Financing universal access to water, sanitation and hygiene by 2030
by John Garrett
14 July 2015
In 2015 the development community stands poised between the past and the future – reviewing what worked and what didn’t with the Millennium Development Goals and using that experience and knowledge to push for future transformational change in the launch of the Sustainable Development Goals later this year.
WaterAid is hopeful that the SDGs will set a goal of universal access to water and sanitation by 2030 – an ambitious but achievable aim which could create a truly historic turning point in the lives of poor and marginalised people around the world. But if this is to have any chance of succeeding, it must be underpinned with a solid base of financial commitment. That is why WaterAid is attending the Addis Ababa Financing for Development Conference to help ensure that progress towards universal access to water and, in particular, sanitation, for too long the Cinderella of development, is not held back through lack of funds.
Although more than 2.6 billion people have gained access to improved water and 2.1 billion to improved sanitation since 1990, progress has been uneven. The Millennium Development Goal (MDG) sanitation target has been missed by a large margin, and even though the MDG water target was met globally, many individual countries have failed to meet their related targets. A common characteristic in these countries is chronic under-resourcing.
In the fifteen years since the MDGs were launched, the debate around development financing has shifted from being one focused largely on aid spend, to one where many commentators are pushing for a completely post aid landscape, leaving behind the tensions, politics and power struggles that development aid can bring. But as we will see, whilst the primary focus for ensuring access to water and sanitation must lie with national governments and domestic resources , overseas development aid still has a crucial role to play in bringing those services to the world’s most marginalised people in the poorest countries.
In the area of water and sanitation, since the millennium we have seen the 51³Ô¹Ï declare access to clean water and sanitation as a human right and WaterAid would like to see the Addis Ababa Accord reaffirm the commitment to respecting, protecting and fulfilling human rights, including the right to water and sanitation. The status of water and sanitation as a human right places a duty on governments to ensure adequate funding for universal access.
This duty on governments means that strengthening a country’s own ability to finance water and sanitation projects should be the primary approach in achieving universal access, an approach otherwise known as domestic resource mobilisation (DRM). For the water and sanitation sector, effective DRM requires optimum use of the three T’s –taxes, tariffs, and transfers.
Committing tax revenue to water and sanitation is crucial as for too long water and, in particular, sanitation have been low down the government spending priorities in many countries. In Africa, governments have already committed through the eThekwini and Sharm el-Sheikh declarations to spend 0.5% of GDP on sanitation and hygiene but so far this is almost universally ignored. Adhering to this commitment would not only help advance access to water and sanitation, now recognised internationally as a human right, but has the strong potential to accelerate progress in other areas such as health, increase productivity and thus national income and improve educational chances, particularly for girls and the most marginalised. It should be seen as a no-brainer for government spending, but perhaps lacks the political sparkle of big infrastructure projects?
Just establishing water and sanitation services is not enough – they must be sustainable over the long term to truly transform lives. So establishing effective and affordable tariffs, which allow for reinvestment in maintenance and development, but ensure that the poorest and most marginalised are not excluded, is a crucial part of DRM. A vibrant, well-regulated private sector is crucial here, able to complement the public sector, deliver on contracts, and with the right incentives expand into new areas.
Whilst the primary duty to ensure access to water and sanitation should sit with national governments, industrialised countries have a role to play in strengthening DRM in developing countries by, for example, taking meaningful action on tax havens to ensure resources are not going astray, addressing transfer mispricing by transnational corporations, and supporting improvements in governance and transparency to tackle corruption.
However, if you look at the countries most in need of investment in water, sanitation and hygiene, it becomes clear that in the medium term, relying solely on DRM to bring global universal access is just not realistic and there continues to be a need for financial transfers to governments
For example in the Democratic Republic of Congo, just under seven in ten of the country’s population do not have access to sanitation but the government per capita revenue is only $85 a year excluding overseas aid. So even if providing access to water and sanitation was the only challenge the DRC faced, the Government would struggle to provide the necessary investments for a high-quality, sustainable service alone.
Over half the countries of the 45 LDCs register government revenue per capita of less than $400. Their high levels of household poverty also make it less likely that the private sector would find large-scale investment attractive as the returns are likely to be low.
So Official Development Assistance (ODA) is still vital in low-income country contexts. Currently around $6.6 billion of ODA a year is spent on water and sanitation projects, but against the numbers of people who currently do not have access, that figure is insufficient.
Allocations to water and sanitation need to increase substantially, with a strong focus on making sure everyone has sustainable access and that existing systems are strengthened, not undermined.
Over the last fifteen years the role that international private finance can play has become better recognised by the development sector and governments, but as it has taken decades to restore many heavily indebted poor countries to debt sustainability, extreme care needs to be taken to ensure that financing from private and official lending does not usher in a new post- 2015 debt crisis.
Above all, all those working to increase access to water, sanitation and hygiene must ensure that we deliver our activities and support in ways that strengthen country systems, with donors in particular harmonising their behaviour with non-traditional donors, according to established principles that support country-led efforts.
By doing this, we will help speed the day when we as development agencies can step back, having helped to bring global universal access to water, sanitation and hygiene to the developing world.