A review of the modelling of water values in different use sectors in South Africa

Abstract

In this article several economic studies undertaken to assist with the implementation of the National Water Act (NWA) No. 36 of 1998 are reviewed. In these studies the following procedures were applied to model water use: operational research, econometric analysis, input/output analysis, willingness to pay and the conceptual framework of water markets. Main use sectors are agriculture, forestry, municipalities (domestic consumption) and the environment. Water values estimated in the studies differ significantly between sectors, as well as between and within catchment areas. Most of the studies focused on irrigated agriculture as an important use sector in terms of water volumes, food production and capital investment. Input/ output analysis indicates that South African agriculture is a less productive user of water in terms of gross income generated per unit of water. Evidence suggests that industrial and domestic use place a high value on assurance of supply of current water consumption levels.

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