Government Spending on WASH
This second blog is part of a four-part blog series written by Jo Walker who manages the Government Spending Watch (GSW) programme. It reflects some of the conclusions outlined in the most recent Government Spending Watch report “Financing the Sustainable Development Goals: Lessons from Government Spending on the MDGs”. This week’s blog questions what it will take to reach the unreached.
WASH spending needs to double to achieve the SDGs
The stagnation in water, sanitation and hygiene (WASH) spending in recent years is worrying- as we explored in last week’s blog – not least because the SDGs goal and targets envision a massive scale-up – to universal coverage. While the water target for the MDG was globally met (implying action might be easier in the SDGs), many countries still have far to go, especially as the sanitation target for the MDGs was not met. This is clearly going to entail a huge expansion of financing. Therefore there is no doubt that vastly more investment is required for the sector. According to the Sustainable Development Solutions Network (SDSN), around US$24 billion could be required annually to ensure universal access to safe water and sanitation. The United Nations Conference on Trade And Development (UNCTAD) estimates that sanitation will account for the vast bulk of these investment needs. According to our analysis, universal WASH coverage would require a doubling in current spending.
Leaving no-one behind is going be an even greater challenge
The MDGs allowed governments to focus on improving lives for the relatively easy-to-reach populations. The SDGs will require a focus on the hardest to reach. For instance, bringing infrastructure services to the poorest slum dwellers, living in chaotic informal settlements, or those living in remote hard-to-reach rural areas, is going to be harder (and costlier). This implies higher unit costs to reach marginalised groups, especially in informal settlements and urban slums. In addition, the SDGs are broadening the focus as they include sustainable water resources management given increasing water scarcity, and specify more detailed goals for hygiene. All this requires that delivering services may become more expensive.
UNCTAD also suggests that expanding equitable coverage to all will require public investment in services to meet the needs of the poorest. This will almost certainly require a heavy reliance on government and donor funds – even if private finance can play a more prominent role- to ensure equity and that ‘no-one is left behind’. As well as now being committed to the inclusive development commitments enshrined in the SDG framework – which means governments should ensure they find sufficient funds to meet these goals – it is also a sound investment by governments to do so, with clear economic gains. For instance, WHO estimates that for every US$1 invested in water and sanitation, there is an economic return of US$4 by keeping people healthy and productive. While the according to UNDP Human Development Report has estimated that lack of safe water, sanitation and hygiene causes sub-Saharan African countries annual losses equivalent to 5% of GDP, more than the entire continent receives in development aid.
There can be no doubt that overall, a dramatic increase in investment is required for the sector. In the post-2015 development world, WASH spending will need to grow dramatically as the global goals are made more ambitious, to provide access to WASH for all.
This third blog is part of a four-part blog series written by Jo Walker who manages the Government Spending Watch (GSW) programme. It reflects some of the conclusions outlined in the most recent Government Spending Watch report “Financing the Sustainable Development Goals: Lessons from Government Spending on the MDGs”. This week’s blog features some key financing solutions for the WASH sector.
Aid must continue to be a vital international resource.
Donor aid accounts for a remarkable amount of government spend at present in water, sanitation and hygiene (WASH). In fact, donors fund more than three quarters of WASH government spending (and the donor share has gone up by 3% since 2012). Of the sectors which Government Spending Watch (GSW) tracks, our recent 2015 report shows that WASH has been the only sector which has registered large increases in ‘on budget’ donor funding since 2012 (GSW tracks only ‘on-budget aid’, as the name suggests this is aid which is reflected in governments budget documents, an thus is aligned to their own programmes and priorities). As a consequence, aid continues to be a vital source of finance in WASH, and it must continue to play a role in helping ensure that public funds play a role in reaching the very poorest and most marginalised. WaterAid recently estimated that there will be a need for a doubling in aid spending to meet the post-2015 SDG WASH targets.
Spend it better.
However, there is a need for improvements to aid so it can also work as hard as possible in supporting governments own efforts – and governments themselves must do more. While aid must continue to be a major source of finance, there are also worrying concerns about government commitment to WASH spending and overdependence on donor aid. Any recent financing growth – or maintenance of spending – has been largely driven by donor financing to the sector. There is also a strong correlation between donor aid and shortfalls in implementation in the WASH sector (in terms of what government plan to spend and actually spend). There are larger spending shortfalls in WASH than in any other sector we track.
Research carried out by GSW for WaterAid (in an upcoming publication) has identified this lack of financial absorption in the sector is at least partially due to a mismatch in donor spending to government plans. If spending is to be accelerated post-2015, donors are going to need to simplify their procedures, and use government systems wherever possible, preferably by providing budget support in order to improve spending.
Finally, governments also need to scale-up their own spending, especially in terms of allocating enough to adequately cover operating costs (or ‘recurrent’ spending) to ensure projects run properly and sustainably. Currently, and at least partially as a result of the donor dominance in the sector, there is a mismatch between funds for investment (capital spending) and costs to keep things running – especially in rural areas.
At GSW, we work across a number of sectors, and we are acutely aware of the need to increase not only WASH sector spending but the whole resource envelope available for development – so as to avoid competition for the same finance pie which will be further stretched to meet the more ambitious SDGS. We believe that the development community needs to work together work across sectoral interests, and mobilize together to make sure tax revenue, innovative finance and aid are sufficient to fund the extra public spending we need across the whole SDG agenda.
This fourth and last blog is part of a four-part blog series written by Jo Walker who manages the Government Spending Watch (GSW) programme. It reflects some of the conclusions outlined in the most recent Government Spending Watch report “Financing the Sustainable Development Goals: Lessons from Government Spending on the MDGs”. This week’s blog highlights the necessity to hold governments accountable for progress of financing the SDG commitments.
Of the sectors which Government Spending Watch (GSW) tracks, the WASH sector has the least budget information available, especially when compared to other sectors (say health or education). Only 31 countries in our 67 strong country database, less than half, had the kinds of budget information which meant we could analyse and track spending across the whole WASH sector – hardly any have standalone budget data available on sanitation. The target GSW uses to track WASH spending (1.5% of GDP spending) has two components. Firstly, the agreement in 2008, at the eThekwini meeting of African Union Ministers, to spend 0.5% of GDP on sanitation and hygiene; and secondly studies, including by UNDP, which have suggested that meeting the MDG water goal requires 1% of GDP annually.
In most countries, the fragmented institutional framework of the WASH sector is another challenge. Water and sanitation activities are often spread across two or more institutions (e.g. water in infrastructure and sanitation in health) and implementation through multiple, different agencies for rural and urban services – makes it hard to piece together overall spending. Water, sanitation and hygiene activities are often located across two or more institutions (water in infrastructure, and sanitation in health) and in multiple different agencies for rural and urban services – making it hard to piece together overall spending. “Water spending” may also cover many non-SDG related activities such as waste water management, dams and infrastructure projects for industrial water or energy, rather than providing clean water and sanitation to the poor. It is nearly impossible to work out the spending on sanitation and hygiene component alone. This means that the element of government spending which is the most difficult to account for, is also the area which had by far the least progress over the MDG period. This must be improved to help to ensure governments can be better held to account for progress on the SDGs.
Tracking spending on WASH must be improved also as a matter of urgency. Disaggregating spending on sanitation is a top priority for action. It will also become even more vital to distinguish between spending which is increasing access, and spending which is only increasing water provision and infrastructure to those with access already.
Here at Government Spending Watch we stand ready to work with others who are committed to holding their governments accountable for progress of financing their SDG commitments. Our aim is to continue to track WASH spending – along with the seven other sectors we track. At present our online, free, open-source database is available for all to use (for the years 2012-14), for 67 low- and lower-income countries and we are currently in the process of expanding to another 10 countries over this year (to take us to nearly 80) and are updating 2015-2016 budgets. We’re keen to work with anyone in country committed to improving their own country data or to use this information for advocacy – if you want to find out more, or discuss your country do get in touch.
Posted by Jo Walker who manages the Government Spending Watch (GSW) programme. GSW believes that there is an urgent need for a much clearer picture of government spending, and for citizens, and their representatives in civil society organisations, to have access to comprehensive and timely data, so that they can hold their governments to account.