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Value of Water in Namibia  

In 1993, the Resource Economics Programme (or Environmental Economics Programme - EEP) was initiated in Namibia, under the auspices of the Ministry of Environment and Tourism. The programme collects and provides information to decision makers on the environment as an asset. One of the focus regions so far has been Kunene region.

While in former times people and politics had treated the environment as a “free good” leading to unsustainable resource use, the EEP explicitly links conservation and economic aspects in order to take into account both perspectives in decision-making.

Water Policy Context

Namibia started to compile national water accounts for 1993 and 1996 under the Namibian Natural Resource Accounting Program initiated in 1995, in order to support the Water Act (Lange and Hassan 2006). The political orientation has shifted in recent years, in particular with the Water and Sanitation Policy (DWA 1993) and the Water Resources Management ACT (MAWRD 2002). The new Water Act emphasizes the economic value of water and promotes economically efficient water use. It also stresses the need for appropriate water pricing by tariffs that reflect full financial cost of water supply, but also environmental impacts and opportunity cost (Lange and Hassan 2006). Water accounts in Namibia are mainly flow accounts, as there is very little data available for stock accounting. Wastewater and environmental flows have not yet been incorporated in the water accounting system, again due to lacking data.

Water Source, Provider and User Categories

In Namibia the water flow accounts consider the source of water (natural and the supply agency) as well as the end-user. Unaccounted for losses are also considered in the accounts as a ‘use’. There are 26 categories of end-users of water in Namibia across the primary, manufacturing, service, government and household sectors.

Natural Sources of water included in Namibia’s water accounts are:

  • Groundwater;
  • Perennial surface water;
  • Ephemeral surface water stored in dams;
  • Recycled or reused water; and
  • Seawater.

Namibia’s water accounts consider five major water supply institutions operating under different principles and with different technologies. They are:

  • NamWater;
  • Municipal, town, regional and village water authorities;
  • Rural Water Supply;
  • Rural communities; and
  • Self-providers.

Water Use and Water Productivity in Namibia

Agriculture is the most water intensive activity in Namibia and yields a contribution to GDP of around 10 %, while using over 60 % of the nation’s water. The value-added per cubic metre of water in agriculture, and more specifically irrigation, is very low compared to manufacturing and service sectors, N$7.2/m³ compared to N$272/m³ and N$574/m³ respectively.

Source: MET 2001, State of the Environment Report on Water
Water tanker drawing water from Kunene River.
Source: Kellner 2010
( click to enlarge )

From 1997/98 to 2001/02, improvements in water productivity occurred in diamond mining (14.4%), manufacturing (2%), services (4%), and government (11%). Beverages increased with 43% during the 4-year period. Fish processing decreased the water productivity in the manufacturing sector (DWAF 2006).

The table below presents summarised data on costs, charges and subsidies for the five major water supply institutions, for the years 1999 and 2001.

Supply Costs, User Charges and Subsidies for Water (Million N$)

  1999/2000 2001/2002
Costs 212 264
Water transferred to other suppliers 164 179
Water delivered to end-users 49 84
User charges 170 274
Water transferred to other suppliers 131 218
Water delivered to end-users 39 56
Subsidy: user charges-costs    
Water transferred to other suppliers -33 39
Water delivered to end-users -10 -28
All water -43 11
Costs Incomplete information
User charges    
Subsidy: user charges-costs Cannot be calculated
Rural Water Supply
Costs 92 108
User charges 0 0
Subsidy: user charges-costs -92 -108
Rural communities
Costs 5 9
User charges 1 6
Subsidy: user charges-costs -4 -3
Self-providers in agriculture and mining No information, but self-providers cover all costs themselves, so there is no subsidy

Source: adapted from Lange and Hassan 2006

Water Tariffs

NamWater costs (abstraction, water treatment and transfer costs) and tariffs of
water for 2001/2002 (source: DWAF 2006) differed in most of the country's regions. Nation-wide average water cost (full cost recovery) stood at 2.79 N$/m³ as contrasted by an overall average tariff of 2.89 N$/m³. Highest costs occurred in the NamWater Area Omaheke (9.19 N$/m³; tariff: 3.60 N$/m³), and lowest costs were found in Okavango area (1.53 N$/m³; tarif: 2.26 N$/m³).

In NamWater's Kunene Area, water cost stood at 5.23 N$/m³ while water tariff was 3.08 N$/m³.




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