1. Why monitoring finance matters
Catarina Fonseca
IRC – International Water and Sanitation Centre
Symposium: Monitoring sustainable service delivery
Addis, 9th April, 2013
This is the introduction to Topic 1 Finance – background paper is available on line, I will focus on why monitoring finance matters
Put very simply, because we want to avoid this as a sector both for water and sanitation
And we have a vision that everyone, everywhere forever has safe, adequate and affordable services
So what is needed from a financial perspective to reach everyone, everywhere, forever?We can’t expect to keep doing the same things over and over again and expect different results – what needs to change?
Monitoring finance matters because we want to achieve financial sustainability: all the sources of funds need to be at least equal to all the yearly recurrent costs – every year!
But in reality, especially for rural water and sanitation we know very little on how much is being transferred (ODA or private), how much is being covered by taxes and even less on how much are households paying and contributing – especially in where there are no formal service providers
The cost-effectiveness of hygiene programmes which focus on behavioural change for hand washing for instance is even less known
But what we know when we start tracking finance is that for instance, tariffs (which include hh own contributions) are much higher than we think.
In Burkina Faso, on average, the households which main source are handpumps are spending 5.5 USD per person per year while the affordability norm set by the government is 0.5 USD
The second reason why tracking finance matters is that we can increase value for moneyEven withconstant sources of funds, by shifting the focus of the investments we can achieve significant savingsIn WASHCost we have several evidence of this
The third reason is that we can target reducing inequalitiesHow much it is expected from different socio-economic groups and if it is affordable for them – or is preventing them from accessing services
When we look closer at HH expenditure, in Burkina, the very poor spend the same as the poor or non-poor – but relative to their income the expenditure is above any known affordability benchmark… and they are getting a lower level of service than the poor or the non-poor
We are starting to have a shared financial language in the rural WASH sector – closer to the urban sectorSources of funds and types of costs being used by many different organisations and governmentsBut less so in sanitation and hygiene
Given the efforts of the last 5 years of the WASHCost team and many others who started tracking financeWe also start to have cost benchmarks for a basic level of service both for water and sanitation – one off and recurrent
Some of the cost benchmarks still have a wide rangeWe only have cost benchmarks for a basic level of service
But the best of all achievements is that there is an increased demand for simple methodologies and indicators
More demand for accountability of investments madeMore demand for financial informationMore demand for value for money
But also more tracking as a result
Remaining challenges include:- Slow progress – can be seen by number of respondents on financial tracking in GLAAS- Policy analysis of 11 development partners shows little attention to management of assets
In practice: focus on open data and easy to access data sets But on finance… it is not so easy to share financial data – and many times not because of unwillingness, but its available only in hard copy…
Tracking and monitoring finance gets a bit complicated, but that’s why we are here.
There is also the demo space and the IRC booth where you can come and inform the development of a financial sustainability costing tool
None of these tools will be useful if we do not monitor financial data because if we can’t measure, we cannot plan, and if we cannot plan, there is no action, no change.
