Saturday, November 11, 2017

ANALYSIS: Raising the watermark in Tanzania’s growth picture

 

Tanzania is not a country one would ordinarily expect to find in the ranks of the water stressed. It hosts or shares at least 11 fresh water lakes and is home to countless rivers, including the Great Ruaha. Compared to some of its neighbours, Tanzania is relatively blessed with its water resources.

Yet over the past 25 years, the country’s population has doubled and the size of its economy has more than tripled. As a result, Tanzania’s renewable freshwater per capita over the same period has declined from more than 3,000m3 to around 1,600m3 per person today – below the 1,700m3 level that is internationally considered to be the threshold for water stress.

Perhaps the most poignant picture to capture the scale of stress would be that of the Great Ruaha River, which flows through the Usangu wetlands and the Ruaha National Park into the Rufiji River. To call it ‘Great’ as its name suggests, might be something of a misnomer today.

The Great Ruaha is now a shadow of its former self, running dry for 2-4 months each year. With its wet season flows also now under threat, downstream communities and industries – including hydropower generation – are under increasing stress. The situation is also endangering wildlife in the Ruaha National Park, and the tourist income that comes from it.

The primary cause of this change is expanding informal irrigation upstream. For the individual farmers concerned, expanding irrigation represents much needed economic opportunities, but the cumulative effect on the river system is unsustainable.

This example illustrates one of the key challenges of water resource management: the need for proactively managing trade-offs in water use across many different stakeholders.

Water is a multifaceted resource, critical not only to human welfare and the environment, but also for a country’s economic fortunes. It is against this backdrop that the latest Tanzania Economic Update, published by the World Bank today, describes the urgent need for better water resource management to ensure that water does not become a brake on Tanzania’s development.

Around 89 per cent of Tanzania’s water is used for agriculture (compared to a global average of 70 per cent), while around 10 per cent is used for domestic consumption (on a par with global averages) and about one percent by the industrial sector (very low by global standards). Tanzania’s economic growth path will require a lot more than 1 per cent of its water for industry, and so one key challenge will be how to reduce the large quantity of water consumed by agriculture while increasing food production and protecting rural livelihoods.

Water is also a cause of economic shocks. In the past 15 years, there have been seven significant droughts in Tanzania. The country’s agricultural productivity suffers an estimated average of $200 million in annual losses because of weather-related risks, especially drought. Earlier this year, aggregate food prices increased by 12 per cent due to drought-related food shortages. Hydropower production, which accounts for around 42 per cent of energy generation in Tanzania, also declines during droughts, creating major additional generation costs.

Tanzania has made progress towards increasing household access to water supplies, with 63 per cent of the population currently having access to basic and improved water supply services. On the other hand, only 27 per cent of the population has access to basic and improved sanitation. While the absolute amounts of water required for domestic water and sanitation are not great, ensuring that water sources are sustainable, not polluted, and properly managed is critical. Several of Tanzania’s major cities, including Dar es Salaam, Arusha and Morogoro take their water from stressed rivers with inadequate source protection, while Dodoma relies almost entirely on groundwater for its water supply.

The challenge is how to manage water better. One key step is to allocate water to uses that maximise the economic, social and environmental benefits for the country. Trade-offs in water use – such as between agriculture and hydropower production – are already occurring, but it is not clear that they are happening in ways that maximise benefits for Tanzania. Such trade-offs will require clearer institutional mandates, stronger coordination across sectors, strong enforcement, and better prioritization of water-related investments. In short, it requires political as well as technical leadership.

Another key part of managing water better is to value it appropriately. Tanzania needs to value and price water in ways that reflect water’s growing scarcity, create disincentives to wasting water, as well as recognize its differing values to households, farmers, cities, and industrialists. Subsidising small amounts of household water for the poor is reasonable; subsidizing large amounts of water for industry, farmers and utilities is not. Bulk raw water prices (i.e. prior to treatment and delivery to houses) in the Wami-Ruvu basin are so low that running a tap for an entire year would cost around $2.60.

Finally, it’s often said that you can’t manage what you can’t measure. This is particularly true for water, where good information can make trade-offs easier to manage, reduce water losses and waste, and help minimise the social and economic impacts of droughts and floods. Data on water is relatively scarce in Tanzania, particularly data on groundwater, water quality, and water use. Investing in better data collection (including in new technologies), stronger institutions, and prioritized infrastructure should be an economic priority for the current government.

Let me end on a note of optimism. Water does not have to become a significant constraint to growth and prosperity. Tanzania still has a reasonable water endowment compared to many other countries in the region and the world. Prudent water resource management policies, strengthened institutions, better data, and a collective commitment to sharing this scarce resource will ensure that Tanzania can reach its development goals with the water it has at hand.

* Ms Bird is the World Bank Country Director for Tanzania, Malawi, Somalia and Burundi

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