As 2030 WRG enters an exciting new expansion phase, it is an opportune time to reflect on the experience of setting up multi-stakeholder partnerships (MSPs) in other countries. How did expectations differ from the reality on the ground? What lessons can be taken forward and applied in new engagements?
For this article, 2030 WRG sat down with members of the 2030 WRG team in Ethiopia to discuss the challenges of engaging with a nascent private sector.
Background: In September 2016, the Ethiopian government invited 2030 WRG to explore opportunities for establishing an MSP to support sustainable water management. In December 2017, the Planning and Development Commission (PDC and formerly National Planning Commission) formally invited 2030 WRG to jointly coordinate and undertake analytical work in the form of a hydro-economic analysis (HEA) in collaboration with the Ministry of Water, Irrigation and Energy (MoWIE) to provide insights into the 10-year planning strategy for Ethiopia. The HEA is currently under review and is expected to be published later this year.
2030 WRG: Let’s start by setting the scene. What are the major water challenges in Ethiopia?
Mekuria Tafesse, Ethiopia Country Coordinator: The challenges are many and interdependent. For example, rainfall variability in the country is high, which could be managed through sufficient storage capacity, but per capita storage is very low. Likewise, if we look at policy, the regulatory provisions are largely in place, as are the institutional arrangements, but enforcement capacity is limited. The result is the unconstrained use of water and unmanaged effluent disposal.
Nina Clara Jansen, Program Advisor: And there are exacerbating factors as well. Climate change, worsening instances of drought, and low resilience in combination with the unregulated abstraction of water results in inequality around water usage. For example, there are cases where factories have access to water, but the communities next to them do not.
Girum Bahri Tegegn, Industry Workstream Coordinator: Yes, agreed. And linked to that is the challenge around valuing water and wastewater treatment services appropriately. There is a flat rate for water, and therefore no incentive for the private sector to economize usage.
Joy Busolo, Senior Water Resource Management Specialist: Industrial production in Ethiopia is almost exclusively reliant on groundwater, so although it is less susceptible to the fluctuations in water availability that are commonplace given extreme rainfall variability, there are concerns around long-term sustainability if abstraction is not managed appropriately. But industry accounts for just around 1 percent of total water withdrawals. By comparison, the agricultural sector accounts for over 75 percent, and agricultural output is highly sensitive to variations in water availability. Reports show that accounting for knock-on impacts in other sectors, a drought in the Awash basin – which hosts a large concentration of agricultural and industrial production – could cause GDP to decline by 20 percent. So like Mekuria said, Ethiopia’s water challenges are interconnected.
2030 WRG: What type of barriers exist to multi-stakeholder cooperation in a setting like Ethiopia where economic growth has been driven largely by the public sector over the last decade?
MT: There is a strong desire from the public sector to engage the private sector, but there is not yet an established framework for private sector engagement.
Deborah Mekonnen Kefale, Program Coordinator: The private sector in Ethiopia has primarily participated in the water sector as a supplier to big infrastructure projects. In this sense, they have acted exclusively as service providers contracted through the public sector, unlike in other contexts where there is a robust private sector with established firms that deliver services directly to the population. The private sector, in general, has not been very active in many sectors of the economy.
NCJ: Within the private sector there is a varying appetite for partnership. Where firms have easy access to water, the business case for engagement is not obvious. But in cases where companies are dealing directly with issues around availability for their operations or for the communities around them, they are keener.
2030 WRG: So the context in Ethiopia differs significantly from many of the countries in which 2030 WRG operates, with the major standout factor being a fledgling private sector. Perhaps unsurprisingly, as a result, the timeline for launching the MSP in Ethiopia has been much longer than what has been the average across other 2030 WRG countries. How have expectations differed from experience on the ground?
NCJ: The expectation was that by now there would be an active national MSP with several workstreams operational. The reality is that we are not there yet.
MT: Typically the first step of the 2030 WRG workflow is the HEA, which is the primary advocacy tool for driving interest and participation in the MSP. Setting up the MSP is the second major milestone. In Ethiopia publication of the HEA has been delayed. When it first became apparent that we would not be able to launch the HEA according to the original timeline, we decided to shift the strategy and develop the MSP in parallel to the HEA, but this turned out not to be possible, so we had to shift our strategy again. In the end, we were able to adapt the original HEA advisory group into two standalone private and public sector forums. In Ethiopia’s unique context, these separate groups enabled us to build trust among the stakeholder groups first, which has led to increased trust between both groups.
DMK: There is now more openness to the private sector, especially with the recent political changes. We are seeing the public sector take initiative to engage with the private sector, which is a very big step forward.
MT: The next step now is creating a framework for constructive engagement, which will require a shift in mindset as to what constitutes the private sector. Typically, they are viewed only as service providers and not as water users. This is especially relevant when we look at water efficiency measures. Where water availability is not a problem, the focus has been on building new infrastructure rather than managing existing supplies and curbing demand.
2030 WRG: It sounds like a factor underpinning the future success of a national MSP is shifting attitudes and perceptions around water risks and private sector cooperation. Is that accurate?
GBT: The aggregate numbers don’t show the water stress, the stress is localized. Consequently, people are not worried about managing the resource. This is contrary to the 2019 World Economic Forum’s Regional Risks to Doing Business assessment, which counts water as one of the top 10 risks to business. In Ethiopia, water was rated as number two. As business and consumerism grow, so will demand for water.
NCJ: In areas where the stress is being felt, companies are well aware of the water risks. Likewise in cases where demand is quickly increasing, there are calls for a more stringent regulatory framework to address issues of water availability and quality. For example, in locations where increased industrial activity is planned, there is a trend towards urbanization as work-force settle in the surrounding towns. Regulatory frameworks are required to allocate water for both industries and citizens.
JB: In some cases that shift is already happening but on an individual basis. As 2030 WRG we can leverage these opportunities to move to accelerate the transition from ideas to action. As an example, off the back of the consultations we were doing as part of the HEA development, a coalition of beverage companies approached 2030 WRG with a desire to improve their water management practices. Working together with these companies, we were able to create a national Beverages Alliance for Water to help raise awareness of water scarcity, stimulate collective action to lower the sector’s water footprint and drive dialogue around policy frameworks.
DMK: In this regard, the HEA will be an important tool to help raise awareness about the risks and build the business case for demand management.
2030 WRG: What lessons do you think can be drawn from Ethiopia’s experience in terms of launching an MSP?
DMK: MSP development can’t be a one-size-fits-all approach. We have learned that what works in one country won’t necessarily work in another. There are always alternatives. And most importantly, the approach and even the MSP itself must be responsive to local needs and capacities.
MT: There needs to be careful planning around identifying key stakeholders, being mindful of frictions that may exist. It is also a good idea to work closely with those entities that will be involved in clearing any research for publication. Be aware of the workflow and clearance process, and plan accordingly.
NCJ: Scope out what could be a goal – is it realistically an MSP? Every country has a different environment and approach. Identify which partners to put in the driver’s seat and for what. What could their contribution be? Create a clear agenda and vision.
GBT: Until such a time as the HEA is done and there is a systematic way of identifying constraints, look for low-hanging fruit and quick wins that can help build relationships and trust.
JB: Successful multi-stakeholder partnerships are effective because those that participate are dedicated and share a mutual understanding of the challenges and priorities. That isn’t something that happens overnight. Taking the time to align incentives and build collaborative, trust-based relationships is crucial.
2030 WRG: Ethiopia team, thank you so much for sharing your insights.