Setting the scene on finance
Provides an overview of current problems on finance, their impacts, and some short term goals (intermediate outcomes), priority actions and ultimate visions in moving towards change.
Current problems and impacts on Finance
An overview of current problems and their impacts, some short term goals (intermediate outcomes), priority actions and ultimate vision.
2.1 Finance: sources and sinks
Over recent years a better picture of how money flows in the WASH sector is emerging. But it can still be hard to identify where WASH money comes from (the balance between taxes, tariffs and transfers) and where it goes over time. In countries where the biggest challenges in meeting the MDGs lie, financial requirements exceed by far the available funds in country, but in many cases existing available funds are also not used cost-effectively. The international policy environment encourages new construction but not in a sustainable way, and problems of slippage are emerging, as well as a lack of development of sustainable support functions at the intermediate level. This session aims to unpack the detail on financing different activities and reflect upon financing mechanisms.
2.2 Sector budgeting processes and funding flows
Multiple level planning and budgeting underlie the delivery of decentralised WASH services. With national policy goals and targets in mind, decentralised agencies are asked to plan investments in services. These plans are consolidated at higher levels, leading ultimately to a national plan that government treasuries and donors can support. Key assumptions underlying current reform are that funds will flow through the centre (e.g. a SWAp), and that intermediate levels capacities will be strengthened as required.
2.3 Financial incentives and efficiency
Considering the limited funds for WASH, the efficiency in using available funds is a crucial question. The costs of the different financing mechanisms are important but also the criteria to access the funds, and the incentives that are generated by the financing regulatory mechanisms in order to optimise the financial needs. Financing mechanisms vary significantly in term of cost. The cost of capital varies, taxes and tariffs collection also hold different costs. On the other hand, the regularity and the predictability of funding flows are key issues when it comes to secure the delivering of sustainable WASH services, while the criteria to access funds are often unclear.
