The strategic role of water in sustainable economic growth and development: the case of South Africa

This paper analyses the strategic role of water in South Africa’s economy at the macro and sectoral levels. At the macroeconomic level, an analysis of the correlation between precipitation and economic growth shows that although the country is relatively water scarce, investment in water infrastructure and diversification has played an important role in building the economy and reducing vulnerability. However, the country’s current per capita water storage of 700m 3 is very low compared to other middle income countries and may compromise attainment and sustenance of the targeted 6% economic growth rate. At the sectoral level, the paper highlights efficiency and water productivity issues that require urgent attention especially in agriculture. The paper concludes that there is a strong correlation between water and the economy highlighting the impact of floods and droughts in other SADC countries and makes the case that investing in water infrastructure, management and services is absolutely essential and a necessary prerequisite for sustainable economic growth, poverty alleviation and social development.