Water has been called the dividing line between poverty and prosperity, and is a cross-cutting tool for the achievement of the Millennium Development Goals (MDG). The primary target group of the MDG is the rural and peri-urban poor in developing countries, whose diversified livelihoods depend strongly on water. Water use at the household level is typically for meeting basic needs (e.g. bathing, drinking and sanitation). However, a vital and growing use of water that is not usually planned for is made up of those activities at the household level that promote economic growth and advance sustainable livelihoods. This is known as the ‘productive use of water’. Since 1994, considerable  improvements have been made in water service delivery. Just over 37 million (84.5 %) of South Africans now have access to piped water in their dwellings, on site, or from communal taps. However, rural water service delivery is still a major challenge. Rural areas also tend to be more susceptible to drought, making access to natural water supplies even more vulnerable. The development focus of the South African state demands that efforts be made to improve the condition of the urban and the rural poor. [authors abstract]