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Dr John Wandaka, Chair of Kepsa Environment, Water and Natural Resources Sector Board during a private sector consultation workshop and launch of the water sector report in Nairobi. [Gerald Nyele, Standard]
The private sector and government have been urged to prioritise investments in critical water infrastructure projects, including wastewater treatment plants, irrigation systems, and flood mitigation measures, to secure Kenya’s economic future and food security.
Speaking at the launch of the final Kenya Water Resources Management Report, Dr John Wandaka, Kenya Private Sector Alliance (KEPSA) Chair of Environment, Water and Climate Change, said businesses must step up as both users and stewards of water resources.
“The private sector has a pivotal role in building sustainable water systems. Investing now will protect business continuity while ensuring long-term growth,” he said.
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The call comes as Kenya faces mounting water stress driven by climate change, rapid population growth, and increased urbanization.
According to the report, over 80 per cent of the country’s landmass is arid or semi-arid, placing enormous pressure on the existing freshwater resources and catchment areas.
Key economic hubs such as Nairobi, Kiambu, Machakos, and Mombasa which collectively contribute nearly 65 per cent of Kenya’s GDP are projected to face severe water shortages.
The country already loses an estimated USD 1.5 billion annually due to inadequate water supply, undermining its 10 per cent annual growth target, noted the report.
The KEPSA report, which was a joint study by Gatsby Africa and the Stockholm Environment Institute (SEI) highlighted the strategic role of private sector investments in water sustainability.
Findings show that without urgent action, water shortages in the Athi Basin could reach up to 99 per cent, while the Tana Basin faces deficits of up to 64%. Agriculture, which consumes the most water and supports 80 per cent of Kenyans, is especially at risk, raising concerns over food security.
The report emphasizes the need for climate-smart agriculture, efficient irrigation, wastewater reuse, seawater desalination, and better data-driven planning.
These measures could cut water demand in critical basins by up to 21 per cent and boost crop yields by 45 per cent by 2030. Businesses are also encouraged to adopt water recycling and catchment protection to mitigate risks, while innovative financing models such as public-private partnerships, blue bonds, and nature-based solutions remain largely untapped.
Kenya’s water sector is heavily funded by donor grants and loans, with the National Treasury reporting KSh 258.3 billion received from development partners between 2018 and 2024.
However, challenges including inadequate government counterpart funding, weak implementation capacity, and lengthy procurement processes have slowed progress.
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The National Water and Sanitation Investment Financing Plan identifies a KSh 995 billion gap that must be bridged to achieve universal access to safe water and sanitation by 2030.
Experts warn that water scarcity is no longer a distant threat but a current constraint on Kenya’s economic competitiveness and business viability. They argue that by shifting from water use to water stewardship, the private sector can safeguard investments, enhance sustainability credentials, and secure the country’s long-term growth.
According to the World Water Council, most of the Sustainable Development Goals (SDGs) will be imperiled without sound water management and adequate water supplies. The council notes that SDG 2 (Zero Hunger) will require substantial investment in the rehabilitation of surface irrigation systems, especially in Asia. SDG 3 on good health and wellbeing relies heavily on universal access to clean water and the safe disposal of household wastes.
SDGs 4 (quality education) and 5 (gender equality) depend on access to safe, segregated toilets in schools, colleges, and working spaces that is an aim of SDG 6. SDGs 7 (affordable and clean energy) and 8 (decent work and economic growth) imply sufficient water for hydropower generation and water for industrial processes and cooling thermal and nuclear power stations. SDG 11 (sustainable cities and communities) rests on installing sustainable water supply, sanitation and wastewater services, without which the world’s rapidly growing cities would become uninhabitable.
Despite its self-evident importance, investment in water infrastructure – in countries at all stages of development – is insufficient.
Traditionally, government spending and development finance flow first to “urgent needs.” Although water is foundational to nearly every aspect of the economy and daily life, it is seldom prioritized for action. This mismatch has led to chronic underinvestment, despite rising demand for water and growing climate risks.
Experts warn that, although water is critical to health, climate resilience and economic prosperity, it often lacks the crisis framing that drives rapid allocation of funds.
“Making the case for urgency around water resilience and its subsequent socioeconomic impact is now a critical first step to closing the investment gap.” It was noted during a July 4th 2025, leaders water forum.
The paradox is that water supports everything from agriculture to energy to digital infrastructure, but remains largely invisible in global investment strategies.
Despite being essential to nearly all industries, water firms rank low in global revenue and market capitalization. The World Bank cites a $7 trillion investment gap, while OECD data shows tariffs cover only 70 per cent of water service costs, with public funds making up the rest.
Meanwhile, the World Water Council reports that blended finance for water and sanitation makes up just 5 per cent of transaction volume and under 1.5% of mobilized commercial finance.
The leaders emphasized the need for a clear sizing of the water investment market, its focus areas and key actors as essential to mobilizing public and private capital and driving priority investments that deliver the highest socioeconomic and climate returns according to regional needs. This is in addition to devising data-driven frameworks for water resilience. “With a sharp view of what works and why, the water sector can shift from being an overlooked enabler to a key driver of sustainable growth, innovation and resilience across the broader economy.”
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