Water is Life: Can Boreholes Sustain Life?

I once worked for a multi-million dollar donor project in which borehole drilling was one of the major components of the project portfolio. This project was and probably continues to be a key player in the water sector in Malawi. In 2001 we were seriously considering the sustainability questions of boreholes as a strategy for provision of potable water to Malawian communities. Apart from problems of maintenance, it was a general view of the organization that, we needed to be careful in terms of how many new boreholes we were going to continue drilling for water provision in communities. One key point was clear, in a lot of areas boreholes have to be sunk more than 40 metres into the ground for them to provide water. This in many areas of Malawi entails drilling into the aquifer, which is the ground rock layer that holds water.

Perhaps an understanding of the aquifer will be appropriate here. “...When a water-bearing rock readily transmits water to wells and springs, it is called an aquifer. Wells can be drilled into the aquifers and water can be pumped out. Precipitation eventually adds water (recharge) into the porous rock of the aquifer. The rate of recharge is not the same for all aquifers, though, and that must be considered when pumping water from a well. Pumping too much water too fast draws down the water in the aquifer and eventually causes a well to yield less and less water and even run dry. In fact, pumping your well too fast can even cause your neighbor's well to run dry if you both are pumping from the same aquifer" (http://ga.water.usgs.gov/edu/earthgwaquifer.html).

According to Wikipedia, "Aquifer depletion is a global problem, and is especially critical in northern Africa; see the Great Manmade River project of Libya for an example".

In recent times, concern has been raised on the sustainability of boreholes. People have begun questioning the wisdom of continued drilling of new boreholes without careful consideration of the impact on the aquifer, which could have long-term negative environmental consequences, such as the depletion of the aquifer and resultant negative environmental effects. The level of recharge of the aquifer is slow in many areas in Malawi owing in part to low rainfall. As such, if the aquifer is depleted in a particular area it can lead to the drying up of rivers. It is however true that the demand for boreholes as a source of potable water is very high in Malawi – there is a common saying that “water is life”. In part, this high demand is due to the fact that of all the available strategies, boreholes constitute the easiest project to request from donor agencies and Government. In addition, boreholes produce quick tangible results – potable water. If you are a politician in Malawi, boreholes are perhaps the easiest vote-winning development projects – “umangoti mukuona zitsime ndabweretsa” (do you see how many boreholes I have brought in this community), and clearly water is life - people will give you votes. But the tendency is to oversupply boreholes in particular communities, and most, if not all these boreholes are breaking into the aquifer. The potential consequence is what I have alluded to above.

The following alternatives sources of water are proposed to avoid potential negative environmental effects of boreholes: First, in many places in Malawi boreholes already exist, and all that is required is their rehabilitation. A borehole rehabilitation programme can minimise the sinking of new boreholes, thereby not only contributing to efficient use of available resources but also reducing the overexploitation of the aquifer. Secondly, there is need to harness surface water through a) construction of dams, which can then supply water to communities; b) rain water harvesting. These two sources do not have any potentially negative effects on the aquifer, in fact they help to recharge it.

In conclusion, boreholes should be considered as a short-term solution for provision of potable water while surface water should be harnessed for as a long-term and sustainable strategy.

Kennedy Lweya, PhD

Should we borrow money for consumption?

In Microfinance discourse, there are often conflicting views on whether or not the poor should be allowed to borrow money for consumptive purposes. This article explores this debate and concludes that borrowing for consumption can be complementary to borrowing for production.

Microfinance is the provision of financial services to the low income categories of people - generally the poor. These services include micro-loans, savings, remittances etc. One of the main successes of microfinance is the ability to provide the poor with these services without attaching the traditional strings that you find in the formal financial sector - the banks. In this case, as has been shown in by the Grameen Bank in Bangladesh, Bancosol in Bolivia and Self-Help Groups in India, microfinance has enabled the poor to access flexible financial services such as small loans to meet not only their productive needs such as capital for small businesses but also their consumption needs such as paying for dowries, buying medicines, food and clothing. In line with Maslow's hierarchy of needs, if microfinance insists on providing loans only for productive purposes, they would re-enforce the traditional view of serving the non-poor. This is so because the non-poor in most instances have already met their basic needs - food, shelter, and can thus borrow for productive purposes only. On the other hand if you have to enable the poor to move out of the poverty trap, then they should have access and be allowed to borrow even for consumptive purposes. There are seasonal trends in terms of financial positions of the poor - at some point of plenty, for example at crop harvest time, they can save up and can afford to meet their consumptive needs from these savings. However, at other times, such as during the planting season they are short of income and thus may need support, which means allowing and encouraging the poor to borrow for consumptive needs in addition to productive needs.

The issue of flexibility and defying traditional financial thinking is what has led to "the microfinance revolution" where it is an old school of thought to "discourage people from borrowing for consumptive purposes". To reduce poverty we have to meet both the consumptive and productive needs of people. It is not foolish to borrow £500 in which £150 is used to buy clothing and food while £350 is invested in a micro-enterprise.

Kennedy Lweya, PhD

The Implications of Adaptations in Organisational Capacity and Cultures for the Provision of Microfinance In Malawi

The overarching Millennium Development Goal of reducing the global level of poverty by half by 2015 requires a concerted effort by all actors for it to be achieved - governments; the private sector; multi-lateral and bilateral agencies; civil society and the poor themselves. The potential contribution of pro-poor sustainable economic growth to this goal cannot be overemphasised. Microfinace, the provision of financial services, including loans, savings, insurance, remittances and other financial services to middle and low income categories has an importance role to play to achieve pro-poor sustainable economic growth.

What is the role for microfinance organisations? I have examined the implications of adaptations in organisational capacity and cultures of microfinance organisations (MFOs) in Malawi through an extensive research study. The premise of the study was based on three main turning points which impacted on the microfinance environment. First, ensuing macro-economic reforms following the adoption Structural Adjustment Programmes (SAPs) in Malawi in 1981; Second, political changes following the adoption of a multi-party democracy in 1993/94, and third, a new global paradigm shift towards commercialisation of microfinance.

A case study approach was used to study three different types of MFOs: a Government owned company - the Malawi Rural Finance Company (MRFC) originally the Smallholder Agricultural Credit Administration (SACA), an NGO - FINCAMalawi and a member owned credit union - the Malawi Union of Savings and Credit Co-operatives (MUSCCO). Using the concept of the cultural web, the study analysed the paradigm shift towards commercialisation among the three case study MFOs and its impact on micro and small enterprises (MSEs).

Changes in the macro-economic and political environment manifested by a competitive market and a pluralist political system triggered the dissolution of SACA due to its inefficiency, mismanagement and heavy politicisation. This led to the formation of MRFC. Whereas SACA pursued a 'welfarist' approach to financial service provision, MRFC adopted an 'institutionist' approach characterised by commercialisation of financial services. FINCA Malawi also pursued an 'institutionist' approach and continued to promote the "Village Banking" (VB) model. MUSCCO however, combined principles of both the 'welfarist' and 'institutionist' approaches. The study concludes with some learning points in the three MFOs' differential adaptations and commercialisation process: a government owned MFO shook off the image of its heavily politicised predecessor; an NGO operated as a "parallel" system to reach out to poor women, and a member owned MFO, coped with the changing environment by combining social and business principles. Therefore, provided there is a right balance, the culture of service and understanding of the poor, and banking can be complementary to each other for successful provision of microfinance services for the poor. However, the way this balance can be achieved may vary significantly according to the type of MFO and the context within which it is operating.

Kennedy Lweya, PhD