Policy Brief- Investing in Water Security_November 2024

South Africa is a water scarce country facing a severe water crisis, exacerbated by the current and future impacts of climate change. This is a binding constraint on future growth and development. The current level of investment of R165 billion per annum to cover both operational and capital expenses is inadequate. To assess future investment requires to achieve water security by 2030, the National Planning Commission commissioned a report that was compiled under the auspices of a Steering Committee comprised of representatives from the National Treasury, National Planning Commission, Presidential Climate Commission and the Development Bank of Southern Africa (DBSA).1 The DBSA provided the funding for the research team and the compilation of the report. Three scenarios were assessed: a baseline business-as-usual scenario, a worst scenario and a sustainable alternative. The sustainable alternative is recommended because it is the most affordable and delivers the best results from a developmental and environmental perspective. The overall conclusion is that private sector investors need to be drawn into the funding of water as a public good. It is proposed that this Policy Brief is used as a basis for an engagement with the financial sector to ascertain under what conditions it will be possible to increase investments in the water sector across the entire value chain from upstream water resources to downstream water services. Introduction The ‘Dublin Principles’ for Integrated Water Resource Management (IWRM) were globally agreed in 1992 and it was no coincidence that when South Africa’s first democratic government began formulating water policy in 1994, and published the National Water Act in 1998, that the country’s legislation resonated with the principles of IWRM (Allen, 2003). South Africa’s National Water Act (NWA) commences with the idea that “… Water is a scarce and unevenly distributed national resource which occurs in many different forms which are all part of a unitary, inter-dependent cycle and …the need for the integrated management of all aspects of water resources and, where appropriate, the delegation of management functions to a regional or catchment level so as to enable everyone to participate” (RSA, 1998). The NWA replaced South Africa’s Water Act (1956) founded on European 1 .