14 June 2010

Namibia: Government Moves Closer to Subsidising Water for the Poor

A GROUP of experts has presented findings on possible future subsidisation of water tariffs for poor households, a plan that was mulled some three years ago.

Although thousands of water points have been set up in rural areas, many households had their taps disconnected because they couldn't afford to pay for the water they and their livestock consumed.

Burgert Gildenhuys last week presented the findings of his team and showed that according to statistics Namibia had 221 061 rural households of which 84 420 households are regarded as poor.

The highest number of poor households is in the Kavango and Ohangwena regions. Both regions have about 16 000 poor households.

Subsidising the over 84 000 households could cost the taxpayer up to N$28,7 million a year.

However, a subsidy system, which would include annual registration of such households and the numbers of their livestock, would become "institutionally so complicated and costly that successful implementation is compromised," Gildenhuys wrote in the study.

About 56 per cent of water used in Namibia is drawn from dams, rivers and so-called unconventional sources while the remaining 44 per cent is abstracted from groundwater sources, according to resource analysts.

The study recommended that if rural communities are not able to maintain or operate water supply systems on a sustainable basis, the services can be outsourced to SMEs or NGOs, as part of an agreement between the government, community and technical support service provider.

Such an arrangement is expected to improve the situation and contribute to improved cost recovery and service delivery.

Since there is a great variation in conditions and income levels throughout Namibia, the experts recommended that a system for the individual assessment of the need for rebates, cross-subsidies and subsidies be worked out.

"Affordability of services by the community, integrated with cost recovery, should constitute a key principle and be adhered to," the study recommended.

At the same time, turning off water supply to a water point or branch line to enforce cost recovery should not be used.

Opening the workshop, Agriculture Minister John Mutorwa said the envisaged water supply subsidy scheme should "guarantee sustainability of water supply services and accessibility of potable water to households which cannot afford to contribute towards the full cost of water supply services."

However, cost recovery of water tariffs was also important, Mutorwa said.

Back in November 2007, the former Minister of Agriculture, Dr Nickey Iyambo, told reporters that water costs might be subsidised by Government for poor Namibians in urban and rural areas once the third National Development Plan (NDP3) was implemented.

Speaking then at a consultative conference on the NDP3, Iyambo said his Ministry had recommended that N$30 million a year be allocated to subsidise water payments for poor people living in the informal areas of proclaimed villages and towns.

"Another recommendation is to subsidise the cost of water with N$80 million in unproclaimed (rural) areas of the country each year, coming to N$400 million during the entire NDP3 period between 2008 to 2012.

However, the Ministry did not have the money, but wanted to hold an investor conference after the NDP 3 was finalised," Iyambo said in 2007. To date this has not happened.

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