Virtual water: The key to equitable allocation?

Considering our exploration thus far of allocation challenges for both river basin and groundwater aquifer systems, exacerbated by variability under climate change, it sure seems that equitably distributing water is an insurmountable task given Africa's context. But what if this allocation challenge can be tackled without actually dealing with water itself? Today's post will analyse the potential of this idea - virtual water (VW) - and its manifestations on the continent.

What is it?

VW is "the water needed to produce agricultural commodities" - the trade thereof referring to the international exchange of these commodities, containing all the water required for its production embedded within. Instead of solely trading physical foodstuffs, water is therefore indirectly transferred, tying water with existing global trade networks, and using trade as leverage to ameliorate regional water deficits. To put into perspective the concept's significance: for each tonne of cereal grains imported, over 1,000 tonnes of water is spared locally for other uses (Earle, 2001). 

Figure 1: Virtual water refers to water embedded in food from its production process, and has become increasingly popular in policymaking (Source).

Crucially, this binds considerations of water not only with trade but with food production and other processes such as industry and energy - playing a commanding role in the realisation of a WEF nexus mentioned previously. After all, water's inextricability to food production, from irrigation and agriculture to supporting livestock, cannot be understated, with 83.1% of Africa's total water withdrawals occupied by agriculture alone.

VW in northern Africa

One regional manifestation of the VW trade is in northern Africa: a region with one of the largest water deficits globally, dominated by the arid Sahara Desert, and underlain by ground- and soil-water as its sole predominant freshwater source. Due to its natural aridity and groundwater inaccessibility, the region has largely been a net VW importer (Figure 2). 

Figure 2: VW balance of world regions, with reds indicating net VW importers and greens exporters (Source).

The Maghreb countries of Algeria, Tunisia, and Morocco north of the Sahara in particular lack sufficient water to irrigate 3.5 million acres of land and 26 million people. Since agriculture is predominantly rainfed owing to storage inadequacies, dryland farming here is especially susceptible to uncertainties by drought. Coupled with population growth and shifting diets towards more water-intensive animal-based products, governments in the region have geared their economies towards harnessing the VW trade's opportunities. The region has developed a fundamental dependence on VW imports predominantly from North America, with the Moroccan economy's dependence increasing 70-80% since 1986. Policy recognition of the VW trade's merits in northern Africa has lessened the severity of its deficits without inducing water sector reforms nor reliance on pricey solutions like desalination.

VW in the SADC

Whilst southern Africa on the whole is also a net VW importer, regional variation exists, with Zimbabwe and Zambia being net exporters. Yet, South Africa, the most water scarce by per-capita availability, also exports more water-embedded goods to neighbouring, better water endowed states than it imports. Given variable regional water endowments and South Africa’s relative scarcity, there have been calls for this current paradoxical and counterproductive VW trade dynamic to be recalibrated by shifting a percentage of agricultural production away from South Africa to countries like Mozambique and Zambia, which have higher grain-producing potential and more labour-intensive economies better suited for agriculture. Transforming to a net importer, South Africa's water woes could be ameliorated, while benefiting the SADC on the whole through more efficient utilisation of states' comparative advantages in both food production and water endowments.

Figure 3: Spatial flows in trade within the SADC in 2009 and 2027 (projected), with South Africa serving and remaining as the predominant exporter to the region (Source). 

But although this aligns with the SADC's goal for regional cooperation, such intra-regional trade is difficult to coordinate and alludes to a significant limitation of the VW trade. Not only does it develop cross-border dependency over water self-sufficiency, its benefits can only be realised by states with rich socioeconomic capacity to deal with a transition from local production to imports, with a macroeconomy and trade balance resilient enough to cope with sustaining this shift. While this may be applicable to South Africa's comparatively developed economy, water-stressed and food production reliant countries like Namibia may struggle to benefit. 

Conclusions

Despite the VWT trade proffering a viable alternative to technical approaches such as water transfer schemes so entrenched in water policymaking, it is certainly more useful for some regions than others, and potential for realising its full benefits politically much easier on paper than in practice.