Private sector exclusion fuelling water, sanitation crisis — Presidential committee member

A member of the Presidential Steering Committee on Sanitation and National Coordinator of the Organised Private Sector in Water, Sanitation and Hygiene, Nicholas Igwe, on Tuesday, blamed the persistent water and sanitation crisis in Nigeria and across Africa on the exclusion of private investors from the sector.

Speaking in Abuja during a media briefing ahead of a conference aimed at addressing funding gaps in the Water, Sanitation and Hygiene sector, Igwe said the sector had remained heavily dependent on donor agencies and civil society organisations because governments failed to create the institutional framework needed to attract private capital.

He argued that the challenge facing the sector was not a lack of funding or technology but the absence of structures capable of encouraging long-term private investment.

“How is it possible that a world that has built fibre optics across ocean floors, that has put rovers on Mars, that has developed vaccines for previously incurable diseases, more than 600 million people on the African continent still lack access to a reliably safe water source, and nearly twice that number lack access to basic sanitation?

“The scale of this failure is not the result of technological limitation. It is not the result of insufficient understanding. It is not even primarily the result of insufficient funding. It is the result of a structural failure,” he said.

According to him, African governments have failed to address the reasons private investors have stayed away from the WASH sector.

“African governments in the past have not been able to really address the issues confronting the water sector in a way to identify the reasons why the private sector is not coming in. Why the sector has been dominated by donor agencies and CSOs,” he said.

Igwe noted that despite the availability of capital, technology, engineering expertise and political commitments, the sector lacked the institutional arrangements needed to make investments viable.

“The water sector has the material. We have the capital, we have the technology, we have the engineering knowledge, we have the political commitments and the private sector actors willing to invest. What it lacks is the arrangement, the institutional structure that determines how these materials come together in a way that is stable, scalable and self-sustaining.

“In summary, the gap is not a funding problem; it is an architectural problem,” Igwe said.

He disclosed that while Sustainable Development Goal 6 requires about $114bn annually worldwide, Nigeria’s sanitation economy alone could be worth $26bn by 2030, yet private investment in the sector remains negligible.

“Nigerian sanitation economy alone represents a $26bn market by 2030, almost entirely uncaptured by private investment as we speak. Nobody has done anything to grab that $26bn from now to the year 2030,” he said.

Drawing comparisons with the telecommunications, energy, health and housing sectors, Igwe said liberalisation and regulatory reforms enabled private capital to transform those industries, unlike the water sector.

“In the 1990s, the telecom sector was mostly under government operational leadership. It was difficult for the private sector to bring in private capital. But after liberalisation, private capital came in in billions of dollars.

“Today, in Nigeria and many African countries, people can afford access to mobile phones and communication services because the private sector was allowed to participate,”he said.

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He added that similar reforms in the energy sector attracted investors and improved service delivery.

“The energy sector in South Africa had issues of load shedding in the past. Today it is becoming a thing of the past because the private sector came in and the system allowed them to come in,” he said.

Igwe identified six major barriers discouraging private investment in the WASH sector, including revenue uncertainty, poor risk allocation, long investment recovery periods, regulatory weakness, political interference, inadequate project preparation and the absence of standardised institutional frameworks.

“When you don’t have a revenue stream that is sustainable and guaranteed, and when you don’t have off-takers, it becomes difficult for the private sector to come in,” he said.

He further warned that political interference in regulation had continued to undermine investor confidence.

“When the regulators are appointed by the government or ministers and there is political interference, it becomes very difficult for the private sector. Most private investors do not want to take the risk of putting in billions of dollars and at the end of the day not getting their money back,” he said.

The WASH expert also criticised the overreliance on donor agencies and civil society organisations to drive sectoral development, saying government budget allocations alone would not bridge the funding deficit.

“What you hear is CSOs asking governments to increase their budgets. Budget increases in any form would not be able to bridge the huge gap that we have in the sector,” he said.

“There is no way the government will allocate all the funding that they have for the country to the water sector.”

Igwe called on governments across Africa to create an enabling environment for private participation, warning that failure to reform the sector could trigger wider social crises.

“The government should come and see how they can sit down with private organisations to see how private capital can flow into the sector, like what happened in the energy, telecom and other sectors,” he said.

“If this is not done as soon as possible, it will lead to social crises that the governments themselves will not be able to handle.”

He added that without reforms in tariff structures, regulatory systems and investment protections, private capital would continue to avoid the sector despite the growing demand for water and sanitation services across the continent.

Despite billions of dollars in donor funding and decades of government intervention, access to clean water and basic sanitation remains a chronic crisis across Africa, with over 600 million people on the continent still lacking reliable, safe water sources, while the private sector, which transformed telecommunications, energy and housing, remains largely absent from the water and sanitation space.