Global Water Finance: Assessment of the Funding Needed to Attain the Millennium Development Goals for Water and Sanitation
This report presents data and information to make an assessment of the funding needed to attain the Millennium Development Goals (MDGs) for access to improved water and sanitation by the year 2015. Specifically, it describes current achievements of MDGs and the current funding condition. In 2002, 1.1 billion people lacked access to improved water, and 2.6 billion people lacked access to improved sanitation. To achieve the Millennium Development Goals, it is necessary to provide improved water access for additional 1.5 billion people and improved sanitation access for 2 billion people by 2015. The breakdown of funding is estimated to be 65-70 percent from domestic public sector, 5 percent from the domestic private sector, 10-15 percent from international donors, and 10-15 percent from international private companies. There is an approximately $10 billion per year shortfall between current spending for water and sanitation infrastructure and the estimated cost to achieve the MDG target. To achieve the target, in-country funding and international aid should be increased by $10 billion per year. Particularly, international aid should be doubled or increased by $3 billion per year for countries that have difficulties increasing their own in-country funding.In 2002, 42 percent of people or 300 million people in Sub-Sahara Africa lack access to improved water. According to reports of the World Bank, UNICEF and WHO, the total annual expenditure requirement for improved water and sanitation is $3.3 billion and $3.4 billion per year respectively. Despite the necessity to spend funding effectively, a case study on Ethiopia reveals that only 30 percent of the budget was used for actual infrastructure, and a large portion was impacted by corruption and mismanagement. Many efforts have been made to date to improve this condition, including prioritization, promoting equity, enhancing sector coordination, and raising capacity. Yet, those efforts have not worked effectively enough to help many countries in Sub-Saharan Africa to meet the MDG target. A case study on Kenya, however, reveals its successful increase of in-country funding through charging taxes and giving the responsibility for water and sanitation provision from a local government to a private company.
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