||Ghana is a country in West Africa, populated by about 20 million
people. The country has experienced colonial domination
from different European powers, including the Dutch,
Portuguese, Danes, Germans and British, who plundered the
wealth of the nation (gold, timber and people). The colonial
name the Gold Coast was replaced by the name Ghana after
the country became independent from Britain in 1957 and
became a republic in 1960.
The provision of essential services in the then Gold Coast
was to meet the needs of the colonial administrators and their
priests who lived in fortified castles and forts, mainly in coastal
towns. Cape Coast, the seat of the colonial government, was
the first place to get potable water in 1928. After meeting the
demands of the colonialists, water was extended to the auxiliary
staff of the colonial administration. It was only after satisfying
these classes of people that the administration extended
water to the public in the form of communal ¡°stand pipes¡±,
out-door taps located mostly in public spaces such as schools,
hospitals and market squares. When the nationalist government
assumed power in 1957, in a bid to fulfil the demands of
self-rule, they created a Water Supply body under the Ministry
of Works and Housing in 1958.
In 1965, parliament created Ghana Water and Sewerage
Corporation (GWSC) as a legal, public entity charged with
responsibility for providing and managing water resources.
This move was not unusual; most newly-independent countries
Reclaiming Public Water 139
donors to strengthen GWSC¡¯s managerial and financial capacity
through World Bank¡¯s financial support (Project Credit
1342GH). Ghana supplied Thames with $13,5 million through
a World Bank loan. There are similar packages that were carried
through up till 1997. At the end of the day the restructuring
failed to deliver potable water to Ghanaians and the corporation
was running into crisis.
The collapse of phase 1 of the neoclassical Structural
Adjustment Programme (SAP) gave way to further and harsher
economic models. Phase 2 meant massive deregulation with
the focus on transferring public resources to private purses. In
1993, the NDC government accepted the World Bank¡¯s recommendation
to restructure the water sector in preparation for
privatisation, a process which worsened the plight of rural people,
who face the toughest water burden, because the government
relinquished responsibility for providing them with water
and gave the responsibility to under-funded local authorities
and unreliable philanthropists. Seeking to sell GWSC, the
NDC government went into negotiations with the private
water company Azurix (a subsidiary of Enron). There were a
lot of clouds hanging over the deal with Azurix and it was later
alleged that a minister accepted a bribe of $5 million from
Azurix in 1995. The government could not push through the
Private Sector Participation (PSP) deal in 1996 since it was an
election year and publicity of the bribery scandal would be
detrimental to their campaign.
After winning the elections in 1996, the NDC government
continued preparing the ground for water privatisation and the
Water Resources Commission oversaw the giving of water
rights and permits, opening the floodgates for selling water
bodies to private companies and individuals. In 1999, the government
incorporated Ghana Water Company Limited
(GWCL) as a public, limited liability company, and it assumed
Reclaiming Public Water 141 140 Reclaiming Public Water
were undertaking state-led development. This arrangement
created a massive, centralised bureaucratic institution, which
made it next to impossible for decision-making at regional
level, much less district and unit levels, and state bureaucracy
had its own setbacks due to alienation of the general populace
from effective participation in policy making.
In order to overcome these challenges, the state and its major
donors thought it best to decentralise some of GWSC¡¯s operations.
The donors, particularly the World Bank, were guided by
neoclassical economic school of thought and saw decentralisation
as a step towards minimising the government¡¯s expenditure
and influence over water provision. The decentralisation took
place from 1970 to 1985, but the results did not match the targets.
The political landscape also contributed to the alienation
of the services from the consumers. The military dominated
political power and decision-making processes, crowding out
citizen participation. The military junta (PNDC) dominated the
political scene from 1981 to 1992, when it catapulted itself into
a political party (National Democratic Party-NDC) led by J.J.
Rawlings, and won the elections from 1992 to 2000. Not only
did PNDC and NDC crowd out citizens¡¯ voices, but they followed
the economic agendas laid down by the World Bank and
IMF to the letter.1 Ghana¡¯s economy was celebrated by the IMF
and World Bank as a model, yet, the reign of this military junta
brought about unbridled corruption in the public sector.
This corruption engulfed GWSC, as the corporation was
restructured purposely for fiscal policies, which meant the
sacking of 2000 workers from 1990-93. The private water company
Thames (UK) was contracted by the government and
1 The PNDC/NDC instituted the IMF and World Bank¡¯s Economic Recovery
Programme (ERP) and Structural Adjustment Programme (SAP).
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not scare them. The smear campaign was masterminded by the
water sector restructuring secretariat, an outfit sponsored by
the World Bank and the UK development agency the
Department for International Development (DFID).
A principle argument in support of the privatisation of
GWCL was that there would be more money for the utility
after implementation of the project, but this argument is
flawed. There was an initial promise of $500 million from
international donors which would be made available for the
company to borrow at no interest. The final two private water
companies who will win the bids are obliged to contribute $70
million each for each business unit. This amount was challenged
and the amount was dropped to $30 million. Soon after
the private companies refused to inject even these small
amounts into GWCL, citing currency devaluation, political
instability after the September 11 attacks and war conflicts in
the West African sub-region that make investment unattractive.
According to the World Bank, on offer at the time of writing
is a three-year service contract rolled into a five-year lease
contract, by which time there will be less political and financial
risk in the sub-region. In essence, all risks are offloaded onto
the public and all profits to the private operator.3 GWCL¡¯s
existing debt will be cleared and the private water corporations
are not required to make any significant investments.4
Additionally, the foreign company is allowed to repatriate
3 According to the new management service contract, 42 months after operation
of the service contract, the operator could be served six months¡¯ notice for the termination
of contract when it is realised out right lease is possible. Reading in between the
lines, the contract document says that 42 months after using public money to clear the
debt of GWCL, the contract would be transformed into ¡°Lease¡±.
4 This became clear at a meeting to inspect the bid document. The private companies
asked if they were expected to service the debt of GWCL and Alex McPhail of
the World Bank said only a deposit of $500,000 as working capital was required and
would be fully refundable at the end of the contract (p5 of contract document). Even
the World Bank¡¯s Fact Sheet on the Management Contract says the company is not
required to invest in or expand the water sector.
responsibility for 100 relatively larger urban potable water supply
systems. Under the privatisation process, the 100 systems
were reclassified into 69 systems and packaged into two business
units to be sold to two separate companies. The business
units were supposed to be leased out for 10 to 25 years.
A wave of opposition to the neo-liberal policies in 1995 -
dubbed ¡°Kume Preko¡± - resisted the moves of the NDC to
liberalise the economy. Mass demonstrations were held and the
state responded by killing four of the demonstrators. At the
forefront of the demonstrators were the leadership of the then
biggest opposition party, NPP (New Patriotic Party). This
party later became the ruling government, after which it
changed course and also started promoting privatisation.2
In 2001 a national water stakeholders¡¯ workshop was organised
by the Integrated Social Development Centre in the capital,
Accra, to look at the pros and cons of PSP. At the end of the
workshop, the PSP plan which was previously shelved by the
NDC, but now being re-invigorated by the new government of
NPP led by John Kufour, was seen as a proposal that would
not deliver water to all, especially the poor. A declaration was
signed and the signatories formed the National Coalition
Against Privatisation of Water (NCAP).
The coalition membership cuts across civil institutions in
the country; Organised labour, students, communities and
NGOs are all involved. Since the start of the campaign, the
government has come down heavily on members, calling them
terrorists and un-patriotic among other names. Newspaper
advertisements by the government to tarnish its reputation did
2 One of the leading members of the NPP, Kan Dapaah, wrote in a national daily
¡°In Defence of GWSC: Stop the butchering.¡± (Daily Graphic, August 4, 1999, p7). His
article was very critical of the privatisation process but Dapaah is now a minister who
supports Private Sector Participation.
Reclaiming Public Water 145
100% of the profits and has no obligation to re-invest in
GWCL. Therefore, whether the reform is a success or a failure,
the private operator will make a profit, while the Ghanaian
government will be deeper in debt.
Mr. Lamptey, managing director of GWCL, has estimated
the company requires US$100 million per annum to provide
safe water on a sustainable basis. Currently, GWCL has a budget
of only $45 million. With the onset of the management contract,
it will have a budget of $135-145 million over a five year
period. Therefore, there will be a significant de-investment in
GWCL, as it will be running on a budget of only $27-29 million
per annum within the Private Sector Participation (PSP)
framework. The de-investment in GWCL of about $17 million
per annum is bound to cause far-reaching damage to the water
sector. In order to raise the necessary funds to keep GWCL
functional, the private operator will not provide the capital, but
rather potable water consumers will bear the cost in increased
tariffs. The government and the donors are finding it difficult
to tell the public that the private water companies, previously
presented as strategic investors, are in fact strategic managers.
The World Bank, meanwhile, has embarked on a new strategy
to gain the support of tribal chiefs in order to win over
Ghanaian citizens to PSP. World Bank President Wolfensohn
has pledged a $30 million loan to an Ashanti chief to enable
him to provide water and sanitation services to some communities
in the country. This is despite the fact that the chief has
no previous experience in water and sanitation and is not democratically
accountable to anyone.
Ever since government and donors (backed by NGOs like
WaterAid) have pushed hard to sell GWCL to Suez, Veolia or
Biwater, investment in GWCL has dwindled. Rampant water
shortages are the norm and private water vendors are cashing
in on this situation by drawing water from filling points with
144 Reclaiming Public Water
trucks and selling it at 600% of the original price, which is
unaffordable for most consumers. Worst affected are rural
areas. There has also been a surge in guinea worm infection, a
debilitating water-borne disease. Ghana has the second highest
rate of guinea cases even though it was almost eradicated 10
SAVELUGU: THE CASE FOR PUBLIC INVESTMENT AND CONTROL
It has been demonstrated that community control of water
resources is feasible by a guinea-worm infested community
called Savelugu in northern Ghana. Savelugu is a small town
whose inhabitants are basically farmers and middle men and
women who sell farm produce. It is also in one of districts
where guinea worm is most endemic. Savelugu, with a population
of 20,000, had 600 cases of guinea infection, the highest in
the country. Out of necessity, this community has been able to
develop a water distribution model based on citizens taking
control of their water and has been celebrated by local water
activists, water service providers and international activists alike.
The achievements in Savelugu were possible due to the injection
of funds and human resources from central government
represented by GWCL, and international NGOs (UNICEF,
GLOBAL 2000, World Vision). These organisations, in collaboration
with the community, approached GWCL to sell water in
bulk to the community who will then distribute it.
By taking over distribution, the community is able to drastically
reduce unaccounted for water, set lower tariff rates and
also do routine maintenance and some expansion of connections.
5 Tariff setting is undertaken by the community water
5 For any amount of water supplied, the water board allows up to five percent
losses at the fetching points. Thus, water committees account for up to 95% of water
supplied to their respective sections.
Current international economic trends, however, result in public
institutions being short of funds and undermined. This is a
great danger to the success of initiatives like that of Savelugu.
The general crisis of Ghana urban water, created by lack of
investment and the privatisation preparation processes, now
also impacts on the performance of the Savelugu scheme.
GWCL in Tamale, the main supplier of bulk potable water to
Savelugu, has begun rationing its water which has drastically
affected Savelugu. The lesson here is that you cannot guarantee
a successful performance of an enclave in the midst of crisis.
The issue of delivering water for all should always be seen
in a wider context. There should be a common policy and purpose.
The private corporations have recognised this and are
trying feverishly to institute a global water policy geared
towards privatisation. What we have to do is to fight to consolidate
public funding and control of water resources and management.
This will ensure cross-fertilisation of ideas and
resources for the common good.
Al-Hassan Adam is with the National Coalition Against Water Privatisation
Reclaiming Public Water 147 146 Reclaiming Public Water
board and tariffs are cross-subsidised so water is affordable
even for the poor and the elderly. At the time of writing, cases
of guinea worm are virtually unknown in Savelugu. Access to
potable water has increased to 74,4%, compared to the national
average of 36% access for the rural population.6
How can this model be replicated in other parts of the
country and the world at large? First, there must be public
investment in the huge capital outlay associated with water
infrastructure development. The community cannot mobilise
the investment required upfront for these types of projects on
its own. The community should be given the mandate to take
full control of the utility and its water distribution, with capacity
building in project management and monitoring. Part of
this should include how to recruit skilful technicians, preferably
residents or others who have a sense of community development.
The main task of water production should be the
responsibility of a bigger public institution. In the case of
Ghana this should be GWCL.
The sustainability of such public schemes is assured when
there are public funds available to support them. Also, the
recognition that consumers and community members can
make a meaningful contribution towards management of utilities
and the demystification of decision making in the utilities
is important. Consumers and community involvement guard
against mistrust and help build public confidence in management.
Acrimony associated with tariff collection would not
arise if consumers and the community were involved.