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Economic Value of Water: Mozambique  

The legal framework for water resources management in Mozambique includes: policy instruments (the National Water Policy of 1995, the Water Tariff Policy of 1998, and the revised National Water Policy of 2007); legislation (Constitution Act of 1990 and the Water Law of 1991); and, a set of decrees to regulate and implement the provisions (Barros 2009).

The concept that water has an economic value and that there should be a cost associated with its use is recognised in the 1991 Water Law. The concept is further developed in the 1995 policy document where it is written “to permit services to be financially viable, the price of water should come to reflect its economic value, eventually covering the cost of supply”. This cost of supply only considers the utilization of hydraulic infrastructure and not the potential costs associated with environmental damage (Robinson 2003). The revised National Water Policy (2007) includes “Acknowledging the economic value of water, besides its environmental and social values; […] Improving inventories on water resource and water registers on water uses” (National Water Policy 2007; Barros 2009). The Water Policy (2007) states that education about the value and importance of water must begin in primary school in coordination with the education sector.

As per the Water Law (1991), taxes are issued for the use of water with revenues reverting back to the Regional Water Administrations (ARAs). “The value of the tariffs is established depending on the required volume measured or estimated as a function of the type and size of the activity, the nature of the activity and amount of contamination produced”. The Water Law (1991) differentiates between the use of water in the public and the private domain, this is explained in the box below (Barros 2009).

Cost Recovery and Water Use Priorities in Mozambique

“Water from the public domain can in some cases fall under a regime of free use, whereas in other cases it can be used privately after being subject to licenses or concessions (Article 25; Barros 2009). Traditional or common uses of water are those meant to satisfy basin needs, e.g., the domestic, personal and family needs of the user, including drinking water for animals and small-scale farming not requiring a concession, as they follow the traditional use regime and do not change the water quality or quantity or its natural course (Article 22). The same applies to people who own titles granting the right to use and exploit land (landowners) (Article 23).

The Water Law (1991) gives absolute priority of water use to human water supply, sanitation requirements and common uses (Article 26; Barros 2009). The next highest priority is given to environmental sustainability. In the cases of conflicts emerging from a lack of water for non-priority objectives, these are resolved as a function or a socio-economic cost/benefit analysis conducted by the ARAs (Article 26).”

Source: Barros 2009

ARA-Sul 

ARA-Sul is the regional water administration in charge of water related activities in the Limpopo River basin in Mozambique. One of ARA-Sul’s responsibilities is to recover the costs of the service of water resource management in the basin, and to implement the National Water Register.  The register to date only captures about 40 % of water users. These users are related to large agricultural schemes such as Chokwé, urban water supply and industry, to date there is no data for common uses. A lack of funds to collect data in the vast and remote Gaza province adds to the problem.

ARA-Sul’s operational expenditure is far above its income because of “low raw water tariffs, the non-payment by some customers, or constraints placed on the budget by the central government as well as insufficient private investment” (Barros 2009). Non-payment of debts owed to ARA-Sul is one of the primary reasons for its lack of financing. Some of the largest debts owed to ARA-Sul are from The Hydraulic of Chokwé, Public Company (HICEP). HICEP is in charge of the management of the majority of the water used in the perimeter of the irrigation scheme. Although HICEP owes large amounts of money to ARA-Sul, ARA-Sul cannot simply stop providing water to the irrigation scheme because of its importance to agricultural production in the country. This problem is to the point that it needs to be resolved at the political level.

Massingir Dam in Mozambique.
Source: Hatfield 2009
( click to enlarge )

 



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