Waterfall of opportunities: A number of improvements in distribution infrastructure are expected in the coming years

A large endowment of water has been both Nigeria’s blessing and its curse. A nationwide network of perennial and seasonal rivers, inland lakes, ponds and coastal lagoons allow for easy access to 267.3bn cu metres of surface water, complemented by over 51.9bn cu metres of groundwater resources, according to the Nigerian National Planning Commission. However, rapid urbanisation and population growth, exacerbated by mismanagement, have led to infrastructural deficiencies.

ROOM FOR IMPROVEMENT: The potential of Nigeria’s abundant water supplies remains untapped. In 2009 the National Technical Working Group on Water and Sanitation reported only 0.02% of Nigeria’s irrigation potential was being utilised, and of the 31bn cu metres of water in the country’s dams, only 18% was used effectively. Moreover, the distribution of improved drinking water to households in Nigeria is among the lowest in the world. Estimates released by the UNICEF/WHO Joint Monitoring Programme for Water Supply and Sanitation suggested only 58% had access to safe drinking water in 2010. Similarly, of the total urban and rural coverage, only 4% of water was piped into premises, 54% collected through other improved sources, 28% from unimproved supplies and 14% from surface water.

Clean water is in short, sporadic supply, and untreated water runs risk of waterborne parasites, with cholera, polio and typhoid outbreaks regularly reported. Nigeria is one of the four remaining countries with the easily preventable endemic of Guinea worm disease. Limited basic disease prevention knowledge has prompted donor and external agencies to offer education sessions to local communities to raise awareness.

The issues are most pressing in urban areas, which suffer from a lack of planning and overcrowding. “Current water demand in Lagos State stands at 540m gallons per day (mgd), whereas only 210 mgd is produced, with the gap currently closed by the informal sector by means of sachets, boreholes, push carts, jerry cans and tankers,” Shayo Holloway, group managing director of the Lagos Water Corporation (LWC), told OBG.

Thus far, development initiatives have been most effective in increasing the exploitation of groundwater supplies, and more than 3% of the population each year has gained access to wells and boreholes, making this the fastest-growing source of water supplies, according to the World Bank. On occasion, boreholes creation forms part of international initiatives, with China agreeing to help drill some 598 in Abuja in 2005.

WORK UNDER WAY: Much effort is being put into alleviating potable water scarcity, in line with the UNs’ Millennium Development Goals (MDGs). Nigeria has made modest progress in developing a national framework, with the sanctioning of water basin agencies and water-user management. The Vision 20:2020 details resource allocation and socio-economic developments targets for sanitation and water in line with the MDGs.

Responsibility for water supply and sanitation is split between federal, state and local government. The federal government sustains and controls a network of reservoirs dams through 12 river basins development authorities, opening the sluices for raw water at agreed rates of charge. Water corporations or boards at the state level procure this water for irrigational use or to be made drinkable, primarily in urban areas. Local government, for the most part, takes responsibility for the provision of drinking water to rural communities, and is increasingly reliant on deep groundwater projects, which are often supported by development partners.

As such, the African Development Bank recently injected some $88.32m into ongoing rural water and sanitation sub-programmes in Yobe and Osun States, and the World Bank pledged its support to the federal government’s programme on water transformation aimed at nationwide reform and infrastructure development by contributing $400m in September 2012.

FINANCING: The total allocation to the Federal Ministry of Water Resources in 2012 equalled N17.17bn ($109.88m). Of this, N15.39bn ($98.49m) was earmarked as total capital expenditure for the purchase of equipment and ongoing projects. Notable projects include the Kano River irrigation project valued at around N252m ($1.61m), the construction of the Kashimbilla Dam in Taraba at a cost of N1.8bn ($11.52m), the rehabilitation of the Lower Anambra irrigation project, valued at N43m ($275,200), and the Port Harcourt water supply project at a cost of N140m ($896,000).

PRIVATE SECTOR INVOLVEMENT: Emphasis on encouraging public-private partnerships seeks to create a commercial, demand-driven model. To increase direct investment and to improve operational and commercial viability, support from donors has been sought alongside infrastructure investments, with the hope of creating an environment favourable for stakeholders and consumers alike. Successful experiences with private sector participation programmes (PSPs) in utility management as well as rapidly mounting pressure on the city’s deficient water management infrastructure, has put Lagos State at the forefront of private sector involvement. “The forecast on population growth, driving up current demand from the 540 mgd to 733 mgd by 2020, requires a master plan for the expansion of capacity. Attracting the right investment is paramount, and Lagos State, in particular, is in dire need of consistent water supplies,” Holloway told OBG.

The move to private sector water management started in 2007 with the establishment of the federal water sector regulator, Nigeria Integrated Water Resources Management Commission. Results have materialised. The rapid expansion of the Lekki corridor has led to the 2010 tendering of the Odomola Water Scheme, set to supply 210 mgd of potable water to both the Lekki Free Zone and the surrounding residential areas. The Lagos State Water Regulatory Commission, a state-level regulatory body, was also unveiled in September 2012, which should lead to further transparency and accountability for operators and customers, encouraging private sector engagement.

GOOD NEWS: The LWC plans to utilise all four rivers coming into Lagos State to increase water treatment capacity. Once river capacity is saturated, the focus will be on Lagos Lagoon’s abundant supplies. Holloway told OBG, “After full completion of the master plan, 20% of supplies will come from groundwater and 80% from surface sources.” One challenge that Holloway recognised is residents’ reluctance to pay for what is generally considered to be a public service. He said, “The rhetoric on Nigeria’s water access means it is viewed as a basic human right, and not a commercial opportunity. As a result, introducing adequate pricing is troublesome.”

Besides power, regular, sanitised water supplies are the second biggest requirement for raising Nigeria’s standard of living. While endowed with abundant fresh water supplies, treatment and transportation infrastructure, in many cases, needs to be built from the ground up. In line with its ongoing policy of liberalisation of utility management, state and federal policymakers are eying the private sector for much needed investment and management skills. And while obstacles will remain for some time, investors can be guaranteed of one critical element: the market for water consumption is not only sizeable, it is rapidly growing.