WATER SUPPLY

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WATER SUPPLY SANITATIONREFORM INITIATIVES IN
NIGERIA

• Presented by
• Engr. M.A.K Abubakar, MFR, FNSE
• Director, Water Supply Quality Control
• Federal Ministry of Water Resources
• Abuja, Nigeria

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OUTLINE OF PRESENTATION

• Country and Sector background
• Current Status
• Outcome of the past efforts
• Sector Reform
• Private Sector Participation
• Sector Vision and Reform Strategy
• Nigerian Urban Water Supply Reform Project
• Conclusions.

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I. COUNTRY AND SECTOR BACKGROUND
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1.1 Political and Economic Context

• Geography and climate
• Population
• Economic Conditions
• The Centrality of WSS to Economic Development

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1.1.1 Geography and climate

• Land area 924,00 sq. km.
• Semi-arid northern part to tropical humid south
• Av. annual rain 500 to 2,000 mm, North to South
• Well defined seasonal rainfall
• Two main rivers, Niger and Benue converge in the
  central region flowing south into the Atlantic
• Part of the Lake Chad NE conner

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1.1.2 Population Pattern

• Population Total 131.3m
• Density 130/sq. km.
• Growth rate 2.9

Type Community Size 2003 2004 2005 2006 2007
Rural lt5,000 59.9 61.7 63.5 65.4 67.2
Semi-Urban 5,000 to 20,000 24.0 24.7 25.4 26.2 26.9
Urban gt20,000 47.4 48.8 50.2 51.7 53.1
TOTAL 131.3 135.2 139.1 143.3 147.2
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1.1.3 Economic condition

• GDP - 36 billion
• Per capita income US 300
• Debt/GDP ratio estimate (1998) 70
• Urban poverty on the increase (1996) 48
  (2002) Pgt70
• New Poverty program started 1999
• New due process for transparency
• Better funding of infrastructure services
• Gradual improvement in budget performance

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1.1.4 Centrality of WSS to Economic Development

• linkages between WSS and
• Health
• Education
• Agriculture
• Environment
• Direct and rapid impact on poverty
• Impact on industries and cost of production
• Impact on firms and generation of employment

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1.2 Background of Water Sector

• Water Resources
• WSS Coverage
• Institutional Aspects
• National WSS Policy

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1.2.1 Water Resources

• Adequate surface ground water available
• Spatial temporal distribution of resource
  result in scarcity especially in the north
• Increasing population especially around growing
  settlement centres resulting in increasing
  demand, and in water shortages
• Scarcity or shortages leading to conflicts
• Past govt. efforts fragmented and focussed on
  sectoral development
• Govt. is now developing a WRMS.

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1.2.2 Water supply sanitation coverage

• Rapid population growth
• Poor maintenance unreliable supplies
• National coverage about 57
• State Capitals 67
• Urban coverage is about 60
• Semi Urban coverage is about 50
• Rural coverage is estimated at 55

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1.2.3 Institutional aspects

• Shared responsibility by three levels of
  government
• Federal Government level custody of resources,
  Policies formulation, coordination planning.
  Participates in capital investment.
• State Government (36) level responsible for
  portable water supplies. Support to Local
  Governments.
• Local Government (774) level responsible for
  rural water supplies and sanitation facilities.
  Few are able to discharge the responsibility yet.

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1.2.4 National WSS Policy

• Adopted - January 2000
• Policy high points
• Makes the supply of adequate WSS a right to all
  Nigerians
• Gives responsibility to the three tiers of
  government , the private sector and the
  beneficiary
• Recognizes water as an economic social good,
  and the need to run water supplies as business
• Identifies the need for reform and for PSP
• Recognizes the special needs of women and the
  poor, and the need to link improved sanitation
  with water supply.

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II. Current Status
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2.1.1 Large urban water utility problem

• State water agencies operational defficiency
• Non-revenue generating,
• High unaccounted for water (63 in 1998)
• Insufficient financial resources,
• Politically sensitive tariff setting regime,
• Aging infrastructures,
• Energy problems
• Low institutional capacity
• Peri-urban pressure

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2.1.2 Urban Sanitation

• Urban Sanitation
• The new Water Supply Sanitation Strategy
  document links sanitation development to water
  supply under the FMWR.
• The Ministry of Environment overall responsible
  for sanitation
• Urban sanitation in a dismal state and requires
  Better-formulated policies massive injection of
  well-formulated investments
• Collaborative link (Inter Agency) on Sanitation

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2.1.3 Government responses

• State water supply investment projects
• Developed Sector Policy paper
• Promoting sector reform
• Promoting Private Sector Participation (PSP)
• Enlisting Intersectoral, multilateral bilateral
  support (Collaboration)

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2.2.1 Small Town Water Supply and San. (STWSS)

• Largely ignored by SWAs gap is filled by private
  entrepreneurs
• The three tiers of govt. responsible but with
  overlapping uncoordinated roles functions.
• Little or no community participation.

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2.2.2 Management of STWSS facilities

• Inadequately trained or motivated MO crews
• Effectiveness constrained by dwindling funds
• 1997 FMWR survey Pit latrines predominates
• most residents have no organized way of dealing
  with their solid waste.

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2.2.3 Small town sanitation facilities

• 15 without access to safe excreta disposal
  facility
• 75 use pit latrines
• 60 discharge waste water directly to the
  environment
• Poor drainage abound
• No organised way of dealing with solid waste by
  most residents

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2.2.4 Government response (STWSS)

• STWSSP launched to improve the situation (Policy
  Strategic Framework)
• Demand-based delivery
• Community ownership and management
• Streamlined institutional support
• Increased private sector participation
• Contracting of management and technical operation
  by the community

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2.3.1 Rural Water Supply and Sanitation (RWSS)

• 55 have access to reliable WS and sanitation
  facilities
• Many communities served by multiple programmes
• Weak coordination of numerous programs
• Inadequate capacity at State, Local Gov. and
  community levels
• Urgent need for Strategic Framework

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2.3.2 Government responses (RWSS)

• Sustainability principles promoted Strategic
  Framework
• Demand driven intervention by Gov.
• Community choice of level of service
• Community contribution to capital cost
• Community fully responsible for OM
• Government technical assistance to communities
• Monitoring and Evaluation network by Govt.
• Collaboration with Stakeholders
• Devolution

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III. OUTCOME OF THE PAST EFFORTS
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3. OUTCOME OF THE PAST EFFORTS IN URBAN WATER
SUPPLY

• Clear perception of the sector distress
• Problems identification
• Sector reform platform

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IV. SECTOR REFORM
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4.1 Reform defined

• To improve by correcting errors
• To improve by removing defects
• To abolish abuse
• To give up malpractices
• A change for the better
• An improvement Perpectuation
• Action to improve socio-economic conditions

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4.2 DEVELOPMENT OBJECTIVE OF REFORM
INITIATIVES

• Sustainable water supply to all socio-economic
  groups
• Optimal involvement of private operators for
  management investment
• Tailor-made reform for
• Rural water and sanitation
• Small towns water supply sanitation
• Urban water supply sanitation

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V. PRIVATE SECTOR PARTICIPATION
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5.1 PSP CONCEPT - RANGE OF OPTIONS

• It involves delegation of responsibilities from
  public utilities to private organization for
  mutual benefits.
• It includes a range of options
• Service contract
• Management contract
• Lease or affermage
• Build Operate and Transfer (BOT)
• Concession
• Private Public Partnership
• Divestiture.

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5.1.1 SERVICE CONTRACT

• A private organization is hired to carry out
  specific activities (periodic
• maintenance, meter reading etc.)
• The utility pays the organization a
  pre-determined fee for the service
• Duration usually below 2 years
• Requires little or no regulation
• Does not involve significant infusion of capital
  from the private sector.

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5.1.2 MANAGEMENT CONTRACT

• A private organization is awarded a contract for
  operation, maintenance, billing and collection
  for a fee.
• The public sector remains responsible for
  investment.
• It provides access to private sector managerial
  skills.
• Duration usually between 3 5 years
• Requires limited regulation
• No infusion of private capital.

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5.1.3 LEASE OR AFFERMAGE

• Public assets are leased to a private
  organization for a period of between 8 to 15
  years)
• The organization pays lease fee to government
• Revenue is generated from end users
• Government controls major capital expenditure
• Requires adequate regulation
• Assets are returned to the government at the end
  of contract

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5.1.4 CONCESSION CONTRACT

• A private organization is given the
  responsibility of operation, maintenance, billing
  and collection.
• The organization is also responsible for capital
  investment.
• Duration is usually between 20 to 30 years to
  recover investment.
• Requires substantial regulation

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5.1.5 BUILD OPERATE AND TRANSFER (BOT)

• A private organization constructs a new system or
  part of the system.
• Useful where the main problem is shortage of bulk
  treated water.
• Duration is usually between 20 to 30 years
• Requires adequate regulation

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5.1.6 DIVESTITURE

• Utility assets are sold out-rightly to a private
  organization
• All risks are transferred to the private owner.
• Requires intensive regulation

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VI. Sector Vision Reform Strategy
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6.1 sector vision

• Improving WSS essential to Nigerias development
  strategy
• Lack of adequate financial resources principal
  problem to overcome
• Reform of sector practices necessary for rising
  and efficient/effective utilisation of funds
• Systematic involvement of the private sector
  essential
• Urgent attention to decaying infrastructure
• Urgent improvement of management and operational
  effectiveness of WSS services

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6.2 Sector Reform Strategy
A. Federal Level Water Sanitation
Goal Improved Sector Coverage Operational Efficiency Improved Sector Coverage through low cost facilities
Strategy Policy development capacity building Strengthening of weaker states Promotion of PSP Ensuring adequate regulation Ensuring compliance with sector policies Donor coordination Elaboration of sector policies Hygiene education health promotion
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6.2.1 Sector Strategy Urban WSSS

• B. STATE WATER SANITATION
• LEVEL
• URBAN
• GOAL Increased efficiency Through Improve
  Basic Ser-vices thru
• commercialization Incremental Urban Up-
  grading Program
• PSP Leading to Increased
• Investment Coverage
• Level I Level II Level III
• STRATEGY SWA Autonomy, Service
  Mgt.. Lease, Urban up-grading,
• Commercialization, Contracts Concession, adeq
  uate excreta
• Service Contracts, BOO, BOT disposal
• Rehabilitation Sanitation Ufw
  contracts program thru.
• water utility
• Storm water drainage
• Improved solid waste Mgt.
• Incremental development of
  waste
• water disposal facilities

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6.2.2 Sector Reform Strategy(STWSS)
SMALL TOWNS
GOAL Sustainabilty Thru. Community Ownership, Increased Coverage Basic Services Delivered Thru. Low Cost Sanitation with Supply Development
STRATEGY Community participation with local PSP promotes demand based delivery of WS services Community ownership mgt. of W S systems Operation mgt. Contracted to local private sector (service contracts) Level of Service cost sharing determined by community Community contribution to capital costs (partial subsidies restricted to capital costs) Promotion, monitoring of coordination with private, informal providers, with minimal but necessary regulation
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6.2.3 Sector Reform Strategy(RWSS)
RURAL
GOAL Improved WS Coverage Services Through Community Ownership Basic Services Delivered through Low Cost Sanitation with Water Supply Development
STRATEGY Community owned operated low cost WS Systems Community managed maintained WS systems Community contribution to capital costs (partial subsidies restricted to capital costs) Local manufacture of hand pumps to ensure spare parts availability On site excreta disposal Drainage facilities for sullage wastewater

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6.3 PSP Strategies as Principal Thrust for the
Urban Water Supply Market

• PSP is the ultimate Goal
• Structural reform of the utilities
• PSP as a range of options which seeking to
  introduce commercial criteria in pricing, service
  delivery/ or allocation of resources.
• Operational autonomy and accountability.
• Incremental approach to PSP
• Appropriate Regulation to support reform
• Realignment of institutional responsibilities

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6.4.1 Urban Sanitation

• Sanitation Strategy now being developed
• Push to clarify and further responsibilities and
  strategy
• Push to link the provision of adequate wastewater
  disposal facilities to the provision of water
  supply for reasons of health impact pollution
  control
• Cost recovery issues are to be addressed

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6.4.2 Strategic Direction-Urban Sanitation

• Service to be based on demand
• Hygiene education to promote demand
• Public awareness and motivation
• User contribution to cost of basic service
• Use of PSP service providers
• Capacity building of water utilities to manage
  sanitation programs

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6.5.1 Small Towns Water Supply Sanitation

• Govt.s program is demand-based delivery of WSS,
• community ownership and management of water
  systems,
• streamlined institutional support,
• increased PSP under service contract
• Sanitation planning and improvements will be
  addressed as part of the pilot activities.

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6.5.2 Rural WSS-Strategy

• Community ownership management of water systems
• less control by , and independence on, the local
  govtsCommunity control of basic maintenance and
  financial management
• Technical assistance to communities
• Promote appropriate low cost technology network
• Phase out partial subsidies for OM costs and
  restrict subsidies to capital costs only.

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6.6 Linkage to Water Resource management
strategy(WRMS)

• Process to ensure equitable access sustainable
  development of water resources.
• Promote long-term socio-economic development.
• Framework to consider water and environment in a
  broad, multi-sectoral, integrative perspective.

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6.7 Funding and Cost Recovery

• Huge gap between investment needs and
  mobilizeable funds
• Phase wise implementation
• Prudence with available resources
• Resources to priority investment alternatives
• Recurrent financing through higher tariffs
• Affordability and willingness to pay factor
  important for domestic consumers

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VII. NIGERIAN URBAN WATER REFORM PROJECT
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7.1 PROJECT COMPONENTS

• 3 key components
• Institutional and policy development - on-going
• Transaction to establish PSP contract
• Investment on rehabilitation and expansion works.

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7.2 IMPLEMENTATION STRATEGY UTILITY LEVEL PHASE
1

• Phase 1 activities
• studies to confirm and refine the appropriate PSP
  model
• willingness-to-pay and tariff studies
• investment planning and sanitation/environmental
  studies
• financial modelling, customers enumeration and
  preparation of assets register
• public communication outreach and information
  dissemination
• transaction preparation, bidding and award.

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7.3 IMPLEMENTATION STRATEGY UTILITY LEVEL PHASE
2

• Utility level phase 2 activities
• improved service delivery through contractual
  performance benchmarks
• increasing the utility performance under
  contract
• system rehabilitation through PSP contract
• network expansion through PSP contract and
• environmental management.

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7.4 IMPLEMENTATION STRATEGY STATE LEVEL

• State level activities
• Participating state governments will undertake
  the following activities
• establishment of regulatory bodies
• formulation and/or amendment of appropriate
  legislation
• public communication outreach and information
  dissemination and
• environmental regulation

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7.5 IMPLEMENTATION STRATEGY FEDERAL LEVEL

• Federal Level Activities
• The federal Government will carry out the
  following activities
• development and implementation of water resources
  management strategy
• establishing the appropriate regulatory body
• promotion to all states of best practices in the
  water supply and sanitation
• monitoring and evaluation of sector development
  and planning improvement
• performance monitoring and benchmarking of the
  state water agencies and
• ESA coordination

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7.6 IMPLEMENTATION STATUS

• Project implementation at institutional and
  policy development level with a number
  of on-going studies shown on the table below

Study Objectives
Market structure and PSP options study To assess the operations of the SWA and advise on the appropriate option for restructuring, involving private partners and for structuring a regulatory environment
Public opinion research and awareness study To design and implement an effective public communication programme.
Pro-poverty study Review of baseline poverty data and preparation of poverty map.
Preparation of legal and regulatory framework. To prepare national water policy, service standards and legal and regulatory guidelines.
Environmental Framework and resettlement policy framework To establish a mechanism for determining future potential environmental and social impacts and framework for resettlement and mitigation issues.
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VIII. CONCLUSIONS
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8. CONCLUSIONS

• The existing investment gap, institutional
  practises and business methods necessitate the
  need to reform the water supply sanitation
  sector
• The reform will be a gradual and rigorous
  process
• Government will continue to finance the
  development costs for Small towns and rural areas
  water supply and sanitation with emphasis on
  communities participation and ownership
• Incremental PSP approach will be the focus for
  urban water supply and sanitation.

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THANK YOU!