This economist has no reason to be optimistic on World Water Day

Published on: 23/03/2016

The World Bank estimates that to achieve universal coverage in the water and sanitation sector by 2030 will cost between US$ 14 and US$ 47 billion per year – and that’s just to extend WASH services to the unserved. This amounts to up to three times the current investment levels [1]. What’s more, these figures do not take into account recurrent costs for maintaining existing services – which is estimated to add up to more or less the same yearly investment as the capital expenditure (i.e. new systems).

The problem goes beyond the absolute amount of funding and where it is directed, and also includes the rate of growth of investments. The latest data from WASHwatch [2] shows that in Sub-Saharan Africa we are off track to meet the goals and the rate of growth in investments is too slow. Present levels of investment will not allow us to reach universal coverage for water or sanitation by 2030. With the notable exceptions of Bangladesh and Thailand, inequalities in access to WASH services have not decreased since the 1990s [3] .

Historical data tells us that countries have typically reached (near) universal rural water coverage when they reached a GDP per person of between US$ 5,000 and 8,000. Yet looking at macro-economic projections and assuming that countries maintain a 5% economic growth the next 15 years, it is clear that 29 countries will not have reached the US$ 5,000 GDP per person mark by 2030 and 45 countries will have not reached the US$ 8,000 per person mark.

The missing pieces

At the Sanitation and Water for All Ministerial meetings this past week in Addis Ababa [4], 40 ministers from Africa, Asia, Latin America and the Middle East met to discuss implications of the SDGs on planning and funding the sector for the next 15 years. The success stories presented from Malaysia and South Africa show that sustained services for all became possible through injections of public finance and cross subsidies. See other examples of how rich countries did it in this briefing note.

It was a relief to see public finance and subsidies mentioned during Bill Kingdom’s presentation on World Bank financing at the SWA meeting. His presentation went back to basics focusing on taxation as a fundamental source of funding for essential services. Despite mention by the World Bank, taxes and domestic resource mobilisation were missing from the narrative and proposals from low and middle income countries at the SWA meeting last week. Nothing is a stronger showcase of government leadership than being able to raise domestic sources of finance. In fact, that may be the only way to reach to the SDGs but that means fixing the systems and the institutions that allow taxes to be collected fairly and used efficiently in providing water and sanitation for all NOW.

Given the low levels of GDP of some countries, 0.5% of GDP allocated for sanitation (as per the Ngor declaration), will not, in absolute terms, be enough to pay for basic services. However, for lower middle income countries taxation will generate significant amounts enabling for instance a shift from aid grants to leveraging other financing sources and accessing loans. This would also imply that grant funding would need to shift and focus on the poorest countries or the areas where inequalities are higher.

The other aspect that contributes to my pessimism is the general lack of accountability for funding spent in the sector. This has not changed much the last five years. The latest SWA-HLP progress report finds that financial commitments to tracking and allocation have made very slow progress [5]. How can countries say they need more money when very few can track existing budgets, financing for the sector or demonstrate that sustained services are being achieved? Most countries which are off track to meet the SDGs don’t even know how many service providers they have, where the water and sanitation infrastructure is located and if they are working properly.

In countries where there is no accountability for the levels of service being provided over time (see for instance Tanzania with a decrease in rural coverage despite massive injections of funds over the last 10 years), civil society organisations will need to be more vocal and use evidence to collaborate and support national and local governments and help them fulfill their mandate.

Where is the evidence for them to use? At least in part in the many donor audit and evaluation reports that are never publicly shared.

International NGOs need to start demanding that donors make these reports public. Local NGOs and CSOs need to start using the data and information to find joint solutions with governments. This is an important ingredient to accelerate change in the sector. And then maybe, we might reach the SDGs for the water sector.

Thank you to Stef Smits for the GDP analysis and access to services and thank you to Thilo Panzebieter the SWA Northern Civil Society representative for the daily summaries from SWA and Patrick Moriarty the SWA steering committee member representing the knowledge sharing organisations for the daily tweets and sound bites.