The global population explosion and subsequent elevated levels of agricultural and industrial production, are putting increasing pressure on existing water supplies. According to estimates by the Water Resources Group, global water demand is on track to outpace supply by 40% within the next two decades, which is why water resource management should be prioritised.
And with the potential effects of climate change compounding this water crisis, the stakes are raised even higher. Complicating this challenge even more, is the reality that there is no singular water crisis as every country faces problems unique to their area and makeup.
In India the growing population is moving towards a middle-class diet that relies more heavily on wheat and sugar, the production of which requires more water. China’s large agricultural sector and fast-growing economy are driving rapid industrial growth and urbanisation, leading to a much higher demand for water.
A complex situation
In South Africa, the challenge of water resource management is complex. Our semi-arid country is characterised by low rainfall, limited underground aquifers, and a reliance on significant water transfers from neighbouring nations. Soon the South African government will face difficult economic and social decisions relating to the division of water among the agricultural sector, key industrial activities, such as mining and power generation, and growing urban centres.
The estimated demand for water in South Africa will reach 17,7 billion cubic metres in 2030. The current supply will equal only 15 billion cubic metres and is severely constrained by low levels of highly seasonal rainfall (approximately 50% of the world average), insufficient underground aquifers, and a dependency on water transfers between basins and from other countries.
South Africa purchases almost 25% of its total water supply from Lesotho. Furthermore, the effects of climate change could exacerbate the problem significantly. Even a small decrease in rainfall (and a corresponding increase in irrigation requirements) could result in a gap as large as 3,8 billion cubic metres.
Increased water demand
In South Africa the agricultural, industrial and urban sectors account for a majority of overall demand: 8,4 billion cubic metres, 3,3 billion cubic metres, and 6 billion cubic metres respectively. However, each region faces challenges that are unique to its prevalent economic activities.
The basins that supply the largest South African cities – Johannesburg, Cape Town, Durban and Pretoria – are expected to face severe gaps caused by increased household and industrial demand. The Berg Water Management Area, which includes Cape Town, must close an estimated gap of 28% to meet future demand.
Household demand is driven by rising income levels and population growth, as well as a national drive to improve basic living conditions, which includes more widespread use of showers and toilets, and landscaping in residential areas. Projections for 2030 indicate that household demand will account for 3,6 billion cubic metres, with the wealthiest quintile of the population accounting for half of total withdrawals.
At the same time, demand from industries such as mining and power generation will be an increasingly significant factor. By 2030, demand could amount for as much as 3,3 billion cubic metres. Power generation will account for 12% of total demand, mining for 18% and manufacturing for the remaining 70%.
The power generation dilemma
Meeting the demand for power generation poses yet another challenge. Much of the additional power generation capacity planned for 2025, will come from coal-fired power plants that are located near coal beds. As local water supplies are typically insufficient for both coal mining and power generation, reliance on water transfers from other areas will likely ensue.
Growing agricultural demand in regions such as the Lower Vaal Water Management Area places additional strain on supplies, despite caps on irrigation withdrawals. Despite the enormity of the challenge at hand, economical solutions are within reach.
Closing the gap across these sectors will involve a sustainable and cost-effective combination of three approaches, two of which make use of technical improvements (increasing supply and improving water productivity), while the third is related to underlying economic choices and involves actively reducing withdrawals by changing underlying economic activities.
A balanced approach is the best way to close South Africa’s water supply gap. It is suggested that cost-effective measures to increase water supply infrastructure such as dams should comprise 50% of the improvement efforts, while agricultural efficiency and productivity improvements constitute 30%, and more judicious use in industrial and domestic settings account for 20%.
Plans on the table
In August 2019 the National Treasury released its Economic transformation, inclusive growth, and competitiveness: Towards an economic strategy for South Africa report to steer South Africa away from its unsustainable trajectory. The report highlights five fundamental building blocks for sustainable long-term growth and identifies a series of specific and detailed reforms to increase potential growth.
These growth reforms are drawn from the National Development Plan and cover the following themes:
- Modernising network industries.
- Lowering barriers to entry and addressing distorted patterns of ownership through increased competition and small business growth.
- Prioritising labour-intensive growth in sectors such as agriculture and services, including tourism.
- Implementing focused and flexible industrial and trade policy.
- Promoting export competitiveness and harnessing regional growth opportunities.
Water and its management are part of the discussion when some of these themes are addressed. The report also pays particular attention to the role of water in agricultural production. Some of the report’s recommendations are discussed in this article.
In terms of modernising the water network, the report states that, in addition to South Africa’s water resource constraints, a significant amount of water is lost in the water provision system.
Water lost to leakages, comprises 25% of total water consumption and non-revenue water 68%. This situation can be attributed to outdated and poorly maintained infrastructure‚ a complex institutional structure, water tariffs that do not adequately cover costs and entities that face significant technical, financial, and management challenges. South Africa will not be able to support inclusive growth and economic transformation if our water supply is severely constrained.
According to the 2019 Budget Review, water infrastructure projects have been allocated R90,4 billion between 2019/20 and 2021/22. There is a need for a comprehensive management strategy for investment in water resource development, bulk water supply, and wastewater management.
It is also important to learn from the successes of the Independent Power Producers Programme and adapt this model to infrastructure provision in the water sector, particularly in areas such as the provision of water, irrigation and sanitation.
The government is developing appropriate institutional options for service provision through the establishment of regional water and wastewater utilities, and expanding the mandates of the existing water boards. It is also establishing an independent water regulator that will improve the overall effectiveness of water provision and ensure appropriate price setting. There is also a need for a national water conservation programme to reduce water wastage and demand in urban areas.
South Africa suffers from high levels of unemployment, compounded by inefficient spatial patterns that make participation in the formal and informal economy costly and difficult for individuals.
Like most open economies, rapid technology changes in production are creating an increasing bias towards the demand for skills-intensive employment.
In a skills-constrained economy, this has the unintended consequence of increasing wage premiums, which further entrenches inequality, but most importantly discriminates against the bulk of South Africa’s labour force (semi- and unskilled workers) and contributes to rising unemployment statistics. Agriculture and other services, especially the tourism sector, can be a very good conduits for labour-intensive growth.
Water access for agriculture
Access to water and irrigation systems are critical for unlocking increased investment in agriculture. The sector, which is the largest water user, consumes more than 60% of available surface water.
The increasing demand for water, aggravated by climate uncertainty, literally puts agriculture at the back of the queue in terms of access to additional water resources. The current 1,5 million hectares that are under irrigation can be expanded through the judicious use of existing water resources and the development of new water schemes.
There has also been insufficient efforts made towards reducing the substantial loss of potential crop area and production arising from inefficient irrigation practices and maintenance backlogs. For example, with more appropriate water management policies in place, it would be possible to increase the acreage under citrus in the Sundays River Valley, by approximately 30%. This will have a huge impact on wage-earning opportunities.
In many countries irrigation is important for reliable agricultural production and the government has played an important role in providing irrigation infrastructure in all these agricultural success stories.
The impact of proposed reforms
The last section of the report uses modelling to estimate the impact these proposed interventions will have in future. In terms of agriculture, improved marketing and effectively leveraging public-private partnerships to boost market access, can increase foreign demand for South African agricultural exports.
The assumptions relating to agriculture are informed by modelling work completed by the Bureau for Food and Agricultural Policy for the agriculture workstream of the CEO Initiative. This modelling exercise, conducted in partnership with key industry associations in agriculture, contains an assessment of the potential impact of specific trade policy and water interventions on agricultural growth.
These and other improvements to agricultural competitiveness materialise gradually over the simulation period. The model includes an improvement in export demand and productivity, which results in a R6 billion increase in agricultural exports by the end of the ten-year simulation period. – Dr WA Lombard, Department of Agricultural Economics, University of the Free State
For more information and references, send an email to the author at LombardWA@ufs.ac.za.