Understanding Water Supply Reforms in Nigeria S Niger Delta: a RESEARCH NOTE

Understanding water supply reforms in Nigeria’s Niger Delta: A RESEARCH NOTE

By

Ukoha Ukiwo[1]

Introduction

Since the 1980s, most developing countries have embarked upon reform of the water supply and sanitation sectors. Although reforms of some sorts were necessary in many of the countries given the fiscal crises that confronted them from the late 1970s and shortfalls in meeting their targets for water and sanitation, the proactive role of multilateral organizations, principally the World Bank and the International Monetary Fund (IMF), in imposing reforms as conditionality for loans and debt service have been controversial (see Goldman 2005). The Bretton Woods institutions have been criticized for stage-managing the take-over of the developing world by making privatization of water supply a prerequisite for financial support (Finger and Allouche 2002, Amenga-Etego and Grusky 2005). Given the primacy attached to privatization, it is not surprising that commentaries on the reforms have revolved around debates on the pros and cons of privatization. A corollary of this concern is that the debates have largely revolved around countries in which foreign private companies have taken over the business of supplying potable water and sanitation services. For instance, South Africa, Cote d’Ivoire and Ghana have attracted most of the studies of water and sanitation reform in sub-Saharan Africa largely because of the incursion of Big Water companies from the global North. Such a focus, while important, leads to an underestimation of the extent of reforms that may be taking place elsewhere in the continent. The neglect of countries that have not embarked upon wholesale divestiture and privatization also obscures the roles of promoters of reform and their modus operandi, the reasons why privatization was either not attempted or failed in most countries and the impact of reforms on state and society relations in such countries. Moreover, the narrow focus on privatization case studies obscures the more fundamental transformations taking place in these countries, as a result of the hegemonic sway of the integrated water resources management (IWRM) framework. At the core of IWRM are three interrelated principles, namely: recognition and valuation of the whole gamut of the social, economic and ecological uses of water; adoption of integrated planning and management of agricultural, municipal, industrial and ecological demands for water; and institutionalization of partnerships between state institutions at various levels, the private sector and civil society in water management (Conca 2006:124). The present study proposes to assess these profound changes in the water supply sector in one such country, Nigeria.

Like other developing countries, multilateral financial institutions have been promoting reform of the water supply sector in Nigeria over the past three decades. The overriding objective of the reform has been outright replacement of the supply driven approach in which the state was held responsible for provision of potable water and sanitation services with a demand driven approach whereby the major decisions are taken by the private sector and the consumers of portable water. Thus, Bretton Woods in particular and the international development community in general have increasingly and rather overzealously promoted privatization and community participation as the panacea to the water crisis that threatens the attainment of the millennium development goals in Nigeria’s growing cities and pauperized rural areas. The proposed research will investigate the making, mainstreaming, and effects of this new orthodoxy on water provisioning in Nigeria. More pointedly, it will explore what Conca (2006) has rightly called the tension between metanorms of water marketization and water citizenship. It will examine the extent to which the objective of increased full-cost recovery through such strategies as public-private partnership is consistent with or contradicts the objective of greater community participation, and vice versa; and whether or not ultimately the poor that were undoubtedly marginalized in the outmoded statist regime and are ostensibly presented as the target beneficiaries of the new integrated model, are having better access to water in the emerging dispensation. It seeks to examine the ways in which the increased commodification of water associated with World Bank instigated market reforms might compromise or be compromised by the lofty objectives of universal access to water, community empowerment and sustainable resource management.

The investigation will be based on case studies from Nigeria’s Niger Delta region which is richly endowed with water resources but paradoxically is host to communities with poor human development status, partly as a result of perennial lack of potable water and basic sanitation services (UNDP 2006). This research note is divided into five broad sections. Following the introduction, section two reviews the literature on the global reform on water supply. The third section examines the introduction of the reform agenda under the aegis of multilateral institutions such as the World Bank, International Finance Corporation (IFC) and the UN agencies, OECD development agencies such as the European Union, the United States Agency for International Development (USAID), the UK Department of International Development (DFID) and the Japan International Development Corporation (JICA); and non-governmental organizations such as WaterAid. In section four, I focus on the emergent ‘shared vision’ on provision of potable water in Nigeria’s policy sector. The fifth and final section provides justification of the choice of the Niger Delta, puts the research questions in the context of wider debates in water supply reform and ends with a brief outline of the proposed research design.

The Global Agenda on Reforming water supply

The water reform agenda is an integral aspect of the neoliberal revolution that began in the early 1980s. This revolution was characterized by the discrediting and toppling of neoclassical Keynesian orthodoxy that promoted an interventionist role for the state in the development process. The state was not only supposed to invest in areas deemed unattractive to capital interests but also to promote distributional policies that profit oriented private sector initiatives are not only innately insensitive to but also tend to undermine. In the developing world, where the private sector was either absent or nascent, state intervention was also to be attuned towards grooming a national bourgeoisie in a system Sayre Schatz (1977) aptly called ‘nurture capitalism’. For three decades, Bretton Woods’ lending was directed at enabling the state to invest in those sectors supposedly unattractive to the private sector. This liberal lending regime resulted, in the late 1970s, in a situation in which many of the states had over borrowed beyond repayment capacities, culminating in the debt crisis.

The debt crisis generated a new ‘consensus’ in economic thinking known as the Washington Consensus which canvassed downsizing of the state and the removal of all encumbrances to the reign of the market. The state was charged and convicted for profligacy, inefficiency, institutionalized rent seeking and irrationality. State intervention purportedly distorted ‘pure’ market mechanisms resulting in such undesirable outcomes as overvalued currencies, over-subsidized social services, bloated bureaucracies and malfunctioning public utilities. The punishment, or better put, the reform needed for the state was significant retrenchment. The state should be cut to size and restricted to its ‘traditional’ function as ‘regulator’. Against the backdrop of the ubiquity of the state as a multitask machine, the logical outcome of the reform which required the state to surrender its holdings is what Watts (1994) has called ‘the privatization of everything’.

The reform programme was also expected to overhaul the architecture of state-society relations. Development was hitherto a top-down process in which the power, resources and responsibilities were over concentrated on the central government which was far removed from but exercised dominion over a largely ‘uncaptured’ peasant (rural) population (Hyden 1982). It was therefore necessary that decentralization – the devolution of governmental powers, functions and resources to local authorities should be implemented alongside privatization. The concurrent implementation of privatization and decentralization -and the fact that the latter is apparently more acceptable than the former - resulted in a situation in which privatization is either subsumed under decentralization or both are used interchangeably. The instrumental value of the conflation of privatization and decentralization manifests itself in the reform of the water and sanitation sector.

For instance, in the glossary of its major policy document on water reforms, the World Bank (1993:5) defines decentralization as:

The distribution of responsibilities for decision making and operations to lower levels of government, community organizations, the private sector and non-governmental organizations.

The glossary does not include privatization. However, the policy statement on the objectives of decentralization indicates that both terms are used interchangeably, to wit:

The principle is that nothing should be done at a higher level of government that can be done at a lower level. Thus, where local or private capabilities exist and where an adequate regulatory mechanism can be established, the Bank will support central government efforts to decentralize responsibilities to local government and to transfer service delivery functions to the private sector, to financially autonomous public corporations and to community organizations such as water user associations. The privatization of public water service agencies or their transformation into financially autonomous entities, and the use of management contracts for service delivery will be encouraged (World Bank 1993: 15-16).

The World Bank blueprint for water resources needs to be understood within the context of emerging international understanding and consensus on the management of water resources. It is noteworthy that it followed on the heels of the International Conference on Water and Environment (ICWE) held in Dublin in January 1992. The major points in the Conference statement which became known as the Dublin Principles marked a paradigm shift from earlier concerns about availability and sustainability towards IWRM. These four principles are:

· Freshwater is a finite and vulnerable resource, essential to sustaining life, development and the environment.

· Water management should be based on a participatory approach, involving users, planners, and policy makers at all levels.

· Women play a central role in the provision, management, and safeguarding of water.

· Water has an economic value in all its competing uses and should be recognized as an economic good (cited in Conca 2006:141).

While principles one and three were generally well received despite their policy implications in terms of equity, principles two and four generated controversies. This is because they were construed as challenging the dominant role of state in water management and overturning earlier understandings of water as public goods and human right. It is not surprising therefore that commentaries have focused on the desirability or otherwise and compatibility of privatization, decentralization and community participation. After all, underpinning reforms were two principles, namely the instrument principle and the institutional principle (Nickson 1997). While the instrument principle revolved around the economic value and cost of water the institutional principle emphasized participation of all stakeholders in water management.

Arguments in favor of reform of the water supply sector have been framed in negation of the original rationale for state intervention. Historically, the original effort to supply water to households from mid-nineteen century Europe and North America were undertaken by private business interests. However, by the first few decades of the twentieth century there was an emergent consensus that state intervention was necessary due the public health benefits anticipated from universal coverage and the sheer size of investment needed which was beyond the reach of private businesses at the time (See, Davis 2005, UNDP 2006). Consequently water was progressively conceptualized as a ‘public good’. Against this backdrop, the starting point of reform proponents has been the demystification of the ‘false assumption that it (water) is a public good’ (Nickson 1997:167). In contradistinction to popular parlance in which ‘public goods’ are seen as any good or service provided directly by the public sector, the neoliberal paradigm offers a more restrictive (economic) definition (see Hanemann 2006). In their opinion, to qualify as public good, a good or service should be non-excludable, non-rivalrous and non-rejectable. In other words, it would both be automatically available to everybody once provided to one person; the quantity available to one person does not diminish the quantity available to another person; and it is not possible for anyone to refrain from consuming it. Neoclassical economic theory suggests that goods and services with such qualities such as clean air, defense and street lights should be provided at no cost to the general public albeit with funding from taxes (see Hanemann 2006).

Moreover, reform proponents argue that, in its potable form, it is possible to exclude some people from access to water. Potable water does not qualify as a public good because it has seldom been provided free of charge (Malkin and Wildavsky 1991 cited in Nickson 1997). It is therefore a ‘private’ good, albeit, with certain features. These features are: (i) it is a natural monopoly, due to the economics of scale usually derived from a piped network; (ii) it has both positive and negative externalities which make its benefits not easily captured in market prices; and (iii) it is a merit good whose benefits outweigh the utility calculations of individual consumers. Proponents of the ‘private’ good perspective however argued that the possession of these features only ‘provide the justification for public-sector intervention in order to counter possible divergences between private and social costs and benefits … they do not provide any argument in favour of direct public provision’ (Nickson 1997:168). In other words, state intervention should strictly be devoted to regulation and facilitation, and not delivery.

The fulcrum of the preference for private sector delivery is also the belief that it is more efficient in service delivery given its overriding profit motive that engenders innovative cost-saving measures. This claim is buttressed by the failure or inefficiency of public sector utilities, especially in developing countries. The weakness of the state is depicted as having led to wastage of valuable water resources (through leaking pipes), and fiscal imbalances that foreclose new investments, especially in semi-urban and rural areas. Thus, state involvement is discredited for being injurious to sustainability in both economic and ecological aspects. State inefficiencies, ceteris paribus, paradoxically subvert the public interest that the public agency was supposed to protect. This is particularly poignant when the impact of state failure and inefficiency, according to reform proponents, on the poor are examined. The promise of free water ultimately translates to no water for the poor. The failure of public utilities consequently condemns the poor to exploitative water vendors. References are made to studies that show the exorbitant cost of water in informal markets, which are presented as conclusive proof that the poor can pay for water. The private sector should therefore be given the incentive to provide water in more efficient manner and at competitive prices. Consequently, private sector participation and demand management approaches are promoted for being pro-poor in the long run and therefore imperative for governments committed to alleviating poverty.