The economic implications of water resources management in the Western Cape water supply system

This paper summarizes the immediate outputs and outcomes of a multi-stakeholder dialogue process that was initiated in 2020 and supported by a hydro-economic analysis. It focused on improving understanding of the economic implications of water resources management in the Western Cape Water Supply System (WCWSS) for the Western Cape and strengthening relationships between key stakeholders. South Africa is a water-scarce country. Annual precipitation is about 52 percent of the global average, and in most systems, dam sites and available yield are fully utilized (or overallocated), while there is a water sustainable development goal funding gap of R33 billion per year. All of South Africa’s largest cities face high water security risks, which poses a systemic risk to the country as they are home to 40 percent of the country’s population and produce 60 percent of its gross domestic product (GDP). 

While this work focused on Cape Town and the WCWSS, it is relevant to most large metropolitan or secondary cities and the water systems from which they derive their bulk supplies, whether in South Africa or beyond. The conclusions are therefore highly relevant to many cities globally experiencing similar levels of increasing water stress, the stressed systems in which they are located, and the diverse stakeholders that depend on them.