Statement by David Grey on behalf of the World Bank at the African Ministerial Council on Water Meeting

Your Excellency Prime Minister Meles Zenawi of the Federal Democratic Republic of Ethiopia, Mr. Chairman, Honourable Ministers, Your Excellencies, Representatives of Multilateral, International and Bilateral Organizations, Ladies and Gentlemen:

It gives me great pleasure to participate in this Ministerial Meeting on behalf of the World Bank.

The raison d'etre of the World Bank is poverty reduction. In all of our borrowing countries effective management and development of water resources and water services are essential for poverty reduction. This is why the World Bank has historically invested about US$3 billion a year in water-related sectors.

Water is both a blessing and a curse for Africa. Water & poverty in Africa are inextricably linked. The challenges are mind boggling, and have been eloquently laid out by some of the other speakers.

I would like to focus on how to overcome the challenges. Water underpins development initiatives across the African continent - food security, health, economic growth, environmental regeneration. And there are other reasons to be positive.

My first reason to be positive is the increased commitment of Africa to addressing its water challenges. This Pan African Conference on Water is a case in point of how the African water community can come together under your AMCOW leadership to develop your programs for your water in your Africa.

The World Bank team greatly appreciates the high-quality discussions of the past few days. We are happy to hear consistent messages emerging which are in line with our approaches in the water sector. The overall message echoed in all sessions is that increased investments in the water-related sectors must be accompanied by urgently needed reform.

We once again heard the call from African countries to the international community to resume support to developing and maintaining an appropriate stock of water infrastructure, including dikes, canals, dams, and distribution networks. Extreme climate variability and associated landscape vulnerability yields massive shocks on African economies. In addition to enormous impacts of extreme events, expectations of shock lead to disincentives to invest by farm families, firms, towns and nations, even in normal years.

The discussions in the past few days have shown emerging pragmatic approaches on the sensitive issue of cost recovery for water services. There is no other way to create sustainable service providers, than by ensuring that those who get services pay for these, with appropriate transparent arrangements made for subsidizing the poor when a government deems that necessary.

Simply charging what is delivered and collecting bills in a timely manner has been mentioned as a pragmatic starting point to substantially increasing cash flow. Attracting new financing sources - with the exception of limited grants by international donors - are premised on sound finances of service providers.

The third trend we observed during the past days is the increased call for support to sub sovereign initiatives. We strongly endorse the notion that sub-sovereign financing must go hand-in-hand with support to reform and capacity building. The World Bank is increasingly supporting sub-sovereign governments, such as local governments, irrigation districts and national basin agencies. We are also committed to support African actors in developing local private sector, including leveraging local private capital and developing capital markets. As a concrete next step, we - together with our colleagues of the African Development Bank - are working on an initiative to support small and medium enterprise and NGO capacity to support town and district water and sanitation programs.

I would like to briefly on some of new initiatives that give me more reason to be positive.

The World Bank welcomes the establishing the African Water Facility, which can pave the way for substantive future investments in the sector. We feel this facility can be a very effective instrument if shaped as a grant facility for preparing projects and programs and for improving the policy and regulatory environment. We hope that the Facility will be operational soon and look forward to working with it.

We are very happy that our colleagues from the African Development Bank are taking urgent action to consolidate and expand support in the water sector. This is not only done through hosting the Africa Water Facility, but also through their new Rural Water Supply and Sanitation Initiative and through strong engagement in a number of river basins in Africa. Water was recently added as a focal theme to the general framework of cooperation between our two banks. This provides a basis for ever increasing cooperation.

Cooperative management & development of international basins is essential for economic efficiency and long term peace and security. Achieving this is slow, complex and costly. In the past few days, the ministers of the Nile Basin countries have taken yet another step towards cooperation within their shared basin. This is not only a major step for those living in the Nile Basin itself, but also provides a lighting example for the other 60 or so international river basins in Africa.

Agriculture is often a neglected in water conferences, although it accounts for 80% of water use. We are happy to see that this time not only were the sessions on water and food among the best-attended sessions of the past few days. They also made substantial progress on strengthening partnerships among countries. The World Bank is very happy to team up with NEPAD, the African Development Bank, the Food and Agricultural Organisation, the International Fund for International Development, and the International Water Management Institute to jointly review experience in agricultural water development in Sub-Saharan Africa. This will enable all of us to improve the quality of our support. We hope this initiative is a first step to catalyse increased investment in agricultural water development for poverty reduction in SSA.

The African Ministerial Council on Water provides a political and policy platform for African leadership and advocacy. It thus complements NEPAD, the agreement of African heads of states that asserts African commitment to and responsibility for poverty reduction on the continent. We see AMCOW as a great opportunity for the continent. Joint political leadership will enable you to powerfully advocate the sector. We will be happy to support you to get the ammunition you need to make your case that water-related investments will have a major impact on growth and poverty reduction. Africa can simply not afford to not invest in water.

I would like to give a word of caution on the multiplicity of initiatives in the sector. NEPAD and WSSD have stimulated a number of regional water initiatives. Sometimes there is little clarity about who is doing what, and what progress has been made. This meeting provides an opportunity for AMCOW to develop alignment amongst regional initiatives, establish clear mandates, and to build momentum on concrete proposals and working arrangements for action.

The major challenge facing Africa is one of implementation. Water is on the agenda. Consensus on pragmatic approaches combining management and development of infrastructure has emerged. We have to get started on effectively delivering development that helps to lift the poorest out of poverty.

Action is a the country and local level. The World Bank is working in most of the countries in Africa. We focus resources to countries that are both ready and committed. We invite our partners to increase cooperation at the country level through co-financing in order to increase aid without increasing administrative burdens on client country governments.

In conclusion....

At the World Bank we believe that water-related investments - for services and resource development and management - are vital for growth and poverty reduction. And we believe that a lot has been learned about the enabling conditions which are necessary to make effective use of these resources.

We remain firmly committed to staying heavily engaged and to continuing, along with our partner countries, to learn the lessons of experience and build on these. We look forward to working with you in making water a key to developing Africa.

I thank you Mr. Chairman.