South Africa’s big water problem

South Africa’s water crisis continues to escalate as demand for the resource grows while infrastructure and other factors deteriorate. This poses serious risks to households and businesses in the country.

PwC revealed in its South Africa Economic Outlook for February and March 2025 that South Africa is considered a water-scarce country and ranks among the driest in the world.

South Africa receives an annual average rainfall of less than 500 mm, which is significantly less than the global average of 850 mm.

“Water availability is further exacerbated by overconsumption, ageing infrastructure, inadequate maintenance, pollution and extreme weather,” the firm explained.

Despite this, South Africans consume 35% more water per capita than the global average of 234 litres of water per person per day. 

This puts additional strain on South Africa’s already limited supply, especially in regions where there is demand-driven water scarcity.

“However, natural supply and over-consumption are not the only constraints. The reliability of water distribution and treatment infrastructure is another substantial contributor to South Africa’s water supply risk,” PwC said. 

The Department of Water and Sanitation’s Blue Drop Report for 2023 found that nearly half of all water supply systems (WSSs) nationwide received unacceptable quality assessments.

In fact, the share of municipal WSSs performing poorly or at a critical level increased from 40% in 2014 to 47% in 2023. 

In addition, the department’s Green Drop 2023 Progress Assessment Tool (PAT) report revealed that approximately 64% of all wastewater treatment works are nearing failure.

“This carries increased risk to acute human health bacteria or pathogens in drinking water supply,” the firm explained.

PwC South Africa Water Management Leader Nino Manus said one of the key challenges to maintaining water infrastructure is money or the lack thereof. 

The No Drop Report 2023 revealed a crucial insight into South Africa’s non-revenue water, which refers to the difference between the amount of water injected into the water-supply system and the actual amount of water billed to customers.

This report found that the country’s non-revenue water increased from around 42% in 2014 and 2015 to above 46% between 2021 and 2023. 

“At present, this number is either stagnating at high losses or is on the upward trend across WSSs,” PwC said. 

“This means that almost half of all clean and treated water intended for consumers does not generate revenue.”

This can be due to physical losses like leaks, apparent losses like meter inaccuracies, illegal connections, or authorised but unbilled consumption like free basic water.

Therefore, South Africa is losing out on significant amounts of money every day, impeding its ability to solve the country’s water woes.

Business impacts

PwC highlighted operational risks, financial strain and supply chain disruptions as some of the adverse impacts businesses are experiencing due to South Africa’s water challenges. 

“Water-intensive industries such as agriculture, mining and manufacturing may experience the most immediate disruptions,” the firm explained.

For example, mining companies rely on water for many processes, and scarcity, therefore, not only impacts their production but also generates tension with surrounding host communities. 

“These communities rely on municipal water supply but often rely on mining companies’ assistance with water and other infrastructure development,” it explained.

The agricultural industry is also under significant pressure, as reduced water supply and associated above-inflation increases in tariffs weigh on farm production and food security. 

PwC explained that each year, the country’s 144 Water Services Authorities (WSAs) independently set their water tariffs. 

“There is no comprehensive public data set covering all WSAs, making it challenging to track water price increases for each authority,” the firm explained.

However, data from Statistics South Africa shows that water prices have consistently increased above the inflation rate since 2017. 

Reserve Bank data has further shown that cost drivers for these above-inflation increases include slow growth in infrastructure grants, high growth in employee remuneration, bulk water and electricity costs, and high growth in debt impairments.

PwC said there are ways for local businesses to mitigate the impact of the country’s water crisis.

For example, businesses can recover, recapture, and reuse water, implement backup systems and harvest rainwater and greywater. 

The firm said conducting a water risk and usage baseline assessment is crucial for developing a water strategy. 

“Collaborating with the public sector can address infrastructure and related service delivery challenges,” PwC said.