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Governing water loss: Denmark’s water success offers SA a governance lesson, not a blueprint

South Africa loses 47.3% of its treated municipal water, while Denmark loses just 7.8%. The real difference is not technology alone, but institutions that make water loss measurable, accountable and financially consequential.
Dr Anthony KaziboniBy Dr Anthony KaziboniSeptember 2, 2026No Comments
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  • South Africa loses nearly half of its treated municipal water, trapping municipalities in a cycle of declining revenue, deferred maintenance and deteriorating infrastructure.
  • Denmark keeps water losses low through strong governance, using accurate measurement, transparent reporting, benchmarking and financial incentives to drive accountability.
  • South Africa’s solution is not to copy Denmark, but to build institutions that distinguish neglect from incapacity and make water loss genuinely governable.

I am writing this from Odense, where I have spent the past week participating in workshops and other activities for the SDU, UJ and UCT COM-PRES project.

As a researcher interested in hydropolitics and acutely aware of South Africa’s water crisis, I have been struck by Denmark’s water governance system. The country is routinely held up as a success story—and the numbers support that reputation.

South Africa is a water-scarce country that loses almost half of the treated water entering municipal distribution systems. National non-revenue water stands at approximately 47.3%, according to the latest official reporting. Denmark, by contrast, reports average water losses of about 7.8%.

On the surface, this difference can be explained technologically: Denmark has accurate meters and sophisticated monitoring, while South African municipalities have ageing infrastructure and insufficient technical capacity.

The picture is more complex. Denmark does not maintain low water losses simply because it possesses superior technology. It does so because its governance system makes water loss visible, financially consequential and institutionally difficult to ignore.

The anatomy of non-revenue water

Non-revenue water is water placed into a distribution system for which a utility receives no revenue. It includes physical leaks as well as apparent losses caused by inaccurate meters, illegal connections and poor billing.

In South Africa, the national NRW rate increased from approximately 37% in 2014 to 47% in 2023, according to the Department of Water and Sanitation’s 2023 No Drop assessment. This means that the country is not merely losing water; municipalities are also losing the income required to operate, repair and renew their infrastructure, which runs into the billions of rand.

The result is a vicious cycle. Water is lost through poorly maintained systems. Municipalities cannot bill for the missing water. Declining revenue weakens their ability to undertake maintenance. Infrastructure deteriorates further, producing additional leaks, interruptions and financial losses. Residents experience this institutional cycle as dry taps.

How Denmark makes water loss governable

Denmark’s experience demonstrates that this cycle can be interrupted. Danish utilities whose water losses exceed 10% of distribution face a financial penalty, and utilities are required to meter consumption and report performance data systematically. Since 2011, economic regulation of the sector — administered by the Danish Competition and Consumer Authority — has combined statutory revenue caps with benchmarking, so a utility’s permitted revenue is tied to comparative efficiency rather than fixed by historic cost.

Danish utilities divide networks into monitoring zones, and measure flows during low-consumption periods to identify unusual losses. Leaks are repaired quickly and problematic pipes replaced proactively.

These measures are often presented as a catalogue of technical best practices. Their real importance lies in how they fit together institutionally. Measurement establishes where water is being lost. Reporting makes performance comparable. Financial incentives make poor performance costly. Utility revenue supports maintenance. Technical systems allow staff to intervene before minor leaks become major failures.

South Africa’s institutional and measurement gap

South Africa already knows most of the technologies involved. Its difficulty lies in constructing institutions capable of using them consistently.

Municipalities frequently lack accurate water balances, functional bulk meters and reliable asset registers. Maintenance is deferred until infrastructure fails, and emergency repairs consume funds that could have supported planned renewal. The Department of Water and Sanitation identifies neglected maintenance, illegal connections and weak billing and revenue collection as major causes of NRW.

This is also a measurement problem, not only a governance-outcome problem: Denmark’s 7.8% is anchored in near-universal customer metering, while a meaningful share of South Africa’s 47.3%, the illegal-connection and non-functional-meter components in particular, is estimated rather than directly measured. The two national figures describe the same category of loss, but they do not carry the same evidentiary weight, and that gap is itself a symptom of the institutional weakness this piece is describing.

New infrastructure is also politically more attractive than maintenance. Politicians can open a reservoir, treatment plant or pipeline. There is no ribbon-cutting ceremony for a pipe that did not burst because it was replaced in time.

Procurement further complicates the problem. In dysfunctional municipalities, recurrent infrastructure failure can generate opportunities for emergency contracting, inflated repairs and politically connected service providers.

This is an inference from the incentive structure rather than a claim about any specific municipality, but it is a plausible one: a tenderpreneurial economy of this kind rewards repeated breakdown rather than durable maintenance. The people benefiting from failure are not necessarily those tasked with ending it.

Why Denmark cannot simply be transplanted

Denmark nevertheless cannot simply be transplanted into South Africa. The countries have profoundly different fiscal capacities, settlement patterns, institutional histories and levels of inequality. South African municipalities also inherited spatially unequal infrastructure shaped by colonialism and apartheid.

Some maintain extensive networks across large, dispersed and rapidly growing settlements, while facing poverty, weak revenue bases and shortages of specialised personnel.

A uniform financial penalty for excessive NRW could, therefore, deepen failure in already distressed municipalities. Punishing a municipality without correcting its structural and technical constraints may reduce the resources available for improvement. South Africa needs differentiated intervention: credible consequences for avoidable neglect and corruption, but intensive technical and financial support where incapacity is genuine.

This distinction can be operationalised rather than left as a slogan. The Auditor-General’s local government audit outcomes and MFMA irregular-expenditure findings already distinguish, in effect, between municipalities where water losses coincide with poor financial management and procurement irregularities and municipalities where losses coincide with genuine fiscal and technical constraint.

A differentiated regime could tie conditional grant support, ring-fenced revenue protection and phased loss-reduction targets to that distinction, reserving harder measures, such as conditions on equitable-share transfers, for municipalities where the evidence points to neglect rather than incapacity.

Making water loss governable in South Africa

The Danish lesson is thus not that every South African municipality should purchase smart meters or import Scandinavian technology. It is that water loss must become governable.

This requires verified municipal water balances, district-level metering, public loss-reduction targets and transparent repair times. Water-service revenue should be protected for maintenance and renewal. Municipalities should be assessed on preventative maintenance, not simply capital expenditure. Procurement should prioritise lifecycle quality and contractor performance.

Water justice is not automatic

We must also avoid assuming that reducing NRW will automatically produce water justice. A municipality can save water while continuing to distribute it unequally. Affluent households can protect themselves through tanks, pumps, boreholes and bottled water. Poor households absorb interruptions through queues, missed work, unpaid care and dependence on unreliable tankers. Formal access figures themselves conceal large geographical inequalities and unreliable supply.

Recovered water and revenue must, therefore, be deliberately directed towards communities experiencing the least reliable services.

The real governance failure

South Africa’s water crisis is commonly described as a crisis of scarcity, ageing infrastructure or insufficient engineering skills. It contains all these elements. But Denmark shows that pipes do not maintain themselves, data do not enforce themselves, and technology does not create accountability.

Water reaches households reliably when institutions are organised to make that happen. When nearly half of treated municipal water disappears before it can generate revenue, the country is not confronting an unfortunate technical problem. It is confronting a governance failure whose costs are carried most heavily by those least able to escape it.

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The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of Conviction.co.za

Denmark water governance Governing water loss municipal infrastructure Non-revenue water South Africa water crisis
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Dr Anthony Kaziboni

Senior researcher, Centre for Social Development in Africa, at the University of Johannesburg. He writes in his personal capacity, and the views expressed are his own and do not represent the Centre for Social Development in Africa or the University of Johannesburg.

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Governing water loss: Denmark’s water success offers SA a governance lesson, not a blueprint

By Dr Anthony KaziboniSeptember 2, 20267 Mins Read

Denmark’s remarkably low water-loss rate is not simply a technological achievement. It is the product of governance systems that make non-revenue water measurable, transparent and financially consequential, offering South Africa lessons in accountability rather than imitation.

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