Releasing the flow: effective financing for water, sanitation and hygiene in Africa
WaterAid’s new report 'Releasing the Flow' concentrates on capacity to use available funds for water, sanitation and hygiene (WASH) in Ethiopia, Mozambique, Rwanda, South Africa and Uganda. John Garrett, WaterAid’s Senior Policy Analyst for Development Finance, discusses the factors the report suggests are key to WASH sector success.
Almost two and a half billion people are still denied their human right to sanitation, and the associated 2015 Millennium Development Goal (MDG) target has been missed by a wide margin. In view of this, it is unthinkable that funds available to tackle this crisis should go unused, but this is the reality in many countries. Despite the commitments and allocations of many governments and financial institutions, actual spending often falls short, failing to get to where it is needed most. At the beginning of the 2030 Agenda for Sustainable Development there can be few more urgent and important tasks for the international community than to eliminate the barriers preventing effective use of resources in the water, sanitation and hygiene sector.
WaterAid’s new report Releasing the Flow, based on research by Development Finance International, concentrates on capacity to use available funds for water and sanitation in five countries in Sub-Saharan Africa: Ethiopia, Mozambique, Rwanda, South Africa and Uganda. The research suggests that effective leadership from government – at national, regional and local levels – is a key factor for success. All case studies show evidence that strong political will has translated into positive action on absorption of funds, greater transparency and improved water and sanitation services. Other critical factors include the availability of skilled human resources, the balance between recurrent and capital funding for local government, and the quality of coordination and communication between major stakeholders.
Specialist skills and balanced funding
Districts need sufficient staff with the appropriate technical skills to organise procurement and tenders, appraise bids by private companies and manage contracts. Qualified engineers, water scientists, technicians, artisans, plant operators and health inspectors are all needed for implementation of plans and operational management. Shortages of any of these specialists cause a bottleneck in financial absorption, project delivery and sustainable service management. If governments decentralise too fast, or if they do not decentralise the necessary budgets, this adds substantially to the pressure on districts and their ability to run an efficient, dynamic service.
The report shows that an imbalance in the type of funding available also causes major problems. Low recurrent budgets (for wages, salaries and operational activities) impact on the ability of districts in Ethiopia and Uganda to attract and retain good quality staff, particularly in rural areas. In South Africa, the number of engineers per 100,000 people has dropped from 20 in 1994 to three. Shortages of recurrent funds held up inspection and supervision of infrastructure budgets in Mozambique, delaying the release of subsequent funding. The imbalance between recurrent and capital budgets is often made worse in aid-dependent countries by donors and creditors providing their finance almost entirely as capital.
Coordination for absorption
Coordination between national governments and donors is especially important to ensure a high rate of absorption of donor funds. Differences in government and donor fiscal years, as in Rwanda, or in disbursement and procurement processes, can create confusion at regional or local level. In Ethiopia, the World Bank, DFID, AfDB and UNICEF used to channel their funds through separate streams, each with their own procurement and reporting requirements. Major improvements in financial absorption made under the Sector Wide Approach (SWAp) have harmonised donor and government funding streams and reduced the burden of compliance for regions and districts.
The Sanitation and Water for All Partnership has identified four ways in which developing countries and donors can improve the way in which they work together and achieve greater development effectiveness. These resonate strongly with the findings of this new research, and, if adopted, could make a significant contribution to the more effective use of available funds. In a world seeking to achieve a step change in the volume of development and climate finance, these behaviours are likely to prove critical to the success of the 2030 Agenda. They are set out below: