New york: A new United Nations report reveals that the world has transitioned from what was once termed a water crisis into a state of water bankruptcy, with data from African utilities exemplifying this dire situation. This development is the central theme of "Water Security and Infrastructure Volume 2026," launched by ESI Africa, part of the VUKA Group, which maps the shift from water crisis to water bankruptcy. According to African Press Organization, the terminology of "water crisis" has become outdated, as highlighted in the Global Water Bankruptcy Report (2026) by the United Nations University Institute for Water, Environment and Health (UNU-INWEH). The report distinguishes between crisis and bankruptcy, explaining that while a crisis is a recoverable shock, bankruptcy represents a persistent post-crisis condition where water usage surpasses renewable inflows and safe depletion limits, leading to irreversible degradation. The report states that nearly 75% of the global population resides in countries classified as water insecure. Since 1970, the world has lost 410 million hectares of wetlands, equivalent to the size of the European Union, resulting in an economic cost of $5.1 trillion. Glacier mass has decreased by over 30%, and 70% of major aquifers are in long-term decline. ESI Africa's Water Security and Infrastructure Volume 2026 delves into how this global diagnosis aligns with African utility data. The report shows a pattern of non-revenue water, which is water produced but not billed, lost to leaks, theft, or faulty metering, exceeding 35% in countries like South Africa, Tanzania, and Mozambique. In Zimbabwe and Kenya's largest utilities, it surpasses 50%. South African Water Chamber CEO Benoît Le Roy emphasizes the lack of sufficient action to address non-revenue water, noting South Africa's rate at 47.8%. A World Bank study in 2017 of approximately 120 utilities across 14 African countries found that nearly half could not cover their operating and maintenance costs through revenue. Government s ubsidies filled the gap, inadvertently reducing pressure on utilities to improve their finances. Eight years later, the trend continues, with ESAWAS's 2023/24 benchmarking revealing a decline in average cost coverage and collection efficiency among major utilities. Challenges in financing water projects are exacerbated by land tenure disputes and inadequate baseline data. Without ring-fenced revenue, financing institutions are hesitant to underwrite the risk, as noted by DBSA Principal for Infrastructure Financing Bothwell Manikai and AfDB Senior Consultant for Private Sector Engagement Zakhele Mayisa. The report identifies sectors like mining, thermal power, agriculture, and data centers as significant water consumers needing adaptation. By 2030, AI-related water consumption is projected to reach 9.3 trillion liters globally. Africa's existing data center capacity highlights gaps in water billing efficiency, as pointed out by Nazeem Holmes of Open Access Data Centres. The focus, as outlined in the report, is not on constructing more dams and desalination plants, which could exacerbate unsustainable growth. Instead, it advocates for nature-based capital investment, water-bankruptcy risk screening by lenders, and real-time global monitoring of water resources. ESI Africa Editor-in-Chief Nicolette Pombo-van Zyl suggests that the utilities that will thrive in the coming decade will be those that minimize water loss rather than maximize production. The full volume, produced in partnership with Conlog and the STS Association, includes 17 articles discussing finance, metering, and policy responses within the sector.
