Selling Zambia?s Water: Unveiling Privatization in Lusaka

Selling Zambia’s Water: Unveiling Privatization in Lusaka

Karen Cocq, Polaris Institute in Ottawa, Canada

In 1991, a newly elected government in Zambia began implementing a Structural Adjustment Program (SAP) of the International Monetary Fund (IMF) that dictated cuts to social spending, public sector reform, market liberalization and extensive privatization of state-owned enterprises.

In the water sector, this led to the adoption of full cost recovery and the "commercialization" of all municipal water utilities. These changes were supposed to make the sector more "efficient" and financially sustainable, but the results have been mediocre at best: Lusaka’s water utility remains desperately short of working capital to make significant improvements to the system and few of the city’s poorest residents, 56% of whom were still lacking clean water in 2001, have seen changes for the better while many more have been disconnected because they are unable to pay increasing tariffs.

The commercialization process, which effectively pulled water service delivery to the periphery of the public domain, appears to have opened the way for privatization. Severn-Trent Water International Plc (UK) recently completed a study, funded by the World Bank, on privatization options for Lusaka. Only a handful of government representatives were involved, including the ministries of Finance and Trade and the state’s privatization arm, and absolutely no public consultation was done. The results of this secretive process – which has pre-empted any public opposition – are yet to be disclosed, but it is probable that a lease or concession contract will be recommended, and the most likely bidders could include Suez, Vivendi, and SAUR.

Read more in "Neo-liberal reform and cost recovery: Paving the way for privatization in water supply in Lusaka, Zambia" published by the Municipal Services Project (MSP).