Water underpins the whole of Africa’s economy, be it municipal, agricultural, industrial or mining, and is, unfortunately, often a critical factor in limiting economic growth or peace and stability. Aside from the issues of poor health, inadequate water and sanitation infrastructure debilitates the continent’s potential. This happens by making life difficult for businesses, which have to contend with daily problems relating to security of supply for economic activity and international investors who are simply put off by not being able to drink tap water in hotels when exploring business development opportunities. But such observations are glib in light of the significant public health difficulties imposed on millions of Africans, which result from the lack of environmental regulation in the sector.

In the municipal supply sector, there is a long history of aid-related water schemes in Africa, from the micro to macro scale, which have met with varying degrees of success. Examination of the success of privatesector participation in both rural and municipal supply is presented, along with an analysis of where projects have encountered difficulties. The rise of food and commodity prices has delivered the economic justification to develop a better understanding of the water economy in Africa. The argument for Africa to develop an understanding of the wider water economy, to ensure profitable and sustainable development, is presented in relation to agricultural and industrial use. Consideration is also given to the role of water in conflict mitigation.

The benefits and pitfalls of water in the industrial economies of Africa, namely mining and hydrocarbon exploitation, are considered, along with a discussion on the need to understand the environmental regulatory framework for the water economy.

C onclusions are drawn in relation to how water underpins all of Africa’s economic activity along with a summary of the key points that need to be considered by policymakers in developing the continent’s potential.