Day 1 - Strengthening budget mechanisms for sanitation financing in Uganda - Mike Thomson

1
Strengthening budget mechanisms for sanitation
financing in Uganda
Presentation to the WSP / ODI / Water Aid
Regional Workshop on Finance and PRSPs 2
February 2004 Mike Thomson, Delta Partnership
2
Introductory note

• This presentation is based on on-going WSP funded
  work in Uganda
• The assignment will last 27 days, but is not yet
  complete
• The findings and recommendations contained in
  this presentation are therefore still at an early
  draft stage
• A final report will be produced by the end of
  February

3
Background

• The Government of Uganda (GoU) has identified the
  improved uptake of sanitation as one of the key
  issues facing the water and sanitation sector
• Progress has been made with the Memorandum of
  Understanding (MoU) between the Ministry of
  Health, the Ministry of Water, Lands and
  Environment and the Ministry of Education and
  Sport to clarify Ministerial responsibilities
  with respect to sanitation
• Work is now required to establish clear budget
  mechanisms for sanitation that effectively
  allocate resources to all levels of government
  and ultimately to the end users of services

4
Trends in sanitation coverage in Uganda
5
Indicative trends in sanitation funding
Note These are very very rough estimates and
must not be quoted. Some of the data is based on
verbal estimates of expenditure. The figures do
not include salary costs of officers involved in
hygiene promotion or NGO contributions to
sanitation projects. There is a major
problem in Uganda in that accurate estimates of
resources used for sanitation activities are not
known. There is a pressing need to develop an
integrated sanitation budgeting mechanism.
6
Key issues for the budgeting study

• Clarifying what is meant by sanitation and what
  is meant by improved sanitation
• Understanding current and planned resource flows
• Assessing institutional roles and
  responsibilities
• Identifying constraints to, and opportunities
  for, the better use of resources
• Estimating future resource needs and the scope
  for non-GOU budgetary finance
• Agreeing budget categories and developing an
  integrated budgetary framework
• Presenting options for resource allocation
• Addressing staff and system development needs

7
(No Transcript)
8
Example draft findings 1 Uncertain resource flows

• There is no easy way of finding out how much
  money has been and is being invested in
  sanitation due to
• Fragmented and sometimes unclear responsibilities
• Multiple budget sources
• Lumping of sanitation with water budgets
• However, it is likely that overall investments
  have focused more on latrines in new schools and
  growth centres and less on hygiene promotion
• Poor systems at all levels of government for
  recording sanitation activities in plans and
  budgets
• There is little evidence to suggest that
  resources have been targeted at priority
  programmes and on activities that will have the
  biggest impact on health outcomes

9
Example draft findings 2 Diminishing central
control over the allocation and use of resources

• A higher proportion of resources are now
  channelled through local government
• There is potential conflict between fiscal
  decentralisation and earmarking of funds
  districts now have more autonomy on how to spend
  money sanitation is often not seen as a
  priority
• There is anecdotal evidence to suggest that the
  MoU and the move away from centrally controlled
  project based aid has led to less effective
  joined-up working at the grass roots

10
Example draft findings 3 Scope and need for more
innovative ways of raising funds

• There has been a reliance on on budget funding
  sources
• The move from project based aid to programme
  based aid may have caused a reduction in
  sanitation financing
• There is a policy of no subsidy for household
  latrines, but this does not cover sanitation /
  hygiene promotion

11
Example draft recommendation 1 Development of an
overall budget framework linked to sanitation
objectives and targets

• Integrate and summarise all budgets into one
• Itemise all key functions clearly
• Assign clear responsibilities, funds and planned
  results
• Use as a basis for negotiating for resources with
  the Ministry of Finance
• Assign responsibility for the management of this
  process to the sanitation sub-sector working
  group
• Cascade down to the district level

12
Example national budget framework for sanitation
Source of funding Source of funding Source of funding Source of funding Source of funding Source of funding Source of funding Source of funding Source of funding Source of funding Source of funding Planned outputs Planned outputs Planned outputs
Activities MoH DWD NWSC MoES MoG MoLG NGOs Donor Priv. sector Comm-unity Total Narrative No. Unit cost
Rural household sanitation
Construction of latrines 200 100 50 10 30 10 400 Households with latrines 4000 0.10
Hygiene promotion 600 400 200 200 100 1500 Households with good hygiene 150000 0.01
Urban household sanitation
New sewer connections
Sewer maintenance
Hygiene promotion
Schools sanitation
Construction of latrines - new schools
Construction of latrines - old schools
Hygiene promotion
Total budget
Note This is for illustration purposes only
it is simplified and figures are fictitious
13
Example draft recommendation 2 Better management
of budgets and resource use at local government
levels

• Prepare pro-formas for District Health Inspectors
  to plan and prepare budgets
• Assign clear responsibility for the preparation
  of an integrated sanitation plan and budget at
  the sub-county level
• Develop systems for monitoring the performance of
  districts based on key sanitation output and
  outcome indicators
• Greater linkage of resource allocation to outputs
  / performance indicators
• Review criteria for allocating overall resource
  levels to local government

14
Example sanitation performance indicators

• The following indicators are contained in the
  recent PEAP revision document for water and
  sanitation
• Number of domestic latrines constructed
• Number of urban sewerage connections
• Pupil / latrine stance ratios in schools
• of households with hand-washing facilities
• of people that have access / use hygienic
  latrines
• of people who properly dispose of childrens
  faeces
• of people practicing hand-washing after
  defecation
• these are being reviewed for inclusion in a
  set of 8 water and sanitation sector golden
  indicators if districts perform well against
  these, they could be given more resources

15
Example draft recommendation 3 Developing
innovative ways of increasing off-budget
finance

• Examples might include
• Micro-finance directed at masons for latrine
  construction (but is there enough demand?)
• Micro-finance directed at groups of individuals
  for community sanitation (but is this possible
  without sufficient income generation?)
• Build-own-operate (BOO) contracts for latrine
  construction and maintenance in urban areas
• Better district-NGO collaboration for hygiene
  promotion work
• Accessing challenge funds?
• Encourage private sector firms, e.g. soap
  manufacturers, to support hygiene awareness
  campaigns

16
End note

• These are draft example findings and
  recommendations others will be contained in the
  final report
• Further consultation is required
• For more information contact
• Meera Mehta, WSP Nairobi or
• Mike Thomson, mike_at_deltapartnership.com