This study uses a dynamic computable general equilibrium (CGE) model to assess the macroeconomic consequences of water scarcity in Nelson Mandela Bay (NMB), South Africa. The model, which incorporates a comprehensive representation of water resources, is calibrated using an updated social accounting matrix for policy simulations up to 2030. Forecasting a 17% increase in water scarcity due to population growth, climate change and poor resource management, the model predicts a 0.82% drop in NMB's GDP by 2030. Sectoral impacts vary, with water-related industries suffering the most severe effects. The model predicts persistently high unemployment rates and a 0.03% reduction in household consumption by 2030, disproportionately affecting low-income households. To mitigate these negative effects, policymakers should prioritize water saving initiatives and reduce non-revenue water.