Africa’s Water Shortages Highlight Financial System Issues

The African Union’s 39th Ordinary Session is scheduled to take place in Addis Ababa, Ethiopia, on February 14–15. The summit’s theme is “Assuring Sustainable Water Availability and Safe Sanitation Systems to Achieve the Goals of Agenda 2063,” the African Union’s flagship development blueprint.

The African Forum and Network on Debt and Development (AFRODAD) asserts that Africa’s escalating water crisis is linked to fundamental flaws within the global financial system, rather than solely to climate change or service delivery issues.

Water Insecurity and its Impact

Water plays a crucial role in Africa’s development, supporting food security, public health, energy generation, and economic productivity. Agriculture, a significant sector employing over half of Africa’s population, is particularly reliant on consistent water access. As of 2020, approximately 411 million Africans lacked access to basic drinking water, with over 387 million residing in sub-Saharan Africa. Climate change, characterized by rising temperatures, erratic rainfall, droughts, and floods, is exacerbating the strain on existing systems. Projections indicate that by 2050, Africa’s urban population will reach 1.4 billion, with 162 million urban residents facing chronic water shortages.

Debt Burden and Financial Constraints

AFRODAD connects the water crisis directly to Africa’s increasing debt burden. While Africa represents only 1.9% of global public debt, governments allocate an average of 18.7% of public revenue to debt servicing. External debt repayments are projected to reach $90 billion in 2026. Public debt across the continent currently stands at approximately $2.1 trillion, exceeding 60% of GDP, with 21 countries either in or at high risk of debt distress.

High borrowing costs further complicate the situation. African countries face average interest rates of 9.1%, compared to 6.5% in Latin America and 4.7% in Asia. AFRODAD attributes these disparities to structural biases in global credit rating systems and dollar-dominated capital markets. The organization notes that every dollar allocated to debt servicing is a dollar unavailable for essential infrastructure like water pipes, sanitation systems, and irrigation schemes.

Policy Recommendations and Calls for Reform

AFRODAD advocates for African heads of state, finance ministers, and development partners to take specific actions. These include championing a United Nations Framework Convention on Sovereign Debt, expanding concessional and grant-based financing for water and climate adaptation, and reforming global credit rating systems to eliminate structural bias. Protecting water and sanitation budgets from austerity-driven cuts and strengthening equitable domestic resource mobilization strategies are also prioritized.

Experts like Lavender Namdiero of African Futures Lab emphasize the need for reparative justice through transforming financial risk governance. Frank Adu, a senior researcher at the African Center for Economic Transformation, highlights that the debt crisis reflects systemic imbalances shifting risk onto vulnerable nations. Theophilus Yungong, interim executive director of AFRODAD, underscores the inextricable link between debt justice and water justice.

Looking Ahead: Reparations and Sustainable Development Goals

As Africa enters the Africa Decade of Reparations (2026–2036), AFRODAD believes reforming the global financial system is crucial for achieving Agenda 2063 and Sustainable Development Goal 6 on clean water and sanitation. The organization views the 39th African Union Assembly as a pivotal opportunity to address the interconnected crises of water, climate change, and debt, and to commit to reforms that prioritize Africa’s development and dignity within the global financial order.