Thandanani Mbhele, Executive for Actuarial and Risk at PPS Short-Term Insurance
South Africa’s water disruptions are beginning to resemble the kind of systemic risk the country experienced during years of load shedding. What was once viewed as an intermittent service issue is increasingly affecting the ability of businesses and households to function day to day. As water infrastructure comes under strain in several regions, the consequences are starting to look familiar: interrupted operations, financial losses and growing pressure on already stretched municipal systems.
Recent data illustrates how widespread the problem has become. According to Statistics South Africa, more than half of South African households experienced water interruptions during 2024. In many cases these were not brief outages. Some households reported disruptions lasting longer than two days, while others experienced cumulative outages of 15 days or more over the course of the year. The situation has continued into 2026. In parts of Johannesburg, including suburbs such as Melville and Brixton, residents recently faced supply interruptions lasting more than two weeks after failures at pump stations and maintenance issues affecting Rand Water’s infrastructure.
The underlying problem is not only operational disruptions but also the condition of the broader system. Ageing pipes, leaking reservoirs and deferred maintenance mean that a significant share of treated water never reaches end users. Estimates suggest that more than 40% of water is lost through leaks and system inefficiencies before it reaches homes or businesses. As infrastructure deteriorates, even relatively routine maintenance can trigger prolonged supply interruptions.
For the economy, the parallels with electricity shortages are difficult to ignore. When water supply becomes unreliable, entire sectors feel the impact. Manufacturing facilities rely on consistent water supply for production processes, mining operations depend on it for extraction and processing, and food manufacturers cannot operate without strict sanitation and hygiene standards. When supply fails, production slows or stops altogether. The effects quickly move beyond individual businesses, creating knock-on disruptions in supply chains and affecting employment.
The consequences are not limited to industrial sectors. Office-based businesses are also vulnerable. When water outages affect sanitation facilities or building services, employees are often sent home, interrupting productivity in much the same way power cuts once did. Over time, these interruptions accumulate into measurable economic losses.
Government has acknowledged the scale of the challenge. Estimates suggest that South Africa faces a backlog of roughly R400 billion to repair and upgrade municipal water infrastructure. Years of underinvestment and maintenance delays have created systemic vulnerabilities that now require significant funding and long-term planning to resolve. The situation echoes many of the structural challenges that previously affected the electricity sector.
From a risk management perspective, the implications are becoming increasingly clear. Businesses and households can no longer assume that water supply will always be reliable. Instead, it is becoming another operational risk that needs to be actively managed.
Thandanani Mbhele, Executive for Actuarial and Risk at PPS Short-Term Insurance, says organisations are starting to reassess how water risk fits into their broader resilience planning. “Businesses and households now need to think about water supply risks in much the same way they once had to plan around load shedding,” he explains. “Contingency planning, alternative supply arrangements and on-site storage are becoming part of normal operational risk management.”
Insurance also forms part of that conversation, although it is important to understand where cover typically applies. Short-term insurance generally responds to sudden and unforeseen damage, for example when supply is restored and pipes burst, or when flooding causes damage to property and assets. It does not usually cover gradual shortages or the absence of municipal supply itself. That distinction means businesses should regularly review their insurance arrangements, particularly business interruption cover and the protection of key assets, and those assets that provide alternative water supply.
As water-related incidents become more frequent, the broader insurance environment may also evolve. An increase in claims linked to infrastructure failures, flooding or sudden pressure surges could influence how risks are assessed and priced in future, similar to trends already seen in areas such as climate-related risk.
What is becoming clear is that water reliability is no longer simply a municipal service issue. It is an operational, financial and risk management challenge that affects households, businesses and the broader economy. Just as organisations once adapted to the realities of load shedding, many are now beginning to rethink how they plan for a future where water supply cannot always be taken for granted.
ENDS
