The Impact of the Global Financial Crisis on Financial Flows to the Water Sector in Sub-Saharan Africa

Report English Published: November 2010

The omnipresent nature of the global financial crisis led us at SIWI to question the impact of the crisis on financial flows to the water sector, focusing our attention on Sub-Saharan Africa. In this report we unpack how the water sector is presently financed and then trace the impact of the crisis on these financial flows.

Key Lessons learned

– The generally low level of investment finance to the water sector will continue to hamper growth.
– The economic impacts of the crisis in SSA are temporary.
– A significant proportion of the SSA’s financial flows in the water sector rely on public sector finance.
– The financial impacts of the crisis on the water sector in SSA are limited.
– Non-OECD financial flows have played an important role in keeping SSA economies vibrant.
– The impact of the crisis on financial flows to irrigation and hydro-electric power projects has been limited.
– The impact of the crisis on financial flows to Supply and Sanitation (WSS) has been limited.
– ODA from OECD countries may fall as a result of the financial crisis.
– The water sector in low income and low income fragile countries remain vulnerable to the crisis.

Summary

The purpose of this report is to provide an analysis of the impact of the global financial crisis (“the crisis”) on financial flows to the water sector in Sub-Saharan Africa (SSA). To gain an insight into the impact requiries first of all an understanding of how the water sector is financed and then the extent to which these financing resources are impacted by the crisis.

The paper assesses the impacts of the crisis in the following three water sub-sectors: water supply and sanitation (WSS), irrigation and hydro electric power. Financial flows from the public sector, Official Development Assistance (ODA), non-OECD countries (such as China); private sector capital; and household/farmer self-finance are analyzed.

This report complements a 2009 report by the Stockholm International Water Institute on the impact of the financial crisis on the water sector prepared for the Swedish International Development Agency (Sida).

How to Cite: Joyce, J., Granit, J., Frot, E., Hall, D., Haarmeyer, D., Lindström, A. The Impact of the Global Financial Crisis on Financial Flows to the Water Sector in Sub-Saharan Africa. Report 28. SIWI, 2010.