Freshwater scarcity is emerging as a serious economic threat, putting millions of jobs and the livelihoods of vulnerable communities at risk, according to a new report by the World Bank.
The Global Water Monitoring Report highlights that dwindling water reserves are not only altering ecosystems but are increasingly influencing employment, especially in countries where agriculture is a major source of income.
The report estimates that the world loses roughly 324 billion cubic meters of freshwater every year, enough to satisfy the yearly needs of around 280 million people.
These figures reveal that water shortages are no longer just an environmental concern—they are now a pressing economic challenge that could undermine development progress across the globe.
Over the last twenty years, the depletion of freshwater has intensified, affecting labor markets in multiple ways. On the supply side, limited access to clean water reduces productivity by compromising health, nutrition, and human capital development.
Workers may lose hours to fetching water or caring for those who fall ill, while waterborne diseases and drought-induced malnutrition further lower output.
“About 80 per cent of the world’s poor live in rural areas and rely heavily on farming, which requires reliable access to water for crop cultivation,” the report reads. Agriculture employs about 1.23 billion people worldwide, and in regions such as South Asia and Sub-Saharan Africa, over half of the workforce depends on farming. In these areas, droughts can quickly shrink job opportunities, leaving entire rural communities economically vulnerable.
Water scarcity also hits the demand side, reducing productivity in water-dependent sectors including agriculture, energy, manufacturing, tourism, and transportation.
This decrease in output leads to fewer jobs and lower incomes, affecting workers across industries. Globally, nearly 78 per cent of jobs are influenced by water availability, with 42 per cent highly dependent on it.
In Sub-Saharan Africa, droughts have been linked to a reduction of 2.5 percentage points in overall employment, with rural farming areas experiencing losses of up to 7.5 percentage points.
“Given the frequency of dry shocks, this effect translates to approximately 600,000 to 900,000 individuals in Sub-Saharan Africa being jobless each year as a result of exposure to dry shocks between 2005 and 2018,” the report states. Women, older individuals, low-skilled workers, and landless farmers are among the hardest hit.
The World Bank stresses that urgent reforms are needed to prevent communities from reaching a tipping point. It recommends better water management, effective monitoring systems, fair pricing that reflects scarcity, water accounting, and the use of technology to track availability in real time. Coordinated trade and water policies are also crucial to securing resources and sustaining livelihoods for the future.
