Economic woes linked to low investment in water, State told

Residents of Nyang'oma village in Siaya County look at pressure water pushing out to waste from it's source at river Yala on September 28,2016. The water pipes that supply the area in Siaya burst and  if not rectified soon will force residents of Siaya town to go without the commodity. (PHOTO: Denish Ochieng/ Standard)

Experts have termed the current rise in the cost of basic food items, water rationing and a hike in the cost of power self-inflicted.

Infrastructure experts at Deloitte and Touché said the high living expenses are due to years of under-investment in water infrastructure by the Government.

Kenya and its peers in the region, they said, have over time made negligible investments in water projects and instead opted to invest in infrastructure, energy plants, roads and railways.

Nairobi Water and Sewerage Company began rationing water to thousands of households towards the end of last year while the cost of electricity is set to go up due to low water levels at the different dams used for supply of water and electricity generation.

MAIZE EXPORTS

The cost of living has risen for nine consecutive months to January, with the Government planning to import maize from Mexico while it has also banned maize exports.

All these have been attributed to the prolonged dry weather. While droughts are not unique to Africa, other regions are able to experience stable cost of living and access to basics such as water and power due to investment in water infrastructure over time.

Infrastructure and Capital Projects Leader at Deloitte Africa John Labuschagne said low financing in water projects has emerged as a major concern across Africa, with the need for investment in this sector far-outstripping the actual investment.

“Water is essential for agriculture. It is also critical for energy production and hence, there is not enough water in the dams to generate electricity,” said Mr Labuschagne.

He spoke yesterday in Nairobi when Deloitte launched its Africa Construction Trends Report.

“So countries end up diverting funds from other projects so that they can, for instance, import electricity.”

Mr Labuschagne said the water sector was a low priority area compared to other sectors such as transport, energy and power, which are seen to offer a high return on investments.

“If African governments hope to diversify their economies and move up the global value chain, large-scale investments in water access and related infrastructure projects are required,” he said.

According to the report, China continues its dominance in East Africa’s mega projects in terms of financing and implementing.

Different Chinese institutions are financing 23.3 per cent of all projects being implemented in the region, which is marched by Africa Development Finance Institutions (23.3 per cent) like the African Development Bank (AfDB).

Besides financing, the Chinese are also the “most visible builders”, developing 41.9 per cent of all projects in East Africa.

 The report noted that there was a decline in the number of mega projects that African countries are implementing as governments resort to austerity measures.

The report looks at projects valued at over $50 million (Sh5.1 billion) that had broken ground as of June 1, 2016.

“Spending on major infrastructure projects in 2016 dropped by $51 billion (Sh5.2 billion) to $324 billion (Sh33 trillion) following tough global macroeconomic conditions, resulting in lower growth forecasts, partly attributable to the slump in commodity prices.

“Construction projects (valued at over $50 million) stood at 286 in 2016 compared to 301 recorded in the previous year. Of these, East Africa contributed 43 projects valued at $27.4 billion (Sh2.8 billion), a 52 per cent drop from 2015.”

The decline in projects in the region was as a result of Tanzania suspending its Bagamoyo Port Project (worth $11 billion) as the new administration sought to manage spending.