Nigeria - Water - Impact on Lagos water of WB privatisation plans, union response

Authors: 
David Hall
Date published: 
Jul 2010

Policies in the water sector in Nigeria have been constrained by the international financial institutions and donors. A series of projects from the late 1990s, all effectively required some form of  privatisation. The biggest of these concerned Lagos, the largest city in Africa, with a population forecast to rise to 23m. by the year 2015, when it will be the 3rd largest city in the world (after Tokyo and Bombay). The Lagos State Water Company (LWSC), has ageing supply lines, water works and poor electricity supply. Only about 4million of the state’s 15million population have access to piped water, others are supplied by private tankers, water carts, boreholes and wells.

In 1999, the World Bank’s private sector arm, the International Finance Corporation (IFC), developed a proposal which “required the Lagos state government to seek private sector operators for the operation of its water utility” (at the same time, the IFC was also pushing through the privatisation of the national airline, and the Lagos State government was agreeing a corrupt power project with Enron). Privatisation was expected to reduce the cost of water, enable investment, and improve public health and economic growth.  The privatisation was seen as opening a larger market for contracts elsewhere in the country over the next few years. The British government sent a 14 person delegation in February 2002, and Thames Water, Severn Trent, Veolia and Suez prequalified as bidders. But later that year the multinationals decided on a global withdrawal from developing countries, and so the entire World Bank/IFC plan for Lagos became pointless. Nevertheless, in 2004 a new law was passed, with no public debate, to enable the privatisation, which gave the new Lagos Water Company the power to disconnect water supply even from public primary schools defaulting in payment of water bills.

In 2010, there is little sign of any IFI or donor policies for water and sanitation in Lagos. Public meetings, however, continue to demand the development of these services. The water workers union has opposed the attempts at privatisation, but now proposes to start drawing up its own plans for a public water and sanitation services in the city.

The same privatisation policies have been pursued by donors elsewhere in Nigeria. In April 2005, WaterAid, the UK water charity, and Partners for Water and Sanitation (PAWS) , which included the UK private water companies, set up a project in 3 small towns to create Water Consumer Associations (WCA), with user charges paying for part of the costs of construction, and covering all operation and maintenance. There was strong resistance from communities to the new charges, but the project team “educated them on cost recovery”.

  • In April 2002, the World Bank set up the first National Urban Water Sector Reform  project, with privatisation as a conditionality.  Originally it was to involve seven states, selected not because of their needs for clean water supply, but “because their governments were prepared to consider private sector investment”, but the bank was unwilling to provide enough money - Kaduna state alone estimated that $257m was required to repair and expand its water network to cover 60% of the population – and the project was scaled back to just 3 states.
  • In 2003 the World Bank suggested developing privatisation of water in Nigeria through a ‘franchising’ structure, similar to the principle used for fast food chains like KFC, whereby local private water vendors would be ‘branded’ by a multinational eg Suez. The concept was abandoned after the multinationals said they were not interested.
  • In 2005 the World Bank started another project, worth $200m, in two states: Lagos and Cross River, also based on privatisation: “to establish a successful PPP intervention through management contracts. If management contracts can develop a positive track record, then higher forms of PPP can be considered where necessary".

Sources and further reading