Picture: THINKSTOCK
Picture: THINKSTOCK

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THE country’s water predicament is a symptom of a much deeper crisis that goes well beyond the effects of the El Nino phenomenon and can be attended to only through a fundamental shift in economic governance.

The crisis is now spilling over to livelihoods, food production and health, affecting entire communities and pushing hundreds of thousands of citizens deeper into poverty. While appeals to save water through wiser use at the household level may be important, they risk missing what is really wrong with water governance in SA.

Many large corporations have eagerly bought into the "war on leaks" campaign. At a recent meeting on water stewardship in Sandton, managers presented the results of projects they have introduced to tackle leaks and spillages in poor communities, where the state of water infrastructure is abysmal and wastage more common.

What these companies failed to disclose, however, is the amount of water embedded in their own production processes and value chains, which is often the elephant in the room during water governance debates.

Take Eskom as an example. Our power utility is the largest single user of water in the country, because coal-burning power stations require large volumes of water to cool the plants. The more electricity Eskom produces to avoid load shedding, the more we face the prospect of water shedding.

The mining sector is equally responsible for the water crisis, with a number of river catchments irremediably compromised by acid mine drainage. It is not just the amount of water these companies use, but the cascade effect contamination has on basins and other primary water sources.

It is commercial agriculture, however, that is the largest consumer of fresh water in SA — about 60%, according to the Department of Water and Sanitation. In the past, several reports and investigations have highlighted the unacceptable wastage and even irregularities in water management by commercial agriculture corporations.

Even more striking is the concentration of such consumption.

In a country in which only 12% of landmass is considered arable and 3% is deemed fertile, most of our water is sucked away by fewer than 40,000 farmers (down from more than 60,000 during apartheid) to fill a few supermarket chains and reach a minority of consumers, while millions of South Africans remain undernourished.

In short, the water crisis confirms the deep inequalities generated by a skewed industrial model, out of balance with societal needs and natural equilibria.

Earlier this month, SA hosted two important international conferences presenting scientific research on the many ways in which nature contributes to society’s prosperity. The concept of "ecosystem services", which describes the direct gains humans derive from the free services provided by nature, from rainfall to pollination, is finally gaining traction.

Indeed, no economy can operate without nature’s inputs. Picture them as an iceberg: the tip is the formal economy (measured by gross domestic product, or GDP), while the gigantic mass under the surface is the natural contributions that make human production possible: a massive shadow economy, which we don’t account for. My colleagues have measured the value of ecosystem services loss due to land cover change and degradation in SA. The result is an astounding $186bn (about R2.6-trillion) a year in forfeited free services. This is more than half our country’s total GDP.

If we are seriously concerned about the water crisis, we must reject temporary fixes. We need to start reorganising our economy with a view to supporting a virtuous relationship between human productive activities and ecosystems.

The government must put ecosystems at the centre of economic planning. Water, in particular, must be mainstreamed through the various departments, from the national to the local level, so that every infrastructure investment in future is vetted against its effect on water systems.

City managers, urban planners and designers must also come on board to rethink an obsolete distribution system. It makes no sense to keep using precious potable water to flush toilets, wash clothes and irrigate gardens. Industrial policy will need a U-turn. Not only must our reliance on coal and oil be questioned, but also our plans to invest in shale gas and nuclear, two energy systems that exert a heavy toll on natural resources, especially water.

Business’s effect on water should also become a subject of public scrutiny, in line with new trends in the field of natural capital accounting. This should be a primary focus for investors because companies that do not take their ecological footprint seriously are unable to generate long-term returns.

Equally, consumers must be made aware of the natural capital embedded in the products they buy. Labels should indicate the effect on natural resources and, ultimately, prices should change accordingly (for instance, via higher taxation for less environmentally friendly produce).

During the Brics summit in Durban earlier this month, I was invited by the Department of Economic Development to speak at an event dedicated to "Wellbeing and Development in Africa", together with Nobel prize-winning economist Joseph Stiglitz.

We agreed that African policy makers need better indicators to formulate policies that are in line with sustainable development goals. The much-heralded GDP is unfit for the job, particularly as it does not attribute any value to natural inputs and contributes to separating the economy from nature in the eyes of governments, business and society.

We need an early-warning system to alert us when our economy goes off track and we need rewards for companies committed to integrating natural resource considerations in their business models, as well as sanctions for those unwilling to do so.

Ultimately, we need a plan to phase out an industrial model that is destroying us all with a view to designing an economic trajectory founded on human and ecosystem wellbeing. The upcoming climate summit in Paris is an opportunity for SA to show that it has learnt an important lesson from this water crisis.

• Fioramonti is director of the Centre for the Study of Governance Innovation at the University of Pretoria