Abstract
This paper analyzes the expanded role of the private sector in the provision of water, sanitation, and hygiene (WASH) services in Africa. Since 2010, private capital has entered the WASH sector throughout the continent via innovative mechanisms such as municipal bonds and equity funds. The surge of capital has attempted to fill the $2.5 trillion annual investment gap that the United Nations (2014) estimates for key development sectors. A tension exists, however, between the private-sector-enabled provision of WASH services and key Sustainable Development Goals, particularly offering affordable water and ending chronic poverty. For example, the World Bank (2016) recently found that in countries that declare the right to “free” water, an underserved impoverished class often must pay a much higher price for water than the rich. The current analysis provides an empirical inquiry into the conditions under which the private sector is attracted to the provision of WASH services and estimates its subsequent impact on both economic growth and inclusive development.
Highlights
The current analysis provides an empirical inquiry into the conditions under which the private sector is attracted to the provision of WASH services and estimates its subsequent impact on both economic growth and inclusive development
The present research question addresses the impact of the private provision of WASH services on sustainable economic growth in Africa
They point out that 68 countries introduced private sector provisions, between 1990 and 2007. This context raises very important questions about the role of the private sector in providing WASH services. Is it efficient? Is it sustainable? Does it lead to inclusive development? The current analysis frames these questions by identifying the conditions under which private sector investment increases the provision of water and sanitation services in sub-Saharan Africa
Summary
The present research question addresses the impact of the private provision of WASH services on sustainable economic growth in Africa. It investigates the impact of private sector investment on water and sanitation services. The political economy of water, affects inequalities and chronic poverty around the world with dire impacts in sub-Saharan Africa Water faces both economic scarcity as well as resource scarcity. Wolf (2009) finds that increased access to clean water and sewerage can reduce the likelihood of contracting illness, enhancing productivity and alleviating poverty. Is it efficient? Is it sustainable? Does it lead to inclusive development? The current analysis frames these questions by identifying the conditions under which private sector investment increases the provision of water and sanitation services in sub-Saharan Africa
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