Africa Water, Sanitation & Hygiene November - December 2016 vol.11 No.6 | Page 28
Resource Mobilization
Eight ideas to fund access to
water and toilets for all by 2030
Some $114bn is needed each year to reach the SDG on water and sanitation. Ourpanel of experts share
their ideas on how to raise the money
By Katherine Purvis
amount. If it were instead to invest 0.5% of GDP in
sanitation, we’d be looking at about $190m [£145m] –
more than enough to cover the country’s financing gap.
The bottom line is that countries need to use equitable
taxation to support the provision of basic services for
poorer citizens. Guy Norman, director of research &
evaluation,WSUP
How do we raise the funds needed to improve access to water and sanitation
for millions? Photograph: Spencer Platt/Getty Images
1 | Crack down on illicit financial flows and tax
evasion
An estimated $1tn [£0.8tn] flows illegally out of
developing countries and emerging economies
each year – more than they receive in foreign direct
investment and aid combined. Beyond bleeding
the world’s poorest economies, this propels crime,
corruption and tax evasion. Most of the money is lost
through trade mis-invoicing – where trade invoices
are manipulated to change the value to secretly move
money across borders. Folks in the water and sanitation
sector could help promote the importance of raising
more domestic revenue by combating tax evasion and
avoidance, and push for some of that money to go
towards water and sanitation projects. Christine Clough,
programme manager,Global Financial Integrity
2 | Increase public investment
The most important route towards financing
sanitation and water is increased domestic government
investment. For example, a recent estimate of the
annual sanitation financing gap in Ghana is $93m
[£71m]. Ghana’s GDP is around $38bn [£28bn] and its
total tax revenues amount to about 21% of GDP – a
pretty good percentage for a low- to middle-income
country. But the Ghanaian government currently
invests only $7m [£5m] yearly in sanitation: a tiny, trivial
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Africa Water, Sanitation & Hygiene • November - December 2016
The ATMs bringing cheap, safe water to Nairobi’s slums
3 | Consider development impact bonds
Development impact bonds (DIBs) for water and
sanitation have huge potential; they open up interesting
revenue streams from private investors and allow
public entities to transfer the risk of failure to private
investors. Another benefit is that they force people
in the sector to better understand and measure the
benefits of interventions. Carlos Hurtado Aguilar,
sustainable development manager, Femsa Foundation
DIBs need clear outcome metrics, and problems may
arise if there’s a focus on easily measurable quick wins.
For example, using DIBs to build one million toilets
sounds great and is easily measurable, but those toilets
won’t make much difference if they’re not part of a
sustainable locally-led sanitation system. Guy Norman
And, currently, there is a lack of measurable outputs
to use as universal indicators in water and sanitation –
this makes the sector tricky for DIBs. There needs to
be a universally accepted, quantifiable and indicative
metric – such as CO2 emissions in climate change – by
which to measure results. The potential for DIBs to