To achieve clean water and sanitation for all by the year 2030, Africa will need to nearly triple its current investment and mobilize an additional $30 billion annually. That may seem like a hefty sum, but it’s less than two per cent of the continent’s current GDP.
It’s also far less than the estimated $170 billion lost annually from water scarcity, poor sanitation, and disease in sub-Saharan Africa alone.
Historically, finance ministers have been apathetic about allocating funds to water and sanitation because these services are viewed as a drain on public budgets. I’ve heard that providing access is: “Too expensive” and “Less pressing than tackling climate change, a pandemic or a humanitarian emergency.”
Unfortunately, many decision-makers are often tempted to pursue one goal at the exclusion of others. We cannot achieve climate goals if countries are facing water scarcity. We cannot improve healthcare when more children under five are dying from contaminated water than bullets in war.
But there are ways to pay for water and sanitation that can simultaneously help leaders achieve their development goals. So how do we triple investment?
First, we need to start with political prioritization. Who increases or decreases budgets? Who decides on ambitious goals to increase access to water and sanitation? These are political decisions, and I believe that when political will is mobilized to prioritize water and sanitation, the financing follows.
For example, earlier this year, nine African governments announced they are working on Presidential Compacts on Water and Sanitation.
These initiatives include increased budget allocations, innovative sources of financing, and plans to construct new infrastructure. We hope to see other countries across the continent – and beyond – follow suit.
Second, we need to convince finance ministers that water and sanitation yields high economic and financial returns. Every dollar invested in climate-resilient water and sanitation in Africa returns at least $7.
Next, governments and their partners can more effectively use the financial resources they already have including domestic water tariffs, taxes, and micro and macro loans.
For example, government officials might think they are making water and sanitation more affordable for poorer households by instituting low tariffs for all customers.
However, this often creates a lack of revenue to cover the basic operational costs of water companies, which then need additional financial support from the government to survive. It can also unintentionally subsidize wealthier households and businesses who can afford to pay more.
Alternatively, Burkina Faso, has instituted higher tariffs on commerce and industry to offset the costs of providing household connections and public standpipes within poorer communities.
Earmarked tax dollars are yet another way to pay for water and sanitation. Europe and North America have historically used property taxes to fund capital investments in these services, while South Korea has used tax money from alcohol sales.
The foundation of a healthy investment climate also demands stronger sector regulation: well-documented standards with targets for performance, clear lines of accountability, incentives and penalties. For example, Kenya has teamed up with the World Bank to evaluate the creditworthiness of their water utilities to attract domestic and international finance.
Finally, the international community needs to build relationships with finance ministers, bringing the right examples of policies that can achieve development goals. That’s the objective of our upcoming Africa Finance Ministers’ Meeting which will be hosted on 31 October by Sanitation and Water for All, UNICEF and the African Ministers’ Council on Water.
This is a unique opportunity for our sector to position itself not as a drain on national resources, but rather as an investment in human and economic development. Additionally, many finance ministers are already taking positive steps to finance water and sanitation in their countries, and we are excited for them to share their expertise.
There are very few opportunities where a single investment can improve public health and quality of life, spur economic growth, and reduce inequalities, but investing in water does all of these things and more.
It’s time we reap the rewards.
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