Louis van Wyk, Technical Director, Nestlé East & Southern Africa Region
Water security has increasingly become a defining factor shaping the future of economies, cities, and, most critically, food systems. Rising demand and growing pressure on water resources now require coordinated action from governments, the private sector, and civil society to address challenges that threaten sustainable and reliable supply. For governments in particular, water security is a fundamental indicator of their ability to sustain economic growth, safeguard livelihoods, and ensure long-term development.
South Africa has made tangible progress in expanding water and sanitation access, supported by a robust policy and regulatory framework. Yet these achievements coexist with deep structural challenges. The country continues to struggle to balance the competing needs of agriculture, industry, forestry, the environment, and domestic households.
Recent assessments show that South Africa loses 47% of its treated water before it even reaches consumers due to leaks, ageing pipelines, and inadequate municipal maintenance. This loss far exceeds the global average of around 30%, underscoring the severity of systemic inefficiencies within the water distribution network. For manufacturers who depend on consistent pressure and quality, these losses translate directly into production stoppages, higher operational costs, and reduced output.
The economic consequences of deteriorating water security are substantial. Municipalities reported R14.89 billion in water losses in just one year, highlighting the scale of non-revenue water draining the economy. Simultaneously, national estimates indicate that R400 billion is required to rehabilitate and modernize South Africa’s water and sanitation infrastructure. This investment gap signals both a challenge and an opportunity: failing to close it will intensify supply interruptions, but addressing it could catalyse economic stability and unlock new industrial capacity.
Macroeconomic modelling provides a sobering picture of how water scarcity affects growth. A computable general equilibrium (CGE) model projects a GDP decline of between −0.34% and −0.44% by 2030 if water scarcity continues unchecked. For a sector as energy- and resource-intensive as manufacturing, this drag on economic performance manifests through reduced demand, supply-chain inefficiencies, and declining investor confidence. Moreover, water scarcity is expected to reduce household welfare by 0.26% to 0.47%, negatively affecting consumption patterns that manufacturers rely on for growth.
The risks are felt acutely, across essential industrial hubs. These challenges are not theoretical, they are lived realities for operations in key industrial hubs such as Estcourt, Harrismith, and parts of Gauteng, where failing municipal systems routinely disrupt industrial performance. Even advanced manufacturers struggle to remain competitive when forced to stop production to wait for municipal pumps to recover pressure.
South Africa stands at a critical inflection point where the intersection of water security and manufacturing output increasingly determines the country’s prospects for sustained economic growth. While manufacturing remains a pillar of the national economy. Contributing 13% to GDP and forecast to grow at an average of 5.7% annually over the next decade, the sector’s performance is being tested by deepening structural constraints, none more urgent than the escalating water crisis.
Yet, within this crisis lies an inflection opportunity. Leading manufacturers, including major food and beverage producers, are pioneering adaptive strategies that offer scalable models for national resilience. Examples include the deployment of zero-water technologies, wastewater reuse, solar-powered groundwater systems, and precision irrigation savings such as a 240,000 m³ reduction achieved at essential sites through soil-moisture probes and efficient agricultural practices. These efforts demonstrate how improved water efficiency reduces withdrawals, limits wastewater generation, and mitigates environmental impact, aligning with emerging global sustainability trends and investor expectations.
South Africa’s pathway to economic revitalisation will depend on how effectively the country can stabilise water systems in high-risk industrial nodes, modernise aging infrastructure, and incentivise efficiency-driven innovation across value chains. Manufacturing competitiveness cannot be decoupled from water security. The countries and companies that recognise this linkage and act decisively will define the next era of inclusive and sustainable growth.
Water security is not merely a service delivery issue; it is the foundation of industrial capability, job creation, and long-term economic stability. South Africa’s manufacturing future depends on decisive action to protect and strengthen this most essential resource.
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