More than 2.6 billion people still do not have access to proper sanitation and dirty water claims more lives than AIDS or conflicts, according to the UN's annual Human Development Report which is being released in South Africa.
The report's chief author Kevin Watkins said that 1.8 million children die each year from diarrhoea brought on by dirty water.
"This is five times the number of children dying from HIVAIDS," Watkins told reporters.
"What is clear is that clean water and sanitation is just about the most important vaccine for improving public health and economic growth," he added.
The report highlighted public health situation in slum areas of Africa, including Kibera in Nairobi where rudimentary sanitation meant many residents had to resort to 'flying toilets'.
"People defecate in plastic bags and throw them into the street because they have no other option," said Watkins.
The lack of water and sanitation keeps children out of school, either from water-related diseases or because they are forced to walk long distances to help collect water for their families.
Aside from the human costs, and the loss of productivity, economic growth is stunted to the extent that it outweighs international aid.
In a foreword to the report, the United Nations Development Programme (UNDP) administrator Kermal Dervis said "flawed water management policies that exacerbate scarcity" rather than lack of supply lay at the root of the crisis.
"Access to water for life is a basic human need and a fundamental human right," he said.
"The ill health associated with deficits in water and sanitation undermines productivity and economic growth, reinforcing the deep inequalities that characterise current patterns of globalisation and trapping vulnerable households in cycles of poverty."
The report also warned that access to water would likely become ever more problematic as a result of global warming.
"In sub-Saharan Africa the combination of rising temperatures and declining rainfall leads to extended drought episodes and limited surface water," it said.
"Climate change is not a future threat, but a reality to which countries and people have to adapt ... The livelihoods of millions of people will become more precarious as rainfall patterns become more variable and, in some cases, water availability declines."
The report also found that development in sub-Saharan Africa has stagnated with no sign of improvement, mainly due to the effects of HIVAIDS which has slashed 20 years off life expectancy and hitting women ever harder.
"Due to the feminisation of the HIVAIDS epidemic, in Botswana, Lesotho, South Africa and Swaziland the life expectancy of women will be two years less than that of men," read the report.
African countries accounted for all 20 of the countries with the lowest rating in a human development index which was topped by Norway, Iceland and Australia.

Copyright AFP (Agence France-Presse), 2006