much as 2 percent of 2010 GDP.
  - Addressing sanitation deficit requires substantial infrastructure investment.
  - Fiscal costs related to contingency food stocks, subsidized prices, and distribution mechanisms during droughts and floods.
  - Example: 2011–12 drought created fiscal costs of around 2–5 percent of GDP.
- Management and outcomes:
  - Burkina Faso has developed a widely praised water management approach focused on:
    - Expanding water access in urban areas.
    - Investments in agricultural productivity and water storage and irrigation.
  - These investments coincided with improved macro performance:
    - Five-year average real growth doubled between 1990 and 2012.
    - Standard deviation of five-year average real growth declined from 3.8 to 2.5 percentage points over the same period.

*Source: Technical Companion Note, June, 2015 — International Monetary Fund.*

### 18.      Burkina Faso’s public water utility (ONEA) has been responsible for a remarkable

### 18. Burkina Faso’s public water utility (ONEA); D. Democratic Republic of the Congo; E. Pakistan

### Burkina Faso — ONEA reforms and outcomes
- ONEA charged with water management in urban areas; three-year performance-based service contracts with experienced private management introduced in the early 2000s.
- Essential elements of the public-private partnership:
  - arm’s length management contracts;
  - performance benchmarking with independent monitoring;
  - new infrastructure investments based on strict financial sustainability;
  - performance-based compensation for the private manager;
  - cost recovery tariffs.
- Tariff design:
  - progressive tariff grid based on volume of use, with higher tiers subsidizing the lowest tier and part of sanitation activities.
- Operational and financial outcomes:
  - recovery bill rates of 97 percent;
  - low debt ratios;
  - annual profits.

### Burkina Faso — Investment strategy and Bagré “growth pole”
- Aggressive investment strategy since the mid-2000s to improve resilience to water scarcity and variability, including:
  - reservoirs, irrigation, crop rotation, genetically modified cotton, and diverse crops.
- Agricultural outcomes:
  - agricultural productivity has increased notably and cash crops are no longer lost to droughts.
- Bagré “growth pole” case:
  - thirty years ago the valley was flooded to create a large man-made reservoir after relocating residents;
  - in the past 10 years government invested in industries and supportive services to attract private investors and create jobs around the water source;
  - the reservoir now supports fishing, irrigation for diverse crops, livestock and dairy, eco-tourism, and a hydro-electric power plant.

### Burkina Faso — Key findings and remaining challenges
- Findings:
  - Restricted access/high costs for water can bring about home-grown solutions to improve efficiency and reduce per capita use.
  - Public water utilities can achieve cost recovery for drinking water access; ONEA’s focus on independent management, cost recovery, financially sustainable investment, quality of service, and social objectives serve as a model.
  - Resilience to variability of water supply can be improved through aggressive government investment strategies (diversified crops, land rotation, new technologies including GMO cotton seeds).
  - The decline in the volatility of growth in Burkina Faso suggests benefits from the government’s aggressive investment strategy have materialized fairly quickly.
- Remaining challenges:
  - large infrastructure gap;
  - low access to sanitation;
  - still high vulnerability to water shocks;
  - future pressures from high population growth, contamination, urbanization, climate change, and structural transformation.

### Democratic Republic of the Congo — endowments and usage
- Water endowments and climate:
  - provides 19,967 cubic meters of freshwater per person per year for an estimated population of 77 million;
  - SSA average is 14,048.97 cubic meters per person per year;
  - rainfall averages 1,545 millimeters (mm) per year, continental average 680mm per year.
- Current use and infrastructure:
  - only a fraction (6,800 hectares in 2000) of the potential 4 to 7 million hectares of agricultural land are irrigated;
  - currently, 356 million cubic meters of water are withdrawn every year, less than 1 percent of the available renewable water resources;
  - that is around 7 cubic meters per person per year against an SSA average of 152 cubic meters.
  - only 46 percent of the population has access to improved drinking water against an SSA average of 73 percent.

### Democratic Republic of the Congo — public health, urban/rural gap, and utility performance
- Public health impacts:
  - mortality of children under the age of five in DRC is 11.9 percent versus SSA 9.2 percent;
  - high prevalence of diarrhea and recurring outbreaks of cholera and other diseases linked to unsafe water; malnutrition associated with lack of safe water persists.
- Urban/rural access gap:
  - 79 percent of the urban population has access to improved water versus 29 percent in rural areas.
  - access to improved sanitation: urban 29 percent, rural 33 percent.
- REGIDESO performance issues:
  - urban water supply coverage fell from 88 percent in 1990 to under 79 percent in 2012;
  - most systems serving secondary towns are out of service due to lack of electricity and absence of new investment and maintenance;
  - operating costs are high: staff expenses amount to 35 percent of REGIDESO’s turnover, against 20 percent in Burkina Faso;
  - staff composition skewed toward executives and clerical workers rather than field agents;
  - lowest bill collection rate in SSA and an inadequate tariff structure; current water tariff structure results in a billing price that is, on average, 80 percent of production cost.

### Democratic Republic of the Congo — institutional bottlenecks and financing needs
- Institutional and implementation constraints:
  - sector governed by a multitude of conflicting laws and regulations across multiple ministries and agencies; coordinating body exists but clear distribution of responsibilities is missing;
  - proposed reform law yet to be passed.
- Absorption and financing:
  - only 50 percent of donor resources devoted to water projects can be absorbed due to low implementation capacity.
  - Government estimates required investment of US$171 million per year to provide safe water access to 50 percent of the population.
  - In 2007–08, public expenditure on water and sanitation was around US$65 million, or less than US$1 per person.

### Democratic Republic of the Congo — main takeaways
- Strengthen the institutional environment for adequate management and expansion of water infrastructure.
- Current cross-subsidized system among user categories is not working properly given the very low collection rate.
- Investment in water and sanitation infrastructure could enhance inclusiveness of growth; allocate funds more equitably beyond Kinshasa to reduce urban/rural gaps.
- International coordination is important for medium-term sustainability because DRC’s surface waters draw from a basin covering 10 countries.

### Pakistan — scarcity, projections, and hydrology
- Per capita water availability trends:
  - dropped from 5,600 cubic meters at independence to the current level of 1,017 cubic meters.
- Demand and supply projections:
  - demand projected to reach 274 million acre-feet (MAF) by 2025;
  - supply expected to remain stagnant at 191 MAF;
  - resulting demand-supply gap of approximately 83 MAF.
- Hydrological characteristics:
  - 85 percent of annual river flows occur during the June-September period;
  - rainfall varies from 1,500 mm per year in northern Punjab to 150 mm per year in upper Sindh province.
- Storage capacity:
  - total dam storage represents only 30 days of average demand, compared to 1,000 days for Egypt and 220 days for India.

### Pakistan — policy challenges and reform priorities
- Water tariff and cost recovery issues:
  - irrigation water charges (abiana) only recover 24 percent of the annual operating and maintenance costs;
  - collection is only 60 percent of total receivables;
  - pricing for major crops does not reflect differential water consumption (example: rice consumes 60 percent more water than cotton).
  - groundwater quality: 36 percent of groundwater is highly saline.
  - urban water tariffs low and unrevised; tariff collection varies 20–80 percent across cities.
  - more than 35 percent of the population lacks access to safe drinking water.
- Infrastructure and hydro potential:
  - Pakistan has hydro potential of 50,000 megawatts of electricity generation; only 13 percent has been developed so far;
  - developed hydropower cost cited at 2 cents/kilowatt hour;
  - existing mega dams Mangla and Tarbela (commissioned 1967 and 1976 respectively) losing storage capacity because of rapid silting.
- Agriculture taxation and subsidies:
  - agriculture consumes about 95 percent of annual available surface water and is predominantly irrigated (90 percent);
  - approximately 60 percent of farm-gate-delivered water in Punjab comes from tube wells;
  - agriculture contributes less than 0.1 percent of total tax revenues while accounting for 21 percent of GDP and employing 43 percent of the population.
  - subsidized water and electricity tariffs have induced expansion of electric pumps and groundwater exploitation.

### Pakistan — recommended reforms and IMF engagement
- Reform priorities:
  - reform water tariffs and cost recovery in agricultural and urban sectors;
  - increase investment in water infrastructure, including storage and hydro projects;
  - bring agriculture within the tax net to address equity and efficiency concerns;
  - phase out electricity subsidies and address the nexus between water and electricity;
  - encourage provincial reforms of agriculture taxation in the context of the National Finance Commission’s (NFC’s) award.
- Role for IMF engagement:
  - focus on agriculture taxation in the context of the NFC award;
  - support phasing out electricity subsidies;
  - assist in policy design for water pricing as part of broader energy sector reform.
- Policy thrust:
  - shift emphasis toward demand-side measures to promote conservation and control excessive groundwater exploitation;
  - greater engagement of local stakeholders and capacity building of water management institutions;
  - reliance on private investment and capital as integral parts of solutions for urban and hydro sectors.

*Source: TECHNICAL COMPANION NOTE, INTERNATIONAL MONETARY FUND.*

### 34.      Singapore is a densely populated city-state with no natural fresh water resources,

### _sdn1511tn - 34.      Singapore is a densely populated city-state with no natural fresh water resources,

### Overview
- Singapore is located on an island (and some 60 small islets) with a total area of some 714 square kilometers.
- Population: almost 5½ million; the country is third in the world in terms of population density.
- The “Four Taps” strategy, introduced in the late 1990s, aims at achieving self-sufficiency by 2062 and combines diversification of supply, demand management, R&D, and public support.

### The Four Taps (supply sources)
- Imports
  - Capacity: up to 1,100 thousand cubic meters a day.
  - Historical role: main source since 1932 via pipeline from the Malaysian state of Johor.
  - Under current agreements, expiring in 2061, the country is entitled to receive up to 60 percent of its current needs.
- Local catchment water
  - Capacity: 900–1,400 thousand cubic meters a day.
  - Collected from about two-thirds of the country’s territory via 17 reservoirs and comprehensive drainage/storm-water systems.
  - Treatment: chemical coagulation, rapid gravity filtration, and disinfection.
- Reclaimed water (NEWater)
  - Capacity: up to 520 thousand cubic meters a day.
  - Four plants meet up to 30 percent of the nation’s water needs; capacity is to be expanded to 55 percent by 2060.
  - Quality: exceeds the WHO standards for drinking water but primarily used by industries for non-potable uses.
- Desalinated seawater
  - Capacity: up to 230 thousand cubic meters a day.
  - Two plants launched in 2005 and 2013; among Asia’s largest seawater reverse-osmosis plants.
  - Current contribution: allow meeting up to 25 percent of the current water needs.
  - Plan: this source to continue supplying a quarter of the country’s water needs in the 2060s.

### Pricing and demand management
- Single base tariff applied to both domestic and non-domestic users; no cross-subsidization of households by industrial and commercial users.
- Households face an additional surcharge beyond a certain consumption level that brings the total tariff higher than that for commercial and industrial users.
- No subsidized “basic” consumption; targeted help provided for low-income families.
- Additional charges:
  - Flat water-borne fee (for treating used water and maintaining public sewage system; doubles for non-domestic users).
  - Flat sanitary appliance fee (charged per sanitary fitting).
  - Progressive water conservation tax (intended to reflect the marginal cost of the “next,” alternative water sources, including the R&D costs).

### Institutions, management, and financing
- Public Utilities Board (PUB)
  - Single agency responsible for all aspects of the water cycle: collection, production, distribution, and reclamation.
  - PUB is autonomous and enjoys political and public support.
  - Undertakes significant investments in PUB assets and government-owned assets under its management (sanitation and drainage infrastructure).
  - Since 2005, PUB has regularly issued bonds to finance some investments.

### Research, innovation, and sector ecosystem
- Decades of R&D enabled opening the third and fourth taps through revolutionary technologies.
- PUB cooperates with local and international researchers by providing test-beds and sharing costs and risks of tests.
- National Research Foundation promotes water-sector R&D through Environment and Water Programme Office, led by PUB.
- Institute of Water Policy established at the National University in 2008.
- Today home to over 70 local and international water companies and more than 20 research and development centers.
- Hosts the annual Singapore International Water Week for global industry players to share and co-create solutions.

### Social engagement and public programs
- PUB promotes engagement across “3P” (population and public and private sectors) through cleanup, beautification, and conservation programs.
- PUB gathers feedback from the water industry and the broad community.

### Lessons from Singapore
- High-level political support for long-range policy objectives and strong institutions, including an autonomous technocratic institution such as the PUB, are key factors enabling the comprehensive strategy.
- Rapid improvement in living standards and industrialization, with a reduced role of agriculture, may have helped secure broad public support for water management policies.

### Yemen: water scarcity and policy implications
- Water resource context and trends
  - Yemen described as one of the world’s most water-deficient countries; groundwater and rainfall are the sole sources of freshwater.
  - Water availability per capita: around 2 percent of the world average.
  - Per-capita availability trended from 113 cubic meters in 2002 to 86 m3 in 2013.
  - Access to “improved water sources” declined from 60 percent to 55 percent of the population in aggregate (2002–2013).
  - Rural population access to safe water now standing at 46 percent.
- Supply and demand dynamics
  - Annual freshwater use increased from 3.4 billion m3 in 2002 to 3.9 billion m3 in 2010.
  - Annual renewable supply remained relatively constant at 2.5 billion m3 during the same period.
  - Groundwater is being depleted; non-renewable water resources expected to be exhausted within one to two decades in the most densely populated highlands.
  - Sana’a: groundwater table dropping by more than six meters a year.
- Distributional and socioeconomic effects
  - Majority of urban consumers have access to a public water network; around 40 percent rely on trucked water (higher for rural residents).
  - Cost of trucked water: up to 10 times that of network water.
  - High cost and effort of obtaining safe water disproportionately affect the poor; rural women and girls often walk for hours to fetch water.
- Sectoral consumption drivers
  - Agricultural sector consumes around 91 percent of water.
  - Irrigation of qat consumes around 40 percent of water used in agriculture.
  - Expansion of water-intensive crops supported by subsidies (diesel fuel price held extremely low until mid-2014).
- Policy changes and impacts
  - Authorities reduced fuel subsidies and raised the price of diesel by 50 percent since July 2014.
  - To improve poverty orientation, Social Welfare Fund monthly transfers to households were increased by 50 percent.
  - Reduction in fuel subsidies expected to reduce groundwater depletion and distortions favoring water-intensive crops.
- Institutional and investment challenges
  - Government response to the water crisis has been lagging; a 2005 water sector strategy had limited impact beyond raising awareness.
  - Political instability over the past four years hampered investments, raised costs, damaged installations, and reduced billing and collection rates.
  - Desalination proposed as a long-term answer but is energy-intensive, requires large long-term investment, and seems infeasible without donor support.
- Socioeconomic costs and risks
  - Contamination and reduced household availability have contributed to disease spread in rural areas.
  - Water and fuel shortages and higher production costs risk farmer unemployment and broader economic deterioration.
  - If unaddressed, water difficulties could delay development, cause internal migration and tribal conflict, and increase urban water costs.
- Policy recommendations and reform priorities
  - Implement a broad reform agenda to rationalize consumption and improve efficiency, combined with well-coordinated donor support.
  - Implement price-based reforms and change legal and social understanding of water rights to reflect true cost of water resources.
  - Prioritize better management of water resources, targeted public and private investments, donor financing, closing the urban-rural water gap, and boosting water supply.
  - Focus on agricultural sector reforms to enhance efficiency of production and irrigation.
  - Strengthen regulation and enforcement to stop widespread and unregulated extraction of underground water.
  - Create an enabling business and regulatory environment to encourage private sector participation in financing water projects and infrastructure.
  - Full implementation of structural reforms embedded in the Extended Credit Facility program (ECF), including:
    - Completing the phase-out of highly distortive energy subsidies.
    - Directing public resources to growth-enhancing investment and poverty-reducing transfers.
    - Improving public sector management.
    - Supporting private sector activity through enhanced financial intermediation and improved access to finance for small and medium-size enterprises.

*Technical Companion Note: content extracted from the referenced IMF chapter.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-publications/external/pubs/ft/sdn/2015/_sdn1511tn.pdf_