The Middle East and North Africa (MENA) is not only suffering from water shortages and water scarcity, but the inadequate supply of and poor management of water is also costing the region around US$21 billion per year in economic losses, according to a new World Bank report.

Of all the challenges the Middle East and North Africa faces, a water crisis is the one that they are least prepared for. MENA is “a global hotspot of unsustainable water use,” according to the report – more than 50% of current water withdrawals exceed sustainable limits in some countries.

Inadequate governance arrangements, undervalued water, weak enforcement and increasing consumption is resulting in the wholesale depletion of all water resources, including groundwater. Added to this are unmanaged trade-offs in the water-energy-food nexus, which are also contributing to an overexploitation of water resources.

An estimated $10 billion annual welfare gain is possible by merely improving the way in which water is stored and delivered to users of irrigation water, according to the report. Storage and efficient delivery of all the available surface water allocated to irrigated agriculture in the MENA would see agricultural production increase by 1% to 8% – the variability in production of some commodities would decrease.

Unless measures are taken to improve the management and distribution of scarce water resources, there is little hope for growth and stability in the region. Limited water resources need not restrict the region’s future, however; a combination of technology, policy and management can convert scarcity into security.

According to Hafez Ghanem, World Bank Vice President for the Middle East and North Africa:

“If we think of water resources as a bank account, then the region is now seriously overdrawn. Drawing water from rivers and aquifers faster than they can be replenished is equivalent to living beyond one’s means, and it undermines a country’s natural capital, affecting longer-term wealth and resilience. But there are solutions, and they start with clear incentives to change the way water is managed.”

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