Munich Personal RePEc Archive

Urbanization and Demand for Water and Sanitation Services: An Analysis on Cross-Region Investment Requirements

Mukherjee, Sacchidananda and Chakraborty, Debashis (2016): Urbanization and Demand for Water and Sanitation Services: An Analysis on Cross-Region Investment Requirements.

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Abstract

With advent of economic growth, rapid urbanization has led to a consequent rise in demand for water supply and sanitation (WSS) services. The growth rate of urban population is quite high in regions characterized by low and middle-income, namely, Sub-Saharan Africa, South Asia, Middle East and North Africa, East Asia and the Pacific, Latin America and the Caribbean. Given the poor access to WSS across several regions, the present analysis attempts to estimate the demand for investment in this sector. The empirical estimates reveals that to achieve universal access to improved WSS by 2019, the stock of investment in water services should reach US $2,240 billion at 2005 prices in 2019. At the given stock of investment in 2012, an additional investment of US$ 590 billion (US$ 134 billion in water supply and US$ 456 billion in sanitation) would be required in new water services infrastructure to reach the desired stock of investment by 2019. Given the high investment requirements in lower-income countries, and the potential shortfall in required capacity creation through government budgetary devolutions, the analysis recommends move towards several reforms, including, liberalization of investment regimes, implementation of water-saving innovations, integration of stormwater and rainwater management practices with the wider urban planning.

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