"Ghanaians may take to the streets in much the same way Bolivians did early this year, to block the privatisation of their water supplies. "
"South Africa's Anti-Privatisation Forum, a collective of community based organisations and labour unions, embarked on a two-day strike Wednesday to protest privatisation of local government services, including water."
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By Gumisai Mutume WASHINGTON, Nov 15 (IPS) - As of next year, taps in Ghana's urban areas may start pouring out precious, private waters if the World Bank approves a project to fund an ongoing privatisation programme. Ghana's Water Sector Restructuring Project should have been approved by the Bank's Board of Directors this year, but has been deferred, possibly to early next year. Ghanaian activist, Rudolf Amenga-Etego who was in Washington recently highlighting the implications of having the poor pay “market rate tariffs” says civil society will resist the project. Amenga-Etego foresees a situation where Ghanaians may take to the streets in much the same way Bolivians did early this year, to block the privatisation of their water supplies. “Where cost-recovery becomes the underlying policy, water will become unaffordable for many poor people in Ghana,” says Amenga-Etego of the non-governmental Integrated Social Development Centre (ISODEC). “Even before the project kicks off, taps are being turned off because a growing number of families cannot afford to pay.” The Ghana Water Sector Restructuring Project is estimated to cost 285 million dollars and the World Bank's International Development Agency (IDA) is expected to provide 60 million dollars of this. The World Bank has been pushing decentralisation in Ghana since 1988, seeking to devolve powers from central to district governments as part of cost-saving measures. Under the programme, the provision of water through the Ghana Water and Sewage Corporation is split between the profitable urban sector and an unprofitable rural sector. The profitable sector would be run by a downsized Ghana Water Company to eventually be contracted to private sector corporations. The Community Water Supply Agency has already taken over the unprofitable section. This is financed by the Community Water and Sanitation Project approved last year in August by the Bank. The Bank agreed to provide a 25 million dollar loan to the project. The entire cost of this part of the programme is estimated at 80 million dollars. But Amenga-Etego says the urban sector has been subsidising the rural sector and privatisation would mean that this cushion would fall away for the poorest section. In the urban areas, tariff increases will be phased in until full cost recovery is achieved, notes the project document, and the number of employees at the Ghana Water Company reduced in order to make the company profitable. The Bank says the rural water project intends to make water provision “demand driven” and communities would decide whether or not they want to participate. They would have to make a five to 10 percent contribution for capital costs and then pay normal operating costs thereafter. Figures from the Government of Ghana show that only 36 percent of the rural population have access to safe water and 11 percent have adequate sanitation. Water is also scarce in urban areas such as the capital, Accra. In typical working class areas of Accra such as Medina, it would cost a family 3,000 cedis to use 10 buckets of water a day. Yet, the minimum wage per day is 7,000 cedis. One dollar exchanges for 7,000 cedis. The Bank and the Government of Ghana however consider these tariffs as below the market rate. What Ghana is facing has confronted many countries before. April witnessed the culmination of violent protests in Bolivia, following the privatisation of the water supply in the city of Cochabamba and the raising of tariffs by as much as 200 percent. South Africa's Anti-Privatisation Forum, a collective of community based organisations and labour unions, embarked on a two-day strike Wednesday to protest privatisation of local government services, including water. The Ghanaian government is hard-pressed to find revenue having suffered from a severe terms-of-trade shock last year. World prices for Ghana's two principal exports, cocoa and gold, fell by more than 30 percent and five percent, respectively, and the world price of petroleum roughly doubled. The Bretton Woods institutions have, however, expressed general satisfaction with the pace of structural adjustment in the west African nation. Eduardo Aninat, deputy managing director of the International Monetary Fund (IMF) recently noted that there has been “an acceleration of the privatisation programme” and this would “help reduce domestic debt accumulation and the fiscal burden of interest payments”. “However, the review of the second annual adjustment programme has highlighted the need to continue fiscal restraint by controlling expenditure. Fiscal discipline will be pursued and wage increases will be held in line with productivity, especially in this election year,” Aninat noted, following a recent review of the countries adjustment programme. Sara Grusky of the Globalisation Challenge Initiative in Washington, however, says it is important to understand that the most significant pressure to privatise usually does not come from specific projects, but rather from conditions such as performance criteria and structural benchmarks attached to IMF and Bank loans. “The IMF does not have water privatisation as the binding performance criteria attached to its current Poverty Reduction and Growth Facility (PRGF) loan to Ghana,” notes Grusky, but the country is bound by a plethora of other conditions. For instance, the Bank's Country Assistance Strategy for Ghana requires expanded private sector participation in infrastructure in the areas of power, urban water, rail and ports. The country's Poverty Reduction Strategy Paper - the new policy framework guiding the institutions' lending to poor countries - also requires the divestment of urban water systems to private sector operators. Ghana is also required to open up its only domestic oil refinery, its telecommunications provider and the Electricity Company of Ghana to the private sector. If Ghana does not meet performance criteria set out in loan conditions, the institutions can hold back on disbursements of funds. (END/IPS/IF/DV/gm/da/00)
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