afrol News, 2 May - Privatisation of water in Ghana is a delicate issue. An earlier attempt to privatise public water services, following pressure from the International Monetary Fund (IMF), failed on massive civil society resistance. As the government makes a new effort, Ghanaian and international organisations are mobilising for the upcoming fight.
International pressure groups - including the US-based Public Citizen, Christian Aid-UK and Oxfam-Netherlands - are already present in Ghana. Their objective is to conduct research on "water privatisation and cost recovery policies promoted by the IMF and the World Bank," according to Public Citizen. The groups claim that water privatisation hampers the access to clean water in this poor, West African country, and cite examples of "similar confrontations in Argentina, Bolivia, the Philippines and South Africa."
Ghanaian Minister of Finance, Yaw Osafo-Maafo, recently made a statement on the issue, emphasising that there were only plans to privatise the urban water supply. He is confident that the confrontation will not be grave, believing that at earlier attempts, "the packaging of the whole message was not done right." After he had a chance to re-present the matter, "it became clear to the whole country that there is a need for privatisation," Osafo-Maafo told foreign journalists.
Within Ghana, there is however not an impression of a universal agreement of the need for privatisation. Indeed, a Ghana National Coalition Against the Privatisation of Water (CAP) has been established, organising a long row of organisations and private individuals. CAP emphasises on the need of a public water service to keep prices under control and therefore make access to clean water a possibility for urban poors.
Minister Osafo-Maafo does not buy those arguments, as the public supplier in his eyes already has failed to manage water resources effectively and provide cheap water to all urban dwellers. "Now, only 52 percent of the water from the main dam reaches Accra for distribution. This is a loss of 48 percent," he argues. "Now, if you have these types of figures, and if somebody else manages it so that we have, say, 95 percent of the water available, obviously, water will be cheaper in Accra than it is at the moment."
Not disagreeing with Osafo-Maafo's efficiency argument, anti-privatisation activists refer to experiences made in many other countries where the IMF and the World Bank have pushed through a similar program. As local capital is missing, multinational companies have bought up former public water companies promising prices would not raise significantly. Later, price hikes were observed and services did not improve significantly.
In Ghana, water supply prices already increased by 95 percent in May 2001 and IMF and World Bank loan conditions could mean even more increases to bring prices up to a 'market rate' before a privatisation is realised. "The current water tariff rates are already beyond the means of most of the population in Ghana," says Rudolf Amenga-Etego of CAP. "How will the population possibly be able to absorb a so-called 'market price' in the context of privatisation?" he asks. Currently, about 35 percent of the population lacks access to water services, CAP assesses.
Osafo-Maafo however holds "the population is not worse off if we invite private participation" and adds his government has "decided to go again." He however makes an important clarification, saying water privatisation in Ghana "has nothing to do with the rural areas, because there, the bore holes and other systems are managed on a village cooperative system. ... I know there is a need to subsidise the rural water system. The Government has clearness of mind to do so," the Finance Minister emphasises.
Ghanaian actionists agree to the need to subsidise the rural water system but cannot see why there should be no need to subsidise the urban water system. Patrick Apoya, an activist working in a health programme, called the plan to cut urban water subsidies "a deadly poison and a prescription for death for the poor."
The IMF, normally perceived as the promoter of the large number of privatisations of basic social infrastructure in developing countries, denies it has any responsibility. "Since there are major implication for the public finances and macroeconomic stability, the IMF has provided advice in this area," Kathleen White of the Fund writes in a letter answering a request by Public Citizen. "Far from imposing solutions, however, as your letter suggests, we have in fact supported the proposals drawn up by the independent Public Utilities Regulatory Commission." The IMF however demands plans and reforms to achieve "macroeconomic stability" by countries needing its financing aid. A basic ingredient in achieving this is privatisation.
Sources: Based on Ghanaian
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