The politics of urban water reform in Ghana

Abstract

This article highlights the interaction between the domestic political system and the aid system in Ghana and the implications of this interaction for democratic governance. It is illustrated using the example of urban water reform as a case study of the policymaking process and captures the complexities of this interaction which the ‘choiceless democracy’ thesis fails to do. The term ‘aid system’ refers to all aid organisations and their regular operations within a specific country, where aid organisations include both official bilateral and multilateral agencies as well as international NGOs. The article examines the government’s plan for water privatisation and the public debate and opposition that it continues to generate. The politics of urban water reform is revealing about the politics of economic reform more generally.

This article is based on a chapter of the author's doctoral dissertation (Politics, 2005, University of Oxford).

Acknowledgments

The author is grateful to Alhassan Adam for his generous assistance during the research and for comments on previous versions of the article from Peter Evans and an anonymous reader.

Notes

This article is based on a chapter of the author's doctoral dissertation (Politics, 2005, University of Oxford).

1. For an elaboration, see Whitfield (2005a).

2. These figures are calculated from Government of Ghana statements for financial years 2004, 2005and 2006 and from CEPA (2002, 2003).

3. For a literature review on the use of the state-(civil) society paradigm in African studies, seeWhitfield (2003). For a general critique of the state-society paradigm, see Migdal (2001).

4. Official aid agencies with operations in Ghana in 2003 include the IMF, World Bank, AfricanDevelopment Bank, European Union, organizations of the United Nations agencies (UNDP, UNICEF, FAO, WHO), Canada (CIDA), Denmark (DANIDA), France (AFD), Germany (GTZ), Japan (JICA), Netherlands (SNV), United Kingdom (DFID) and United States (USAID). Throughout the article, we use the term ‘donors’ as shorthand for these official aid agencies.

5. For examples of literature critical of the theoretical claims by, and privatisation policies of, theWorld Bank, IMF and other donors, see Cook and Kirkpatrick (1988, 1995) and Mkandawire (1994).

6. The statement was titled ‘Water is Life: A Civil Society World Water Vision for Action’. On theinternational coalition, see www.blueplanetproject.net and www.citizen.org.

7. World Bank 1989, 1994; ‘Consultancy Services for the Restructuring of the Water Sector, FinalReport’, March 1995, Sir William Halcrow & Partners Ltd, Ministry of Works and Housing, Republic of Ghana, p.41, 67-69 (Halcrow Report).

8. On corruption, The Chronicle published a series of articles in 2002 on the findings of the Justice Adade Probe into financial malfeasance by senior officials of Ghana Water Company Ltd.

9. Halcrow Report, p.93.

10. Ghana Water Sector Restructuring Workshop Proceedings, 6-8 February 1995 (part of HalcrowReport).

11. Ghana-Increased Private Sector Participation-Urban Water Sector-Business Framework Report,1998, Louis Berger S.A (Berger Report).

12. Berger Report, p. 1-5.

13. The exact list of firms is not clear. A presentation made by the Secretariat indicated that Suez,Bechtel, Vivendi and Saur pre-qualified in 1998 for both contracts. In a second round of pre-qualification held in 2000 for one of the contracts Biwater, Halliburton, Saur, Bechtel and Suez participated.

14. It is probable that Azurix was attempting to break into the global water market by offering adeceptively attractive contract and by bribing the Minister. There is no public documentation on the Azurix deal, but evidence of bribery was contained in the Financial Times, 12 February 2002, and mentioned in interviews and in several documents collected during research.

15. Presentation by the Secretariat, ‘PSP in the Urban Water Sector’, made at the Public Forum onWater Privatization, 16-17 May 2001, Accra, available at www.isodec.org.gh. Donors present at the conference included the World Bank, UK, France, Denmark, EU, and Japan.

16. Interviews with Bagbin, Nkrumah, Darkwa, and Sarpong Manu.

17. Letter from Peter Harold, World Bank country director for Ghana, to the Coalition, 9 March 2002.

18. The exact price required to cover all costs is debatable (interview with Sarpong Manu), but as apolicy, cost recovery means that consumers must pay the full cost of the operation and maintenance of the water utility.

19. Interviews with Bagbin, Darkwa and Nkrumah. Also stated in ‘Water Sector Restructuring inGhana’, p.12.

20. Experience shows that companies have renegotiated the contract in their favour after the contractis underway (Lobina and Hall, 2003).

21. ‘PSP in the Urban Water Sector’.

22. Letter from Peter Harold to the Coalition.

23. ‘Water Sector Restructuring in Ghana: the decision, the framework, the issues’, Water SectorRestructuring Secretariat, undated.

24. ‘Ghana-Urban Water PSP Process: promoting the development of arrangements for the provisionof services to the urban poor,’ final report, prepared for Ministry of Works and Housing/DFID, by MIME Consult Ltd., Accra, August 2002.

25. For more on these progressive organisations, see Ray (1986) and Hansen (1991).

26. Statement at the bottom of Coalition letterhead.

27. Uniiq radio station, Accra, 13 June 2002, Ghana Today programme, Rudolf Amenga-Etego,Coalition leader.

28. ‘How Country-Owned is Ghana’s Water Privatisation Process?’, Rudolf Amenga-Etego, ISODECwebsite.

29. Confidentiality of the bid documents in Ghana is not unique (see Lobina and Hall, 2003).

30. For an example, see ‘Ghanaians should ignore ISODEC’, advertiser’s announcement by theMinistry and Secretariat, published in several newspapers around 5 October 2001.

31. The content of the Mission’s report cannot be discussed here for lack of space. See www.isodec.org.gh/isodec.org.gh/campaigns/water/index.htm for access to the report.

32. Interviews with Bagbin, Nkrumah, Sarpong Manu, Darkwa and Kofi Tsikata.

33. Peter Harold speaking at the public forum, recorded in the ‘The Water Dialogue’, ISODECproductions, 2001; and Letter from Peter Harold to the Coalition.

34. Cusack interview; internal World Bank document.

35. ‘Water in Public Hands: public sector water management – a necessary option’, by David Hall,PSIRU.

36. In addition to PSIRU research, a research project at PRINWASS, School of Geography and theEnvironment, University of Oxford funded by the European Commission illustrates this gap between expectations and performance.

37. Financing Water for All – Report of the World Panel on Financing Water Infrastructure,www.worldwatercouncil.org/download/Camdessus Report.pdf.

38. See ‘The World Bank Wonders About Utility Privatisations’, M. Phillips, Wall Street Journal, 21 July 2003; World Bank’s 2004 World Development Report, ‘Making Services Work for Poor People’.

39. Internal World Bank document on the water restructuring in Ghana, February 2003. Informationon the position of transnational companies and Bank support for the management contract comes from this document. Much of this information can also be found in ‘PSP in Water Ebbed’, The Statesman (Ghana), 2 May 2003.

40. Tsikata interview.

41. World Bank Project Appraisal Document on proposed credit $103 million to the Republic ofGhana for an Urban Water Project, 1 July 2004; and ‘World Bank funds Ghana urban water project’, World Bank press release, 28 July 2004.

42. Project Appraisal Document, p.71. The Project Information Document also mentions this affermage, and states that the management contract should establish a foundation for a more complex Public Private Partnership in the future that will bring private investment. Affermage is a French model which roughly corresponds to a lease arrangement that does not require major private capital investment.

43. Most of the Coalition’s arguments were contained in Public Agenda, a newspaper which is a subsidiary organization of ISODEC. The state-owned Daily Graphic largely, but not solely, contained pro-management contract articles.

44. ‘Ghana: World Bank turns US$103 million Ghana Urban Water credit to grant’, World Bankpress release, 6 January 2005.

45. Vitens, a Dutch firm, is partnering with South African Rand Water. A financial crisis in late 2002forced Vivendi to sell shares in its utilities unit, Vivendi Environment. By December 2004, it owned only 5 per cent in the new Veolia Environment, which remains the world’s largest water company. See ‘Veolia Environment: A Corporate Profile’, Public Citizen’s Water For All programme, February 2005; www.wateractivist.org.

46. ‘Consortium walks out of water meeting’; www.ghanaweb.com, general news of 10 April 2006,sourced from Public Agenda. The information on the Dutch law came from a PSIRU research report.

47. World Development Movement, press release 18 May 2005, ‘Biwater kicked out of Tanzania’,www.wdm.org.uk.

48. Public statement issued by the National Coalition against Privatization of Water.

49. See similar arguments made by Harrison (2001, 2004) based on studies of Tanzania, Uganda and Mozambique.

Additional information

Notes on contributors

Lindsay Whitfield

Lindsay Whitfield, Junior Research Fellow with the Global Economic Governance Programme based jointly at University College and the Department of Politics and International Relations, University of Oxford; [email protected].