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Water Privatization Controversy in Ghana Garners International Attention

April 23, 2002

Water Privatization Controversy in Ghana Garners International Attention

WASHINGTON, D.C. ? Representatives of?human rights groups, public health groups?and the British parliament will be in Ghana from April 28 to May 9 to study water privatization and cost recovery policies promoted by the International Monetary Fund (IMF) and the World Bank. The controversy in Ghana follows similar confrontations in Argentina, Bolivia, the Philippines and South Africa. It centers on whether water, a substance essential to life, should be viewed as a market commodity or a human right.

The 12-member delegation is sponsored by Public Citizen, Christian Aid-UK, Cordaid and Oxfam, Netherlands, in response to requests from local and international civil society organizations. Its objective is to conduct research and issue a report on the findings.

Before the trip, four members of the international delegation will meet with officials from the IMF, World Bank and United States government in Washington, D.C., from April 23-26. Activists in Ghana, many of whom are organized under the Ghana National Coalition Against the Privatisation of Water (National CAP of Water), are concerned that the privatization of water would place profit-making concerns above the serious need to expand access to clean and affordable water. Currently about 35 percent of the population lacks access to water services.

“It?s a growing trend to privatize public services like water, and Ghanaians have already seen huge rate increases,” said Wenonah Hauter, director of Public Citizen?s Critical Mass Energy and Environment Program, who will be a member of the delegation. “We are concerned about the growing trend toward privatization in the United States and want to see its impacts elsewhere.” Several recent Public Citizen reports have concluded that the end results of privatization contracts in the U.S. have been less than positive for consumers and local governments.

Water fees in Ghana increased by 95 percent in May 2001 due to IMF and World Bank policies, and new loan conditions could mean even more increases to bring prices up to a “market rate.”

“The current water tariff rates are already beyond the means of most of the population in Ghana,” says Rudolf Amenga-Etego of the National CAP of Water. “How will the population possibly be able to absorb a so-called ?market price? in the context of privatization?”

Proposals for automatic tariff adjustment formulas for water and electricity, pushed in IMF loan documents dated March 5, 2002, would mandate higher fees every time the domestic currency depreciates. Such formulas are often implemented to protect multinational corporations from changes in currency exchange rates.

Patrick Apoya, representative of the Community Pact for Health and Development, called the formulas “a deadly poison and a prescription for death for the poor.”

The IMF and the World Bank also have implemented cost recovery policies that remove public subsidies for water and increase consumer fees or tariffs until they cover the full cost of operation and maintenance of the water utility. Such policies commonly precede privatization to improve the financial standing of a public utility company prior to signing contracts with private sector operators. International donors, creditors and consultants have dominated the privatization decision-making process.

The delegates to Ghana are:

  Dr. Dyna Arhin-Tenkorang, senior economist for the World Health Organization?s Commission on Macroeconomics and Health. Part of the Center for International Development at Harvard University;

  Joseph Brenner, Program Director of Working Partnerships. Former assistant executive director of the AFL-CIO Central Labor Council in San Mateo County, United States;

  Josephine Elow, Community Outreach Coordinator, Seniors with Power United for Rights, New Orleans, United States;

  Dr. Yassine Fall, West Africa region program director, United Nation?s Development Fund for Women, and executive director of the African Association of Women for Research and Development (AAWORD). Leading advocate of women’s participation in economic development in Africa;

  Wenonah Hauter, director of Public Citizen?s Critical Mass Energy and Environment Program, anthropologist and expert on energy and regulatory issues;

  Mr. John Kidd, water engineer for Yorkshire Water, UK and chair of UNISON?s Water and Environment Service Group. UNISION is the largest union in the British water industry;

  Mr. Bert Roebert, former managing director of Amsterdam Water Company and board member of the SIMAVI World Water Fund;

  Dr. Ellen R. Shaffer, University of California, San Francisco. Member of the Governing Council of the American Public Health Association;

  Dr. Jenny Tong, British member of Parliament and International Development spokesperson for the Liberal Democrats. Participant in British delegations to Rwanda and the East African Great Lakes region;

  Robert Weissman, attorney and editor of U.S. magazine, Multinational Monitor. Expert on international corporate governance issues;

  Professor Alicia Yamin, Mailman School of Public Health, Columbia University, United States; and

  Bertram Zagema Environmental expert from the Netherlands.