Development Financing, Utility Privatization and Poverty Reduction in Africa: An Insight on Water Privatization in Nigeria
35 Pages Posted: 13 May 2010
Date Written: September 1, 2007
African countries in a bid to foster growth and development process have been influenced by the World Bank and the International Monetary Fund (IMF) to engage in reform programmes. One of such programmes which gained momentum during and after the Structural Adjustment Programme (SAP) is the privatization programme which was embarked upon under the guise that the development process of these countries are largely dominated by the public sector hence the need to weed the public sector of some expenditure and transfer their ownership to the private sector to boost efficiency and increase profitability. The study tried to analyze the effect of privatisation of utility like water to poverty reduction in Africa and found that water privatisation in most African countries instead of reducing poverty aided its escalation through its attendant high costs which has affected accessibility, and affordability negatively and increased displacements. Evidence from the study also show that water privatisation redistribute income in favour of the rich instead of the poor and this has led to increase in the outbreak of water borne diseases which claimed lives of thousands of households. On the other hand increasing public expenditure in the water sector led to improvements in water provision that is more sustainable. The study raised that consistent increase and proper monitoring of public expenditure into the sector will help achieve a 100 percent access to drinkable water for both urban and rural households if properly carried out hence what Nigeria needs do is to reform enterprises and the ministries, departments and agencies of government that provide water services. Such reform should be more focused in operations modalities since the performance is below efficiency rather than wholesale privatisation of the water sector as proposed by the World Bank.
Keywords: Development Financing, Water Privatization, Poverty Reduction, Africa
JEL Classification: H44
Suggested Citation: Suggested Citation