WSP Africa WSP Africa Regional Thematic Work on Regional Thematic Work on

WSS in PRSPs and Sector WSS in PRSPs and Sector Finance in sub-Saharan Finance in sub-Saharan

Africa Africa

Meera MehtaMeera Mehta

Kampala, Uganda, February 2004Kampala, Uganda, February 2004

2

Water and Sanitation Program Water and Sanitation Program – Africa– Africa

““An international partnership for improving sector An international partnership for improving sector policies, practices and capacities to serve poor policies, practices and capacities to serve poor

people”people” Nine focus countries:

Ethiopia, Kenya, Mozambique and Uganda (East and Ethiopia, Kenya, Mozambique and Uganda (East and Southern Africa)Southern Africa)

Benin, Burkina Faso, Mauritania and Senegal (West Benin, Burkina Faso, Mauritania and Senegal (West Africa)Africa)

YemenYemen

Five regional thematic support groups: FINANCE and PRSPsFINANCE and PRSPs, Reform and communications, , Reform and communications,

Rural, Sanitation and Urban poorRural, Sanitation and Urban poor

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Regional Theme – PRSP and Sector Regional Theme – PRSP and Sector FinanceFinance

Addressing the issues of WSS in poverty Addressing the issues of WSS in poverty reduction strategies and sector financing for reduction strategies and sector financing for improved water and sanitation servicesimproved water and sanitation services

Two main activities:Two main activities: Incorporating Water Supply and Incorporating Water Supply and

Sanitation into PRSPs in AfricaSanitation into PRSPs in Africa Assessing Sector Finance – Water Assessing Sector Finance – Water

Supply and Sanitation Resource Flows Supply and Sanitation Resource Flows

4

Desk review of the emerging experience in 10 countries (Jan 2002)

WSP-ODI-WaterAid learning partnership – ongoing

Stakeholder workshop, 100 participants (June 2002)

Benchmarking review of 12 countries (Oct 2003 – presented today!)

Benchmarking review with participatory stakeholder engagement - planned 

Steps in the Africa WSS/PRSP Analysis…

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Benchmarking Review Results in Benchmarking Review Results in

12 African countries12 African countriesCountries: Benin, Burkina, Ethiopia, Kenya, Malawi,

Mauritania, Mozambique, Rwanda, Senegal, Tanzania, Uganda, Zambia

Five Criteria for Incorporation of WSS into PRSPs:

Was WSS adequately considered in poverty diagnosis?

Are WSS sector reforms recognized in PRSP? Does PRSP take account of sector financing

strategies? Monitoring and evaluation process in place for

WSS? Consultation process undertaken (not included in study

because of lack of information in documentation)?

6

0

0.5

1

1.5

2

2.5

3

MalawiBe

nin

Ethiop

ia

Mozam

biqueKen

ya

Tanz

ania

Zambia

Burk

ina

Rwanda

Sene

gal

Maurit

ania

Ugand

a

How well are Countries Incorporating WSS in their PRSPs?

In this first benchmarking

review of WSS in PRSPs,

Uganda and Mauritania show

the best performance on WSS in

poverty diagnostics,

sector reform, monitoring and

evaluation and sector financing.

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0 0.5 1 1.5 2 2.5 3

WSS in Poverty diagnostics

WSS Sector Reform

WSS Sector Financing

WSS Monitoring and Evaluation

WSS in PRSPs by Element - Average Score across SSA Countries

In this first benchmarking

review of WSS in PRSPs,

PRSPs show a slight better

performance on WSS in

poverty diagnostics and

sector reform. Monitoring

and evaluation and sector

financing are relative

weak.

8

0

0.5

1

1.5

2

2.5

3

WSS Average Score of

Interim PRSPs

WSS Average Score of

Full PRSPs

Improvement from Interim PRSPs to Full PRSPs

For Uganda,

Mauritania,

Burkina

Faso, and

Malawi there

were no

interim

PRSPs.

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Water and Sanitation in PRSPsWater and Sanitation in PRSPsKey FindingsKey Findings

What is the degree of WSS coverage in SSA? Low incorporation Low incorporation Considerable variationConsiderable variation Improvement from interim PRSP to full PRSPImprovement from interim PRSP to full PRSP Two countries – Uganda and Mauritania – are emerging Two countries – Uganda and Mauritania – are emerging

as leadersas leaders How can WSS coverage and incorporation

into PRSPs be improved? Improved information and M&E systemsImproved information and M&E systems Sector program and financing Sector program and financing Advocacy and incentiveAdvocacy and incentive

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Three critical areas for action to improve WSS/PRSP

incorporation

Poverty DiagnosticsPoverty Diagnostics

Sector Information M&E SystemsSector Information M&E Systems

Sector Program and Sector Program and FinancingFinancing

Advocacy and IncentivesAdvocacy and Incentives

Stage 1:Stage 1:

Initial WSS Initial WSS Incorporation Incorporation

in PRSPsin PRSPs

Stage 2:Stage 2:

Sustaining/ Sustaining/ Improving Improving

WSS in WSS in PRSPsPRSPs

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Water and Sanitation in PRSPs – Water and Sanitation in PRSPs – Further workFurther work

Advocacy plan – regional, countryAdvocacy plan – regional, country Making the case for Water and Sanitation in Making the case for Water and Sanitation in

poverty reduction strategiespoverty reduction strategies Next round of benchmarking of WSS in Next round of benchmarking of WSS in

PRSPs, through a more participatory PRSPs, through a more participatory approachapproach

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Water and Sanitation Sector Water and Sanitation Sector Finance Finance

Key ActivitiesKey Activities Developing a framework for assessing resource Developing a framework for assessing resource

flows in the WSS sector and applications in flows in the WSS sector and applications in countriescountries

Regional comparative analysis of sector financeRegional comparative analysis of sector finance Other regional studies: WSS in Social funds, Other regional studies: WSS in Social funds,

and WSS Small providers and Microfinanceand WSS Small providers and Microfinance

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Why Resource Flows Why Resource Flows Assessments?Assessments?

Inadequate understanding of WSS sector Inadequate understanding of WSS sector finance - one of the key reasons identified for finance - one of the key reasons identified for lack of WSS incorporation into PRSPs in SSAlack of WSS incorporation into PRSPs in SSA Diverse sources and channels with equal importance Diverse sources and channels with equal importance

of public and private/community resources, and by of public and private/community resources, and by national and local governmentsnational and local governments

Exploring the potential to use financing to provide Exploring the potential to use financing to provide incentives for reforms and improved performanceincentives for reforms and improved performance

Finance is perceived as a constraint– need to assess Finance is perceived as a constraint– need to assess ‘gaps’ and explore leveraging‘gaps’ and explore leveraging

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Resource Flows StudiesResource Flows Studies

Phase 1: Phase 1: Exploratory studies in Kenya, South Africa and EthiopiaExploratory studies in Kenya, South Africa and Ethiopia Countrywide assessments using Countrywide assessments using institutional and institutional and

financial mappingfinancial mapping Phase 2: Phase 2:

Country level…Country level… Further studies in Uganda, Zambia, YemenFurther studies in Uganda, Zambia, Yemen Uganda – application of approach to sanitation financingUganda – application of approach to sanitation financing Kenya – contribution of findings and approach to assist Kenya – contribution of findings and approach to assist

Government of Kenya for WSS sector financial and Government of Kenya for WSS sector financial and investment planninginvestment planning

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Approach- Financial Approach- Financial MappingMapping

User Charges

MWRMD Water Supply Department

NWCPC

Local Authorities

LA Water Departments

Local Utilities

Small Private Providers

Community Based Organizations

Settlement/ Community/ Village

Local Government

National

Government budgets Direct Generation by WSPs

1. GOK Budget

4. Internal Generation

3. Off-Budget Donors

5. Community Contributions

2. LA Budget

User Charges

EExxiissttiinngg FFiinnaanncciiaall AArrrraannggeemmeennttss

Weak or non-existent links of

budgets to outputs, targets

and performance

Large uncoordinated off budget resources

Operational surplus not

accumulated or capitalized

Internal generation not

used for development exp.

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SubCounties

SubDistricts

Comm-unitiesMoFPED

MoH

MoLG

55 Districts

DWD

MoES

MoWLE

MoGLSD

13 Munic.Councils

KCC

60 TownCouncils

NWSC

CommunityContributions

DevelopmentPartners

FinancialInstns.

PrivateSector

NGOs

MicroFinance

LC5

LC3LGDP

SFG

Program

me aid

PHCCG

Equalisation Grant

WSCG

On-budgetOff-budget

Indicative sources of funding for sanitation activitiesIndicative sources of funding for sanitation activities

Project aid

Usercharge

s

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National Budget Framework for SanitationNational Budget Framework for SanitationSource of funding Planned outputs

Activities MoH DWD NWSC

MoES

MoG MoLG

NGOs

Donor

Priv. secto

r

Comm-

unity

Total Narrative No. Unit cost

Rural household sanitation

Construction of latrines

200 100 50 10 30 10 400 Households with latrines

4000 0.10

Hygiene promotion

600 400 200 200 100 1500

Households with good hygiene

150000

0.01

Urban household sanitation

New sewer connections

Sewer maintenance

Hygiene promotion

Schools sanitation

Construction of latrines - new schools

Construction of latrines - old schools

Hygiene promotion

Total budget

Note: This is for illustration purposes only – it is simplified and figures are fictitious

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Emerging DirectionsEmerging DirectionsUganda SanitationUganda Sanitation

• Development of an overall budget framework Development of an overall budget framework linked to sanitation objectives and targets – linked to sanitation objectives and targets – inquiries at national and district levelsinquiries at national and district levels

• Better management of budgets and resource use at local government levels

• Exploring innovative ways of increasing ‘off-Exploring innovative ways of increasing ‘off-budget’ finance (NGOs, households, budget’ finance (NGOs, households, community, small private, etc.)community, small private, etc.)

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Selected FindingsSelected Findings Sector GovernanceSector Governance

Governance issues critical, often necessitate sector Governance issues critical, often necessitate sector institutional reforms – and influence financing opportunitiesinstitutional reforms – and influence financing opportunities

All three countries have adopted reforms and are at varying All three countries have adopted reforms and are at varying stages of implementationstages of implementation

Design of ‘Transition Process’ is critical… and need to assess Design of ‘Transition Process’ is critical… and need to assess its financial implications in all the three countries…its financial implications in all the three countries… Transfer of existing public schemes after rehabilitationTransfer of existing public schemes after rehabilitation Transfer of staff, fiscal decentralization and local capacity Transfer of staff, fiscal decentralization and local capacity

buildingbuilding Setting up new institutions – governance structuresSetting up new institutions – governance structures Setting up new financing mechanisms – e.g. water services Setting up new financing mechanisms – e.g. water services

trust fund in Kenyatrust fund in Kenya

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Selected FindingsSelected Findings

WSS FinanceWSS Finance Inadequacy of funding – generally highlighted by Inadequacy of funding – generally highlighted by

countriescountriesBased on studies…Based on studies…

Some comparisons possible of what is being spent…Some comparisons possible of what is being spent…But….But….

Little rigorous analysis of what is really required? Little rigorous analysis of what is really required? Need to develop tools for strategic financial and Need to develop tools for strategic financial and

investment planninginvestment planning In relation to - allocation across sub-sectors and cost In relation to - allocation across sub-sectors and cost

sharing rules, financing rules, technology choicessharing rules, financing rules, technology choices

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WSS expenditure as WSS expenditure as share of public expenditureshare of public expenditure

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Ethiopia(2000)

Kenya(2001)

South Africa(2003)

National andLocal Budgets

-

1.0

2.0

Ethiopia Kenya South Africa

PublicExpenditure

Total SectorExpenditure

WSS expenditure as share of GDPWSS expenditure as share of GDP

WSS public spending appears low… WSS public spending appears low…

But inadequate assessment of the ‘required level of spending’But inadequate assessment of the ‘required level of spending’

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Comparing expenditure as a % of GDP - health Comparing expenditure as a % of GDP - health versus WSSversus WSS

Are we crowding out non-public resources?Are we crowding out non-public resources?

Source: Sub-Saharan Africa: World Development Report, 2003. Other countries: WSP-AF ongoing studies.

0

3

6

9

Health

Public

Total

Sub Saharan Africa

0

3

6

9

WSS Health

Ethiopia

0

3

6

9

WSS Health

Kenya

0

3

6

9

WSS Health

South Africa

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Use of Non-public ResourcesUse of Non-public Resources

Kenya and Ethiopia…Kenya and Ethiopia… Significant prevalence of non-budgetary and Significant prevalence of non-budgetary and

non-public resourcesnon-public resources User charges (39%)User charges (39%) Donors through NGOs (20% ) Donors through NGOs (20% ) Need to explore NGO coordinationNeed to explore NGO coordination

Efficiency and effectiveness are difficult to Efficiency and effectiveness are difficult to measure at national level without special measure at national level without special studies as routine monitoring information is studies as routine monitoring information is weak / non-existentweak / non-existent

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Why regional resource flows comparisons?

At country levelAt country level to enable comparison with other countries, and with to enable comparison with other countries, and with

regional benchmarks regional benchmarks Civil society advocates and parliamentarians to Civil society advocates and parliamentarians to

make governments accountable for resource make governments accountable for resource allocations and utilizationallocations and utilization

Donors to adjust their priorities and assistance Donors to adjust their priorities and assistance All stakeholders to gain access to good practices All stakeholders to gain access to good practices

and innovative ideasand innovative ideas At regional level – At regional level – to exploreto explore

Feed into NEPAD and AMCOW processFeed into NEPAD and AMCOW process Regional donor groups, African Water FacilityRegional donor groups, African Water Facility DonorsDonors

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Sector Finance – Further WorkSector Finance – Further Work

Expand the Expand the scope of benchmarkingscope of benchmarking (PRSP) to incorporate country level WSS (PRSP) to incorporate country level WSS financial performancefinancial performance Develop indicators, benchmarks and Develop indicators, benchmarks and

performance assessment in a participatory performance assessment in a participatory manner with stakeholder engagementmanner with stakeholder engagement

Refine institutional and financial mapping Refine institutional and financial mapping to expand into strategic models for country to expand into strategic models for country level level financial and investment planningfinancial and investment planning (Kenya, Uganda – sanitation)(Kenya, Uganda – sanitation)