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 26 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