No Reason to Be Optimistic on World Water Day

The World Bank estimates that to achieve universal coverage in the water and sanitation sector by 2030 it will cost between $14 and $47 billion per year - and that's just to extend water, sanitation and hygiene services to the unserved. This amounts to up to three times the current investment levels.
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The World Water Day 2016 was flooded with high hopes and a celebratory mood. Last year, the world leaders committed to the Sustainable Development Goals, yet there are no significant changes on the horizon. Are we going to achieve clean water and sanitation for all by 2030?

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 water, sanitation and hygiene (WASH) services to the unserved. This amounts to up to three times the current investment levels. 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). Clearly, present levels of investment will not allow us to reach universal coverage for water or sanitation by 2030.

The problem goes beyond the absolute amount of funding and where it is directed, and also includes the rate of growth of investments. With the notable exceptions of Bangladesh and Thailand, inequalities in access to WASH services have not decreased since the 1990s.

The missing pieces
At the Sanitation and Water for All Ministerial meetings in Addis Ababa where 40 ministers from Africa, Asia, Latin America and the Middle East met to discuss funding the sector for the next 15 years, taxes and domestic resource mobilisation were rarely mentioned. Yet, in the US, UK and South Korea sustained services for all became possible through injections of public finance and subsidies.

In the US, national and local governments were the driving force behind water and sanitation provision. Municipal bonds, and we are talking year 1840, were the major source of finance for investments. In cities, property taxes and tariffs for connection charges also played a role, but were still insufficient to meet investment requirements. For rural water supply, still today, government grants (subsidies) are the norm.

More recently, in South Korea, there was a nation-wide push and leadership for better well-being and modernity. The initial injection of funds in the 1960 (mainly from the US) was followed by rapid industrialisation and economic development. After the grants, taxes became an important source of fund for infrastructure investments and finally, tariffs have allowed the national water company to achieve full cost recovery in 2004.

Nothing is a stronger showcase of government leadership than being able to raise domestic sources of finance for providing basic universal services which are taken for granted in many of the richest countries. In fact, that may be the only way to reach to the Sustainable Development Goals. It is easier said than done and it does require fixing the systems and the institutions that allow taxes to be collected fairly and used efficiently in providing water and sanitation for all NOW.

Checking the numbers
Historical data tells us that countries have typically achieved (near) universal rural water coverage when they reached a GDP per person of between US$ 5,000 and 8,000. Many low income countries which are not on track to meet the Sustainable Development Goals are well below these targets. Given the low levels of GDP of some countries, 0.5% of GDP target for sanitation - as per the Ngor declaration commitments - 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.

Following the money
The other aspect that contributes to my pessimism is the general lack of accountability for funding spent in the sector. 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 universal goals don't even know how many service providers they have, where the water and sanitation infrastructure is located and if its working properly.

In countries where there is no accountability for the levels of service being provided over time (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.

At IRC we are supporting countries and organisations developing their monitoring systems both at national and district level, including tracking finance and understanding value for money of investments in water and sanitation.

Unfortunately most evaluation, mid-term reviews and costing reports in the sector are not made public. Secrecy is the enemy of good governance. Without this type of evidence and data civil society cannot hold their governments accountable or help to find joint solutions to overcome the bottlenecks. At international level, NGOs need to start demanding that donors make these reports public.

Transparency and accountability
are an important ingredient to accelerate change in the sector. And then maybe, we might set the processes in motion that will allow us to reach the Sustainable Development Goals for the water and sanitation sector.

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