Water Pricing: The Case of South Africa

Abstract

South Africa is a water-scarce country with a high level of income inequality, based largely on race. The issue of water pricing for water services and raw water has been shaped over the years to try to address both of these issues and to ensure a revenue stream that, with the parliamentary appropriation, is sufficient to fund the management and infrastructure-related costs of providing water and protecting water resources. This chapter deals with the key aspects of water pricing in South Africa for irrigation, municipal and industrial use, and power generation. It outlines the legal framework for water pricing and how this has been interpreted since the current legislation was promulgated in the late 1990s. It also outlines some of the key debates currently being addressed, such as how to deal with irrigation subsidies, how to address issues of equity, the possible adoption of a national charge for water, and how best to structure infrastructure-related charges.