Date Posted

Municipalities must change water funding models

Facebook
X
LinkedIn
WhatsApp
African cities and municipalities must overhaul how they finance and manage water projects, shifting from ad hoc funding to sustainable, multi-level partnerships. This was the key message conveyed by municipal sector players and financiers at the AU-Africa Water Investment Programme (AU-AIP) Water Summit 2025 in Cape Town, South Africa.

Multi-level government cooperation key to water sector growth in Africa

“When there’s a crisis… whether a pandemic, water scarcity, or any urgent issue… people go to their mayor’s door. That’s why multi-level governance is so critical.

“Providing water anywhere requires partnerships between all levels of government, the private sector, development banks and communities,” said Brand.

Brand stressed that water provision could not be separated from environmental protection, urging national governments and international bodies to recognise cities’ role in safeguarding wetlands and other ecosystems that underpin water systems.

She said municipal leaders now accept they cannot finance all infrastructure needs alone and must attract outside investment while ensuring projects deliver climate resilience and dignity for residents.

Poor governance at municipal level must be addressed

Ben Mokheseng, Head of Transacting for Municipalities and Waterboards at the Development Bank of Southern Africa (DBSA), said the bank allocates about a third of its loan book to local government and views municipalities as reliable partners when given tailored financial solutions.

He noted that while South Africa’s 257 municipalities are legally allowed to borrow from capital markets, large sums often go into general capital budgets rather than targeted water projects.

Historically, water has received less funding than sectors like transport and energy, even though water revenues frequently cross-subsidise other services.

Challenges he listed include:

  • unstable coalition governments,
  • poor governance,
  • technical skills shortages, and
  • significant water losses – with non-revenue water as high as 58% in some cases.