Experts Seek New Financing Architecture to Unlock Private Investment in Africa’s Water, Sanitation Sector

Development experts and stakeholders in the Water, Sanitation and Hygiene (WASH) sector have called for a fundamental overhaul of the financing architecture underpinning water and sanitation services across Africa, arguing that the continent’s persistent infrastructure deficit is not primarily a funding problem but an institutional failure that continues to discourage private investment.

This position is contained in a concept note proposing the establishment of a Private Sector Engagement Platform (PSEP) under the WASH Finance Foundation, designed to bridge the gap between governments, investors and technical partners in the delivery of water and sanitation infrastructure.

According to the document, despite significant advances in technology, engineering and global development financing, more than 600 million Africans still lack access to reliable and safe water, while nearly twice that number are without basic sanitation services.

The note argues that the challenge is not caused by a lack of capital or technical expertise, but by the absence of the institutional structures required to channel existing resources into sustainable infrastructure projects.

“The gap is not a funding problem. It is an architecture problem,” the document stated, stressing that while capital, technology and political commitment exist, they remain disconnected by weak regulatory frameworks, inadequate investment structures and the absence of commercially viable market conditions.

The authors noted that achieving Sustainable Development Goal 6, which seeks universal access to safe water and sanitation by 2030, requires an estimated $114 billion in annual investment globally—far beyond what can be financed through official development assistance alone.

They argued that attracting private investment has become unavoidable if African countries are to meet growing demand for water and sanitation services.

Nigeria, according to the concept note, presents one of the continent’s largest untapped opportunities, with its sanitation economy projected to reach $26 billion by 2030. Yet much of this potential remains unrealised because investors face significant barriers ranging from regulatory uncertainty to weak revenue frameworks and limited access to risk mitigation instruments.

The proposed Private Sector Engagement Platform is envisioned as a neutral institution that would help create bankable projects, standardise investment frameworks and facilitate collaboration among governments, financiers and private operators.

The document draws lessons from sectors such as telecommunications, energy, healthcare and affordable housing, which successfully attracted billions of dollars in private capital after governments established clear regulatory environments and commercially viable investment frameworks.

It cited Africa’s telecommunications revolution as a prime example of how private capital can transform infrastructure delivery when supported by independent regulation, predictable licensing systems and enforceable contracts.

“Governments did not build the networks. They built the conditions within which private capital built the networks,” the report observed.

The concept note also pointed to South Africa’s renewable energy programme, which attracted billions of dollars in investment through standardised contracts and clear procurement structures, demonstrating how institutional reforms can unlock long-term infrastructure financing.

In contrast, the WASH sector continues to rely heavily on donor-funded projects, many of which struggle to remain functional after funding cycles end.

The document warned that without reforms, communities across Africa would continue to experience a recurring pattern in which water and sanitation facilities deteriorate once external support is withdrawn.

Experts behind the proposal identified several major barriers discouraging private participation in the sector, including unreliable revenue streams, politically controlled water tariffs, weak utility finances, regulatory uncertainty and the absence of effective risk-sharing mechanisms.

They argued that investors are often unwilling to commit capital because there are no reliable off-takers capable of guaranteeing predictable returns over the long investment horizons required for water and sanitation infrastructure.

The report concluded that the future of Africa’s water and sanitation sector will depend less on securing additional donor funding and more on building the institutional architecture necessary to attract and sustain private investment.

According to the authors, unless governments and stakeholders move decisively to create commercially viable frameworks for investment, the continent risks falling further behind in its efforts to achieve universal access to safe water and sanitation.

“The engineering is ready. The political commitments exist. The financial instruments are available. The private sector is willing. What has been missing is the institution that connects them,” the document stated.