Bank, at the Water Relief Campaign launch banquet, Variety Club,
Johannesburg
14 November 2006
Honoured guests,
Ladies and gentlemen:
1. Introduction
I am pleased and honoured that you have accepted our invitation to this
banquet whose purpose is to launch the Variety Water Relief Campaign. As has
been explained by the organisers this campaign is an initiative to support the
government's efforts in reaching out to some of the poorest schools in our
country. It is a worthwhile campaign which I am glad that you have decided to
join in. The needs out there are many and thanks to your support, the Variety
Club can make some contribution towards improving the lives of school children
or learners.
Our campaign is the Variety Water Relief Campaign. As we all know water is
absolutely essential for the sustenance of human life and maintenance of basic
human dignity and should, therefore, be a fundamental human right. Also there
could easily be enough water for everyone if the resource was shared equitably
while ensuring the sustainability of natural ecosystems. Yet, globally over a
billion people do not have access to clean water supplies and over two billion
lack accesses to adequate sanitation, the primary cause of water borne
diseases.
As many of you might know I grew up at the Limpopo Province in a village
just outside the little town of Tzaneen. There was no clean water system there.
In fact we depended on water drawn from the nearest Nwaveti River. This task
was more often than not assigned to women and young girls. The conditions were
not conducive for a healthy life. As a matter of historic fact in 1969 or
thereabout my two siblings and I fell ill from typhoid and spent three to four
weeks in hospital. The environment was just ripe for disease. Boys would be
swimming upstream whilst girls and women would be collecting water downstream!
I regret to say this evening that many of the people in that area and others
still do not have access to clean water. My former Cabinet colleagues know of
my Mrs Mboweni water story that I told in 1994. Up to today Mrs Mboweni is
still struggling for clean water.
2. Water and the Millennium Development Goals (MDGs)
It was against this backdrop that at the United Nations (UN) Millennium
Summit, in September 2000, the leaders of the world adopted the eight MDGs. The
MDGs constitute a developmental framework with time bound goals and targets for
measuring progress and have since been embraced by all development institutions
across the globe. By 2015 the MDGs seek to among a range of other things halve
poverty, halt the spread of HIV and AIDS, provide universal primary education,
reduce by half the proportion of people without sustainable access to safe
drinking water and the proportion of people who do not have access to basic
sanitation.
The UNs Millennium Development Goals Report (2006) shows significant
progress towards the attainment of the MDGs. It also shows that we still have a
long way to go. Unfortunately with half of developing country populations still
lacking basic sanitation, the world is unlikely to reach its target.
Nevertheless, according to the report between 1990 and 2004 sanitation coverage
in the developing world increased from 35 to 50 percent. This meant that 1,2
billion people gained access to sanitation during this period, 300 million less
than the requirement to meet the target.
The report sees the world as being on track to reach the drinking water
target with as many as 81 percent of people in the developing world having
access to improved sources of drinking water in 2004. This can be compared to
71 percent in 1990. However, issues such as population growth and the urban and
rural divide pose challenges going forward. In parts of sub-Saharan Africa, for
example, urban dwellers are twice as likely to have safe water as those in the
countryside.
3. South Africa and the MDGs
And how does South Africa compare? According to the triennial World Water
Development Report (2006) of the UN 19 percent of the South African population
still lack access to safe water and 33 percent lack basic sanitation services.
Public institutions also suffer from a lack of access to safe water and
sanitation services, 59 percent of all schools (over 16 000) and clinics (over
2 500) lack access to acceptable sanitation facilities while 27 percent of all
schools (over 7 500) and 48 percent of all clinics (over 2 000) lack access to
safe water supplies.
The report also cites the occurrence of water related epidemics and diseases
such as diarrhoea, cholera, dysentery, hepatitis and bilharzias. In 2004 there
were 2 780 cholera infections with 35 fatalities and 9 503 hepatitis A
infections with 49 fatalities. These diseases significantly affect the economic
productivity and social activities of affected households.
I should, however, hasten to add that it is not all doom and gloom. South
Africa is one of a few countries that have made formal legal commitments to
acknowledge a right to water and by one account is the only country where the
right to access to water is embodied in a Constitution. Section 27(1) (b) of
the Constitution states that everyone has the right to have access to
sufficient water, while Section 27(2) requires the State to take reasonable
legislative and other measures within its available resources to achieve the
progressive realisation of this right.
According to South African MDGs Country Report (2005), the country has
already met some of the MDGs. Since 1994 South Africa has reduced the
proportion of people lacking access to safe water from 40 percent to 19
percent. This, however, may be related to the fact that in 1994 following the
birth of the new dispensation, the government set itself many targets similar
to those articulated in the MDGs. The five-year strategic plan (2006/07 to
2010/11) of the Department of Water Affairs and Forestry seeks to reduce the
backlog by a further 1,5 million people in 2006/07, 1,7 million in 2007/08 and
1,8 million per annum in the subsequent three years to 2010/11.
These achievements are definitely laudable. But whilst many of us gathered
here tonight take clean, safe drinking water for granted and even have a choice
between bottled and tap water, there is a child out there who has to wait
beyond 2011 to have access to a functioning basic water supply facility. But
the children should not wait. One child having to wait one more day is one
child too many and one day too long.
4. The role of the South African Reserve Bank (SARB)
And what is the role of the SARB towards the attainment of the MDGs? The
attainment of the MDGs requires high and sustainable rates of economic growth.
The International Monetary Fund projects real gross domestic product (GDP)
growth rates of 4,8 percent and 5,9 percent for sub-Saharan Africa in 2006 and
2007 respectively. However, to attain the poverty MDG to halve the population
of people living on less than US$1 a day, the subcontinent will need to
accelerate annual GDP growth to at least seven percent.
The primary mandate of the SARB is the achievement and maintenance of price
stability. Indeed we are of the firm view that the best contribution that the
SARB through monetary policy, can make towards the attainment of high and
sustainable rates of economic growth and employment creation is keeping
inflation at low levels thus contributing to the achievement and maintenance of
overall macro-economic stability. We target the inflation rate and not any
other economic variable and currently our key task is to maintain consumer
inflation excluding the effects of mortgage rate change (CPIX) inflation which
is headline inflation less mortgage interest costs within a range of between
six to three percent. Since September 2003, CPIX inflation has been contained
within this range and has averaged 4,0 percent for the past two years.
Going forward the SARB remains resolute in the implementation of our mandate
and we are keeping a close eye on inflation developments. If in the view of the
Monetary Policy Committee (MPC) the inflation target is being threatened by
inflationary pressures then the MPC will have the courage of its conviction to
do the correct thing even as we enter the festive period. It is worth stating
here that there is no rule that we are aware of which prohibits changes to the
monetary policy stance just before Christmas. As the case might be the MPC will
discharge its responsibilities in the event that inflationary pressures
persist. Once again our message is that we should all try to tighten our belts
no matter how wide or narrow our waistlines might be.
5. Conclusion
Let me conclude by posing a rhetorical question, "In the face of these
enormous socio-economic challenges, should the private sector stay in its
comfort zone and focus only on growing shareholder value?" Most certainly not.
Many South African companies are already involved in large community social
investment programmes. These could be expanded and become more focussed as some
do on facing up to the challenge of improving the lives of ordinary people.
According to a recent study(1) for every US$1 invested in water supply and
sanitation, the direct and indirect benefits range from US$1 to US$34 depending
on the region and level of intervention. Indeed investments targeting the poor
have the highest marginal benefit.
Investing in water, we would suggest, is therefore good business. Your
support today will go a long way towards contributing to meeting the MDGs
particularly the reduction of poverty.
Thank you for your attention.
Issued by: South African Reserve Bank
14 November 2006
Source: South African Reserve Bank (http://www.reservebank.co.za/)