Stalling the big steal - Water: Privatization

New Internationalist, March, 2003 by Rudolf Amenga-Etego

The IMF and World Bank are prising open the water market in Ghana--whether ordinary people can afford it or not. Rudolf Amenga-Etego reports on a crime in the making and the fightback.

GHANA'S most celebrated comedian, Ajax Bokana, once described the IMF as the International Monsters Fraternity and the World Bank as the World Bullies. He meant, of course, to make people laugh at their worries. But one particular worry just won't budge -- the creeping privatization of Ghana's drinking water.

After two decades of structural adjustment imposed by the International Monetary Fund and the World Bank in which literally anything that could be sold was sold, Ghana still remains 'a highly indebted and poor country'. In May 2001 the then Minister for Works and Housing Kwamena Bartels, speaking on behalf of President John Agyekum Kufour, admitted what was common knowledge: 'After 20 years of implementing structural-adjustment programmes, our economy has remained weak and vulnerable and not sufficiently transformed to sustain accelerated growth and development. Poverty has become widespread, unemployment very high, manufacturing and agriculture in decline and our external and domestic debts much too heavy a burden to bear.'

For the 13.5 million Ghanaians who live in urban slums and rural areas and who represent 75 per cent of the population, even this rare honesty from a minister of state was an understatement. Since 1995 when the World Bank pushed the Ghanaian Government to develop specific options to privatize the country's water service, the poor have been systematically deprived of their right of access to safe water. The price of water has been increasing at an alarming rate, in order to set the stage for the Bank's treasured principle of 'full cost recovery'. Pro-privatization consultants hand-picked by the World Bank are peddling it for all they're worth, turning the Bank's involvement into a front for the transnational corporations interested in taking over Ghana's water. Leading the pack are the French companies Vivendi, Suez Lyonnaise and Saur. In hot pursuit is Biwater of Britain. In March 2002 the IMF stated that Ghana would get the next tranche of its loan under the so-called Poverty Reduction and Growth Facility on ly if it aimed for full cost recovery in all public utilities, including water.

The World Bank has protected the interest of the corporations from the onset by carefully designing a business framework that cherry-picked the lucrative urban water service for the incoming corporations, leaving the less tempting sewerage and sanitation bits and rural water provision for local authorities and communities to manage. The IMF complemented this by imposing an automatic tariff-adjustment formula that effectively indexed the price of water in Ghana to the US dollar. Susanna Mensah of Madina summed it up when she asked at a recent community meeting called to discuss water-rate increases: 'The rain does not fall only on the roofs of Vivendi, Suez, Saur and Biwater, neither does it fall only on the roofs of the World Bank and the IME; it falls on everyone's roof. Why are they so greedy?'

Faced with dwindling revenues, increasing poverty and deeper cuts in social expenditure by the central government, local authorities have been unable to cope with the costs of managing wastewater and sanitation. Open sewers have become commonplace in all the cities of Ghana. Mountains of garbage compete with residential buildings for space. Typhoid and cholera have become leading killers in the cities. The Ministry of Health has estimated that 70 per cent of diseases in Ghana are water related. Yet projects to expand water services to the urban poor are being frustrated by the World Bank and the British Department for International Development who are withholding funding pending the signing of the deal giving the water transnationals the go-ahead. This despite the fact that privatization has already effectively begun through exorbitant pricing. Most bizarrely the proposed terms of the contract for privatization contains no obligation on the part of the incoming transnational corporations to provide water to urban low-income communities (in World Bank speak); that burden rem ains with the highly indebted Ghanaian Government and the communities themselves. The Bank and the corporations are only interested in supplying water to affluent communities who have the ability to pay so-called 'market tariffs'.

The plan for impoverished rural areas is even more absurd. The intended privatization has shifted responsibility for providing drinking water through the construction and maintenance of wells and boreholes from the national government to local communities. This is a master stroke of IMF/ World Bank policy, intending to downsize the national budget in order to save some money for loan repayment. It's a radical departure in policy terms for Ghana. In the past the Government practised a needs-driven policy that targeted the most needy communities in order to promote public health. These were communities with a high prevalence of diseases such as guinea worm and were invariably very poor. This policy ensured that those with the least ability to provide for themselves had a right of access to safe water. Through open arm-twisting and naked bullying this policy was reversed in 1995 with the World Bank's insistence on full cost recovery. Water was transformed from a human right into a commodity to be traded on the open market. From that time onwards clean water became available only to those who could pay for it.