46749 Sector Finance Working Papers: No. 9 THE REPUBLICOF UGANDA Ministry of Health ENVIRONMENTAL HEALTH DIVISION Strengthening Budget Mechanisms for Sanitation in Uganda The Water and Sanitation Program is an July 2004 international for improving water and sanitation sector policies, practices, and capacities to serve poor people CONTENTS Foreword iv List of Abbreviation vi 1 EXECUTIVE SUMMARY 1 1.1 Introduction 1 1.2 Current institutional arrangements and resource flows 1 1.3 Constraints and opportunities for better resource use 3 1.4 Estimates of funding gaps and potential 5 1.5 Strategic directions for budget mechanisms 6 2 Introduction 13 2.1 Background 13 2.2 Scope of sanitation 13 2.3 Report structure 14 2.4 Acknowledgements 14 3 Current institutional arrangements and financial resource flows 15 3.1 The Memorandum of Understanding 15 3.2 Assessment of current sanitation responsibilities 15 3.3 Local government responsibilities 16 3.4 Mapping of current funding sources 19 3.5 Trends in sanitation on-budget funding 21 3.6 Trends in sanitation off-budget / non-public funding 22 3.7 Analysis of resource allocation 23 3.8 Comparison of responsibilities with funding sources 26 3.9 A note on subsidy policy 28 3.10 Scope for improving the accuracy of data 28 4 Constraints and opportunities for better resource use 29 4.1 Constraints 29 4.2 Opportunities 33 4.3 Links to the planning and budgeting process 38 5 Estimates of funding gaps and potential 40 5.1 Future resource availability under current plans 40 5.2 Comparison of fund availability with spending by institution 40 5.3 Sanitation cost and investment need estimates 41 5.4 Comparison of investment needs with current trends 44 5.5 The cost of `best practice' test models 45 5.6 The cost of an alternative `strategic approach' 46 5.7 Paying for the potential `funding gap' 46 5.8 The scope for increasing finance form non public sources 48 6 Strategic directions for budget mechanisms 50 6.1 Recent successes and opportunities to build on 51 6.2 A three-dimensional strategic approach for sanitation 51 6.3 Developing an integrated budget management framework 54 6.4 Resource allocation principles 56 6.5 Influencing strategic decision making 58 6.6 Review of sanitation sub-sector guidelines 58 6.7 Improved monitoring and evaluation 58 6.8 Institutional and system development needs 59 6.9 Action plan 60 Annex 1 ­ consultations 62 Annex 2 ­ sanitation expenditure estimates 63 Annex 3 ­ sanitation activities, institutional mandates and funding sources 67 Bibliography 71 ii Foreword from the Ministry of Health The World Health Organisation reports that "economic costs of avoidable disease, when taken together, are staggeringly high", and that "societies with a heavy burden of disease tend to experience severe impediments to economic progress." In Uganda, about 75 percent of the disease burden is linked to poor personal and domestic hygiene and nadequate sanitation. To this end, the 9th Health Sector Joint Review Mission in i November 2003 formulated eight Undertakings to be achieved in the next 12 months. The first of these Undertakings states: Establish a sub-sector working group for sanitation to coordinate and liaise with sanitation stakeholders and operationalise the MoU; outlining budget mechanisms for sanitation at all levels; and testing models in selected districts and urban councils (as was adopted by the Water and Sanitation Sector). That both the Health and Water and Sanitation sectors committed themselves to achieve similar Undertakings during the past twelve months highlights the importance that the Government of Uganda places on Hygiene Promotion and Sanitation. This is again reflected in the latest revision of the Poverty Eradication Action Plan (PEAP), in which hygiene and sanitation are regarded as the key platforms for reducing the exceptionally high rates of Infant and Maternal Mortality (I&MM). Infant mortality and morbidity rates have actually been on the increase despite substantial investments by the government in poverty eradication over the past decade. Uganda's fertility rates ­ the highest in the world ­ coupled with the disturbing I&MM rates and burden of disease, all impose more onerous challenges in combating poverty, disease and ignorance. Clearly, there is need for urgent substantive and innovative efforts to reverse this negative trend. But there is hope, as has been proven in a number of developing countries. Indeed, there are some notable achievements right here in Uganda, for example in Busia District, where the trend is being reversed through holistic approaches towards a faecal-free environment, "total sanitation" and through home improvement campaigns. The Ministry of Health is currently drafting the second Health Sector Strategic Plan (HSSP II) for the period 2005­2010. There is now greater emphasis on "prevention" rather than "cure", and a new structure known as the "Cross-Cutting Cluster" is being designed to give dominant roles to hygiene promotion and sanitation. The objective of the new synergistic structure is to achieve far greater integration and collaboration between departments and divisions within the Health Ministry in order to gain greater efficiency, impact and cost savings. In addition, thanks in great part to the establishment of the Sanitation Working Group during the past year (the Environmental Health Division acts as Secretariat), there is already tremendous improvement in inter-sectoral and inter- ministerial cooperation and engagement of most stakeholders concerned with hygiene promotion and sanitation. This Report on Strengthening Budget Mechanisms for Sanitation in Uganda is a most timely and clear response to the above-mentioned critical issues currently facing this country. It makes a strong case for improving hygiene practices and sanitation in Uganda, and points to the urgent need to strengthen budget mechanisms for sanitation at all levels. iii For the Sector-Wide Approach to planning (SWAp), a transparent process is key in allocating financial resources to projects within the Medium-Term Budget Framework (MTBF). This requirement is all the more important for development partners who provide sector or general budget support to the Government of Uganda.. It is therefore my earnest hope that this Report will help to bring out these issues more vividly and draw the attention of policy makers and other stakeholders to more focused strategic planning. I extend my sincere appreciation to all those who contributed immensely to the production of this report, especially Mike Thomson, the consultant from Delta Partnership. I particularly thank the Water and Sanitation Programme (WSP-Africa) of the World Bank for funding and guiding the development of this report through the direction of Meera Mehta and other WSP colleagues. Lastly, I would like to encourage all key stakeholders to support and implement the Report's recommendations so that we can improve the situation of Uganda's hygiene promotion and sanitation within the quickest possible period. After notable progress in our globally-recognised fight against HIV/Aids here in Uganda, we should certainly be capable of urgently addressing this life-threatening challenge that impacts so negatively on every one of us. For. Prof. Francis Omaswa Director General ­ Health Services Ministry of Health iv List of abbreviations BOO Build, own, operate BOP Best operational practice CGO Community based organisation DFID Department for International Development DHI District Health Inspector DWD Directorate for Water Development EHD Environmental Health Division FDS Fiscal decentralisation strategy GoU Government of Uganda HPAC Health Policy Advisory Committee HSSP Health Sector Strategic Plan JSR Joint sector review KCC Kampala City Council LC Local Council LGDP Local Government development programme MDG Millennium development goal MoES Ministry of Education and Sport MoFPED Ministry of Finance, Planning and Economic Development MoGLSD Ministry of Gender, Labour and Social Development MoH Ministry of Health MoU Memorandum of understanding MoWLE Ministry of Water, Lands and Environment NGO Non government organisation NWSC National Water and Sewerage Corporation O&M Operation and maintenance PEAP Poverty eradication action plan PHCCG Primary health care conditional grant RUWASA Rural water and sanitation programme SFG School facilities grant SIP Sector investment plan SSWG Sanitation sub-sector working group SWAp Sector wide approach ToR Terms of reference TSU Technical support unit UShs Uganda shillings US$ United States dollar UWASNET Uganda water and sanitation network WSCG Water and sanitation conditional grant WSP-AF Water and sanitation programme, Africa WSS Water and sanitation sector v Budget Mechanisms For Sanitation Financing - Final Report 1 EXECUTIVE SUMMARY 1.1 Introduction The Government of Uganda has identified sanitation as a major potential contributor to the achievement of national Poverty Eradication Action Plan objectives and Millennium Development Goal targets. The September 2003 Joint Sector Review of water and sanitation identified a need to review sanitation budgeting and financing mechanisms as part of an overall strengthening of the sanitation sub-sector. This is expanded upon more in section 2. The terms of reference for this study identified three sanitation sub-sectors: household / institutional sanitation in urban and rural areas (non-piped); urban sanitation in larger urban areas and small towns (piped); and hygiene promotion in urban and rural areas. The study has used the definition developed and agreed at a sanitation stakeholder workshop in Jinja, Uganda in February 2004. This includes: · Safe disposal of human excreta (faeces and urine) · Good personal and domestic hygiene practices · Safe disposal of solid and liquid waste · Safe collection, storage and use of water, especially for drinking · Control of insect and rodent vectors such as flies, mosquitoes, rats etc. 1.2 Current institutional arrangements and resource flows Current institutional arrangements The overall review of responsibilities presented in section 3 reveals that: · A significant proportion of sanitation related activities are undertaken by parties external to the sanitation Memorandum of Understanding between the Ministries of Health, Education and Sports, and Water, Lands and Environment · Ministries and some NGOs prepare and disseminate hygiene promotion materials ­ there is more scope for sharing these · Ministry of Health field workers combine both hygiene promotion and sanitation enforcement functions (but anecdotal evidence suggests that on the enforcement side, bad sanitation practices rarely lead to prosecutions) · Responsibility for setting sanitation policies, developing guidelines, setting regulations and monitoring is particular widely split across institutions (although the Ministry of Health tends to do more work in these areas) · A broad range of institutions are involved in toilet construction 1 Budget Mechanisms For Sanitation Financing - Final Report · Fewer institutions are involved in urban sewerage and solid waste management functions · There are apparent overlaps between central and local government responsibilities for many activities It should be emphasised that having a responsibility does not preclude the involvement of other partners to assist in a sanitation related activity. Current financial resource flows With respect to funding, section 3 also sets out the multitude of `on-budget' sources of finance provided by mechanisms such as conditional grants, development programmes and equalisation grants, as well as a range of potential `off-budget' finance sources from the private sector, credit organisation, non government organisations and communities. Over the past three years or so, there has been a significant change in the way international development partners support sanitation (and other) programmes in Uganda ­ most money is now channelled as general budget support, rather than being assigned to specific projects as it was in the past. Under current budget mechanisms, it is difficult to obtain estimates of how much money is spent on sanitation activities, and many assumptions have to be made. However, in the time available for this study, the following assessments have been made based on estimates developed: · Total sanitation expenditure appears to have fluctuated over the past 5 years ­ once inflation is taken into account, there is no compelling evidence to suggest that overall funding levels have risen or fallen in real terms for the period as a whole · It is estimated that on-budget resources have ranged from about UShs 11 to 17 billion per annum, another UShs 1 billion or so may have been contributed by NGOs each year (this figure needs further review), and additional amounts of up to UShs 5 billion per annum have recently being targeted on improving sanitation in Kampala · Since 1998/99, the estimated amount of total on-budget sanitation finance going through the budget for the Department of Water Development has fallen from 46% to 18% whilst the proportion under the Ministry of Education has risen from 14 to 47%; the proportion under the Ministry of Health has stayed fairly constant at 16 to 17% · Over the past 5 years, it is estimated that between 37 to 63% of on-budget funds have gone towards the construction of latrines in schools (mainly in newly constructed primary schools) · Over the same period, there appears to have been some movement from large towns towards small town / rural focused expenditure ­ by 2002/03, approximately one and a half times as much on-budget money was targeted at the latter · On equity grounds, there are some arguments for spending an even higher proportion of money in rural areas as approximately 85% of Ugandans live in these places (and additional people live in small towns) ­ but this would need to be balanced by the fact that the cost of providing someone with adequate sanitation in urban areas is higher 2 Budget Mechanisms For Sanitation Financing - Final Report · There are also equity issues surrounding the allocation of resources in urban areas, since the majority of on-budget expenditure there is spent on piped sewerage ­ quite often, less than 10% of the urban population actually have access to this · Analysis of the types of on-budget sanitation spending suggest that for the 5 years until 2002/03: piped urban sewerage has accounted for 13 to 21% of the total; latrine construction (predominantly in primary schools and public places) for 47 to 62%; hygiene promotion for 20 to 27%; solid waste collection, vector control etc. for 2%; management and training for 2 to 8% It could be argued that there is a very unbalanced allocation of resources for sanitation based on who benefits from expenditure. Around three quarters of funds appear to have been targeted on a very small percentage of beneficiaries though school and public latrines and sewerage. Only an estimated quarter has been targeted at the vast majority of people who reside in rural households or poor urban areas. This needs to be reviewed through a sector-wide sanitation strategy as discussed further in sections 5 and 6. Comparison of responsibilities with funding flows An overall comparison of responsibilities with funding sources suggests that more resources and budget mechanisms are particularly needed to finance: · Continuous sanitation and hygiene promotion · Construction of latrines in older primary schools and in secondary schools · Maintenance and rehabilitation of latrines in schools · Sanitation services, drainage and waste disposal facilities for the urban poor At present, it is difficult to get 100% accurate data to assess resource flows (fund allocation and utilisation) for sanitation and there is an important need to improved data collection systems. 1.3 Constraints and opportunities for better resource use Scope for increasing the amount of sanitation resources In order to encourage an increase in the amount of resources forsanitation, the following actions are suggested in section 4: · Revise guidelines for the water and sanitation conditional grant so that more priority is given to sanitation activities · Enforce the guidelines that state that water points should only be provided if there is adequate improvement in hygiene practices · Revise the guidelines for the primary health care conditional grant, emphasising the importance of environmental health and how this can contribute to improved health outcomes and to reducing future curative health expenditure 3 Budget Mechanisms For Sanitation Financing - Final Report · Review the scope for subsidisation of sanitation (as part of the wider water and sanitation sector policy study) · Prepare and implement guidelines so that the 8 regional Technical Support Units can more effectively support sanitation · Provide training to District Health Officers to prepare better sanitation plans and budgets · Explore partnerships with NGOs and private sector companies to support hygiene awareness programmes · Encourage greater use of community resources and pilot innovate approaches to this, for example through the use of micro-credit facilities · Take advantage of opportunities to work within on-going health programmes such as malaria control and guinea worm eradication, and to use Area Health Support Teams to promote sanitation Scope for improving the use of sanitation resources Section 4 also sets out some ideas for making better use of resources provided for sanitation. These include: · Assess the likely impact of spending a higher proportion of resources on hygiene promotion and enforcement and adjust conditional grant guidelines accordingly · Develop an improved strategy for improved hygiene education in schools · Consider reviewing allocation criteria for conditional grants so that more money is allocated to those districts / municipalities with lower current levels of sanitation (if support for this is given by local government) · Pilot and disseminate to local governments new and cost-effective approaches to sanitation that are identified as part of the on-going study by the Environmental Health Division · Review and lobby for appropriate district reporting formats so that the allocation and impact of sanitation expenditure is easier to assess · Agree key or `golden' indicators for sanitation, define targets and cascade these down to local government (these can be taken from the overall water and sanitation performance measurement framework) · Publish district / municipality performance on sanitation by key indicator in the annual water and sanitation sector report (`performance league tables') · Identify and cost best models of local government sanitation coordination and disseminate these as part of the `good practice' models being developed by the Environmental Health Division of the Ministry of Health 4 Budget Mechanisms For Sanitation Financing - Final Report · Identify and cost best models of community sanitation monitoring and disseminate these as part of the `good practice' models being developed by the Environmental Health Division of the Ministry of Health 1.4 Estimates of funding gaps and potential Future resource availability Section 5 assesses the amount of resources that are potentially available for sanitation activities under current overall plans. · In 2002/03, the estimated sanitation expenditure of UShs 14 billion represented around 6% of the on-budget funds that were potentially available for sanitation (and other) expenditures from all the relevant conditional, development and other grant sources · The overall GoU potential resource `pot' (including various budget lines in MoH, DWD, MoES and local government budgets) that can also be accessed for sanitation activities is planned to increase by almost 40% over the next three years, but there will be many competing demands for this money · If sanitation funding continued to account for around 6% of the potential `pot' then around UShs 19 billion would be available form on-budget sources by 2005/06 - if the proportion could be increased to 10%, then UShs 32 billion would be available by the same date. However, allocation to appropriate sanitation activities for this would require work on measures such as those discussed in the previous section. Estimates for 2002/03 suggest that of the potential funding sources within each Ministry (including conditional grants) that could be spent on sanitation, the Ministry of Education and Sports spent 12% on sanitation, the Directorate of Water Development 5% and the Ministry of Health 3%. Very small amounts are used for sanitation form the Local Government Development Programme, possibly reflecting low prioritisation of sanitation at the local level. Future resource needs Also in section 5, various previous studies that estimate sanitation investment needs are summarised and the aggregated resource requirement is compared to trends and likely availability of funds. The estimated stated annual investment needs for sanitation are UShs 47 billion and this would represent 20% of the total funds potentially available for sanitation for 2002/03 from the various on-budget sources (but note that this is only one estimate that would need careful review). This would represent a significant increase on the estimated 6% that is currently spent on sanitation form various conditional, development and other grants. However, it is strongly recommended that the sanitation `funding gap' is recalculated after developing a sanitation strategy as discussed in section 6. Scope for increasing finance from non-public sources 5 Budget Mechanisms For Sanitation Financing - Final Report A good way of raising extra funds to plug the potential `funding gap' is to explore the possibility of levering more off-budget resources. The scope for this is assessed at the end of section 5. The analysis suggests that there have been limited successes in Uganda, and that further attempts could be made, for example by: · Piloting the use of a sanitation levy on water sales to fund a broad range of sanitation activities in urban areas · Encouraging use of micro-credit as a way of raising money for commercial activities, household toilets and community sanitation projects · Exploring build-own-operate contracts or leasing options for the construction, operation and maintenance of al public latrines · Exploring partnerships with soap manufacturers to part-fund a national sanitation awareness campaign · Replicating models for contracting / coordinating with NGOs to provide hygiene promotion services 1.5 Strategic directions for budget mechanisms A three-dimensional strategic approach for sanitation Section 6 draws together a lot of the analysis Access to sanitation Sanitation promotion ­ facilities ­ `Sanitation contained in previous `Sanitation is foremost about as a business' behaviour change' sections. To facilitate the development of budget mechanisms, it would be Accelerated useful to develop a Supply Demand sanitation and hygiene revised strategic improvement at scale framework for sanitation as a whole. The proposed way for Facilitation doing this is shown in the Figure opposite. Enabling environment Sanitation funding requirements based on an integrated strategic plan Future resource needs can then be determined for each of these three dimensions for accelerating sanitation and hygiene improvement at scale. This might best be done through the development of an integrated and sector-wide strategic plan for sanitation, which sets out: · Objectives and main components 6 Budget Mechanisms For Sanitation Financing - Final Report · Targets for each key component · Detailed activities, costs and expenditure requirements · Institutional responsibilities (national, local and across different Ministries and Departments) · Resourcing requirements at national and local levels The information and recommendations in sections 4 and 5 of this report would be useful in the development of this strategic plan and the assessment of funding requirements. Another important issue to address will be to clearly distinguish between national and local funding requirements: · National level activities will be performed though departments in different Ministries and might cover activities such as: media advocacy (EHD), TSU support roles (DWD), Area Support Team activities (MoH) etc. · Local level activities will be run through local governments at municipality, district and sub-county levels and might cover activities such as: household hygiene promotion by community health workers, toilets in schools etc. Establishing sanitation budget mechanisms Once funding requirements are clearly documented, it will be possible to clarify budget mechanisms. For national level activities, it will be essential to understand very clearly the way in which the budgets of each relevant ministry (and department) are organised and to identify existing or new budget lines for different needed activities. For local activities the guidelines and use of different conditional grants will need to be reviewed to assess the potential scope of using these funds. Possibilities within the new FDS budget guidelines will also need to be explored. In this context, it is also necessary to identify ways of providing incentives to local governments to undertake appropriate sanitation related activities. It would be also useful to explore other non-public sources such as household and community resources through own construction or connection / user charges, private sector funding through public-private partnerships (e.g. for hand-washing campaigns, through lease for public toilets, etc.) or through micro-finance for household toilets. An integrated budget management framework Section 6 also sets out an example national sanitation budget management framework matrix. All key activities are listed down the left hand side and all sources of funds are listed across the top. The framework also contains an assessment of planned outputs at the far right hand side. The advantages of using an approach like this would include: · It provides a framework for the integration of all institutional budgets 7 Budget Mechanisms For Sanitation Financing - Final Report · It helps to illustrate where the funding gaps are · It provides a better method for arguing for resources from the Ministry of Finance · It shows how resource use can be linked to outputs and a set of outputs leading to desired sanitation and health outcomes · It provides a method for monitoring both the use and the impact of funds A similar budgeting framework could be cascaded down to the district level and below. To minimise the amount of work required at the district level, and to assess performance against the expenditure in the sector as a whole, it might be better to combine sanitation into either a health or water budget management framework matrix. Note that the matrix includes roles and funding sources for all key players in the water and sanitation sector ­ the Directorate of Water Development, National Water and Sewerage Corporation, Ministry of Health, Ministry of Education and Sports, NGOs, private sector etc. Section 9 contains an outline matrix for use at national and local government levels. Resource allocation principles Section 6 discusses three types of resources allocation within the sanitation sub-sector: · Allocation between the different types of sanitation expenditure · Allocation between rural, small town and urban sanitation · Allocation between districts and municipalities Experience around the world provides evidence that well-targeted investment in hygiene promotion can have a significantly greater impact on sustaining sanitation improvement than public investment in latrine and toilets. Based on the sector-wide strategy, the Sanitation sub-sector working group (SSWG) would be able to agree on broad percentage breakdowns between software activities (such as hygiene promotion) and hardware expenditure on infrastructure. Over time, the proportion of resources devoted to hardware should fall, compensated by more off- budget finance provided by the private sector, NGOs and communities for capital expenditure. This may imply a greater proportion of on-budget sanitation funding via the Ministry of Health. Data presented in section 3 of this report estimates that in 1998/99 approximately equal amounts of sanitation money was spent on rural / small towns combined and on large towns. By 2002/03, approximately one and a half times as much money was targeted at the former group. The agreement of the allocation between rural, small towns and urban areas is subjective and is to a large extent a political decision. However, the fact that almost 90% of Ugandans live in rural areas, and that the majority of poor people live in rural areas, provides some argument for increasing resource allocation in those places. 8 Budget Mechanisms For Sanitation Financing - Final Report It should also be remembered that most urban sector investment benefits those people with piped sewerage who often account for 25% or less of the urban population. Having said this, it is only certain types of sanitation resourcing that can be influenced in this way, such as the overall amounts allocated to any urban and rural sanitation projects. Under the Fiscal Decentralisation Strategy, an increasing amount of resource allocation decisions are being made at the local government level and so lobbying to boost the profile of sanitation at this level will be a main way in which resources can be increased (in both urban and rural areas). Given the limited available information, it has not been possible to review sanitation resource allocation across the districts and municipalities of Uganda. In reviewing the allocation of resources, various other factors should also be considered. In line with national and sector policy objectives, more money should go to those parts of the country with: · Higher levels of poverty (to meet poverty reduction strategy goals) · Lower levels of current basic sanitation (to meet `some for all rather than all for some' policy goals) · Higher chances of making a significant improvement in performance (in line with public sector efficiency goals) The SSWG should review how resources are currently allocated between districts as part of the WSCG, PHCCG and SFG, and see how this coincides with poverty levels and with current sanitation profiles. Assuming that it is those parts of the country with lowest sanitation indicators that have the biggest chances of improving performance, there should be lobbying to assign more resources to those places. This will need to be combined with careful monitoring (perhaps using a budget management framework like that presented in section 6) so that efficiency and effectiveness in the use of resources can be checked. It needs to be emphasised that major resource allocation changes will not occur without changes to the priorities of decision makers at local government levels. The `lobbying' role will therefore be crucial. Finally, it is worth emphasising that the information contained in this report should be linked into the broader resource allocation review currently being conducted for the Directorate for Water Development as well as the ongoing exercise for preparing the Health Sector Strategic Plan II (HSSP II). A case should be made for a greater and a better allocation of resources for sanitation related activities wherever possible. Development needs Section 6.8 sets out suggested development needs in relation to sanitation budgeting and financing. These would benefit from external support and are summarised as: Issue Development Needs What Where a. Improved information: 9 Budget Mechanisms For Sanitation Financing - Final Report Need for improving the Advising on, and reviewing of, the SSWG accuracy of sanitation strengthening of the data collection systems by expenditure and outcomes data DWD, NGOs, household surveys and local government Need for better estimate of Agreement and completion of a national SSWG overall national sanitation sanitation budget management framework resource availability b. Development of a sector-wide sanitation strategy Need to more clearly specify Development of the three-dimensional model SSWG objectives and components for for sanitation: supply, demand and facilitation a joined-up sanitation strategy Need for more realistic Integration of schools, urban and rural SSWG preparation and better sanitation investment needs into a single plan coordination of investment with realistic specification of what is achievable plans given likely resources Need for more effective Review of resource allocation criteria between SSWG allocation of resources urban and rural areas, different types of nationally sanitation expenditure and different parts of Uganda Need to lever more non-public Development of capacity to identify and EHD finance lobby for off-budget resources Need to review subsidisation Input into the proposed study of water and SSWG policy sanitation sector subsidy policy c. Support to local government sanitation plans Need to ensure that sanitation Costing of best practice models and selection EHD improvements can be obtained of those giving good value for money as economically as possible Need for better prioritisation, Preparation and communication of improved EHD coordination and use of district sanitation planning, budgeting and resources for sanitation at local management guidelines government levels Need to strengthen regional Support to Technical Support Units DWD advisory support for sanitation Need for greater transparency Development of sanitation (and water) MoWLE / of sanitation performance performance `league tables' for each district / MoH municipality Need to give incentives for Review of water and sanitation, and primary SSWG greater expenditure on health care conditional grant guidelines sanitation Need to mirror the sector wide Development of a system for coordinating all District / approach at the district / water and sanitation sector wide plans and municipality municipality level budgets at the local government level water offices Key: WSS = water and sanitation sector; SSWG = Sanitation Sub-Sector Working Group; EHD = Environmental Health Division; MoWLE = Ministry of Water, Lands and Environment; DWD = Directorate for Water Development. Action plan Section 6 ends with a suggested action plan, divided into areas of responsibility for key stakeholders. Sanitation Sub Sector Working Group Actions When 10 Budget Mechanisms For Sanitation Financing - Final Report (i) Budgeting framework · Lobby for separate budget lines for sanitation in local authority budgets Immediate under health, water and other sections (under revised FDS) priority · Lobby for inclusion of sanitation related performance indicators (under Immediate revised FDS) priority · Review, approve and press for strengthening of sanitation activities in Immediate PHCCG and WSSCG guidelines priority · Complete national sanitation budget management framework for Jan ­ Mar 05 2005/06 (ii) Strategy framework · Coordinate the development of an integrated sanitation strategy Jun ­ Aug 04 document which includes overall objectives, targets, activities (at national and local levels with their costs) and resource estimates · Coordinate the development of an integrated M&E system that includes Sep ­ Mar 05 the use of `golden' performance indicators and district level performance league tables (iii) Resource allocation · Identify and influence sanitation resource allocation trade-offs that need Oct ­ Dec 04 to be addressed (rural / urban, inter-district etc.) (iv) Resource generation · Clearly identify budget lines at national and local levels in relation to the Ongoing sector-wide strategy · Ensure that there is a push for more non-public funding to support national hand-washing campaigns, construction of public latrines etc. Environmental Health Division Actions When (i) Strategy framework · Revise first draft of HSSP II linking resources needs to objectives, outputs Immediate and activities in each of the three strategic areas (enabling environment, priority promotion of demand, strengthening of supply) · `Trigger' and manage the development of the integrated sector-wide sanitation strategy through the SSWG Jun ­ Aug 04 · Identify the scope and lobby for the inclusion of sanitation components in other health programmes such as malaria and guinea worm eradication Ongoing within MoH · Increase the provision of Secretariat support to the SSWG to follow up on key issues and recommendations Ongoing (ii) Increased prioritisation for sanitation at local levels · Draft revised guidelines to strengthen sanitation focus within the PHCCG Immediate · Train District Health Inspectors in improved planning and budgeting for priority sanitation Jul ­ Dec 04 · Promote and disseminate cost-effective best operational practice models in districts Jul ­ Dec 04 · Support local government to link best operational practice models (BOPs) to their plans and budgets to ensure long term sustainability Sep 04 ­ Mar 05 · Oversee introductionof incentive mechanisms for better village hygiene Ongoing (iii) Resource generation · Continue lobbying for more resources to support national level work (e.g. Ongoing through HPAC) · Strive to identify additional non-public funding to support national Ongoing hygiene awareness campaigns (soap manufacturers?) etc. Directorate for Water Development Actions When 11 Budget Mechanisms For Sanitation Financing - Final Report (i) Strategy framework · Contribute to the development of the integrated sector-wide sanitation Jun ­ Aug 04 strategy by the SSWG · Review SIP15 draft to ensure that sufficient resources are allocated to Jun ­ Aug 04 sanitation and that they are allocated in the best way (with reference to the integrated strategy) (b) Increased prioritisation for sanitation at local levels · Draft revised guidelines to strengthen sanitation focus within the WSSCG Immediate · Monitor the success of NGO involvement in community mobilisation priority and hygiene promotion and consider how to expand this role to more Jun ­ Dec 04 households · Guide TSUs in the provision of better sanitation support Ongoing (c) Resource generation · Strive to identify more non-public funding for public toilets, e.g. through Ongoing leasing and `build-own-operate' contracts Ministry of Education and Sports Actions When (i) Strategy framework · Appoint a nominated person / continue to contribute to SSWG meetings Immediate · Contribute to the development of the integrated sector-wide sanitation strategy Jun ­ Aug 04 (ii) Own strategy · Review own strategies for improving sanitation and hygiene awareness through schools Jun ­ Dec 04 · Review the possibility of supporting improved sanitation facilities in existing schools Jun ­ Dec 04 Non Government Organisation Actions When (i) Strategy framework · Contribute to the development of the integrated sector-wide sanitation Jun ­ Aug 04 strategy Jun ­ Dec 04 · Review own strategies for improving sanitation and hygiene awareness Local Government Actions When (i) Performance improvement · Raise the profile of sanitation through better publicity of benefits, more Ongoing integrated planning and budgeting · Try out models of best practice and share successes / learning Ongoing 12 Budget Mechanisms For Sanitation Financing - Final Report 2 Introduction 2.1 Background The Government of Uganda (GoU) has identified sanitation as one of the key issues facing the water and sanitation sector (WSS). This is reflected in the progress report on the Poverty Eradication Action Plan (PEAP) and the Millennium Development Goals (MDGs) stating that "increased policy attention" will be given to environmental sanitation, and in the ongoing PEAP revision that also identifies sanitation as needing a high priority at the national level. Progress has been made with the Memorandum of Understanding (MoU) in 2001 that showed agreement on role of the Ministry of Health (MoH), the Ministry of Water, Lands and Environment (MoWLE) and the Ministry of Education and Sport (MoES) regarding different sanitation sub-sectors. The MoU stipulates responsibilities as follows: · MoWLE ­ planning investments in sewerage services and public latrines in towns and rural growth centres (and promoting hygiene around new water points) · MoH ­ household hygiene and sanitation · MoES ­ school latrine construction and hygiene education The two key issues that require most attention are improving the definition of roles and responsibilities at the district and lower levels and the question of sanitation financing to match and support the institutional responsibilities. This is reflected in one of the undertakings for sanitation in the 2003 Water and Sanitation Joint Sector Review (JSR): "In order to facilitate the operationalisation of the MoU, the sub-sector working group will also establish i) clear budget mechanisms for sanitation at all levels; and ii) test models in selected districts and urban councils to guide future strategy, work plans, budgets, implementation mechanisms and coordination at district level." As a practical way forward to implement the sanitation undertakings, the MoH Environmental Health Division (EHD), with technical assistance of the World Bank Water and Sanitation Programme for Africa (WSP-AF) and the UK Department for International Development (DFID), will provide follow up support as part of the overall `Program Of Capacity-Building Support In Environmental Health And Sanitation In Uganda'. This program is designed to assist the GoU in achieving its national sanitation and hygiene promotion objectives. The program will strengthen the central functions of the EHD of the MoH relating to policy and legislation development, national co-ordination, monitoring and district support and enhance the effectiveness of implementation in the districts. It ultimately aims to become integrated within the Health Sector Sector-Wide Approach (SWAp) and the emerging Water and Sanitation Sector SWAp. This study of budget mechanisms for sanitation is as a part of this support program. 2.2 Scope of sanitation The ToR for this study have already identified three sanitation sub-sectors: · Household / institutional sanitation in urban and rural areas (non-piped) 13 Budget Mechanisms For Sanitation Financing - Final Report · Urban sanitation in larger urban areas and small towns (piped) · Hygiene promotion in urban and rural areas The study has used the definition developed and agreed at a sanitation stakeholder workshop in Jinja, Uganda in February 2004. This includes: · Safe disposal of human excreta (faeces and urine) · Good personal and domestic hygiene practices · Safe disposal of solid and liquid waste · Safe collection, storage and use of water, especially for drinking · Control of insect and rodent vectors such as flies, rats etc. 2.3 Report structure This report follows an Inception Report dated 14 January 2004 and an Interim Report dated 31 January 2004. It sets out: · Current institutional arrangements and financial resource flows · Constraints and opportunities for better resource use · Estimates of funding gaps and funding potential · Strategic directions for the development of budget mechanisms including priorities and an action plan 2.4 Acknowledgements The author of this report wishes to acknowledge the following people for the assistance given in its production: · Paul Luyima and his team at the EHD, MoH, Uganda · Sam Mutono and the rest of the Sanitation Sub-Sector Working Group (SSWG) · Members of the MoH Policy Advisory Committee (HPAC) · Meera Mehta, Anthony Waterkeyn, Maimuna Nalubega, Andreas Knapp and others at WSP-AF · Simon Kenny at DFID · All the other people who gave valuable comment and guidance, including those set out in Annex 1 Special thanks are extended to those who attended the HPAC meeting on 2 June and the SSWG meeting on 4 June. Valuable comments were received on the draft of this report. 14 Budget Mechanisms For Sanitation Financing - Final Report 3 Current institutional arrangements and financial resource flows This section sets out an overview of responsibilities for sanitation, the sources of actual and potential funding for sanitation activities, estimates and analysis of past expenditure, a comparison of responsibilities with funding availability, and notes for improving the quality of future financial data. 3.1 The Memorandum of Understanding In 2001, the MoWLE, MoH and MoES signed a MoU that set out responsibility for sanitation functions: MoWLE for planning investments in sewerage services and public facilities in towns and rural growth centres (and for hygiene education around new water points) · MoH for household hygiene and sanitation · MoES for school latrine construction and hygiene education There has been a lot of debate about the impact of this MoU and a commonly held perceived effect is that, although responsibilities are clear, there are: · Poor mechanisms for coordinating the roles of these three Ministries (and other stakeholders) · Unclear mechanisms for ensuring that resources follow the responsibilities These (and other) issues are analysed in more detail below. 3.2 Assessment of current sanitation responsibilities A good starting point is to analyse current responsibilities with respect to sanitation functions in more detail. These are set out in Table 3.1. This table shows that, in practice, the responsibilities for sanitation span far wider than the three Ministries that signed the MoU. It also shows that there is overlap in the conduct of many activities ­ this overlap can sometimes be a good thing as it provides multiple resource opportunities, but it might sometimes lead to an inefficient use of resources. More detail surrounding this data is presented in Annex 3 to the report. A review of Table 3.1 suggests that: · A significant proportion of sanitation related activities are undertaken by parties external to the MoU · The MoH, DWD, MoES, MoGLSD and some NGOs prepare and disseminate hygiene promotion materials ­ there is more scope for sharing these 15 Budget Mechanisms For Sanitation Financing - Final Report · MoH field workers combine both hygiene promotion and sanitation enforcement functions (but anecdotal evidence suggests that on the enforcement side, bad sanitation practices rarely lead to prosecutions) · Responsibility for setting sanitation policies, developing guidelines, setting regulations and monitoring is particular widely split across institutions · A broad range of institutions are involved in toilet construction · Fewer institutions are involved in urban sewerage and solid waste management functions There are apparent overlaps between Ministry and local government responsibilities for many activities 3.3 Local government responsibilities Under the programme of fiscal decentralisation in Uganda, local governments are getting more and more responsibility and autonomy about how funds devolved from the centre are spent. Current responsibilities for sanitation activities at the local government level include: · District water offices have the responsibility for hygiene promotion around new water points · District health offices conduct hygiene awareness raising functions in some communities and inspect the environment health of premises · Community development assistants mobilise community groups and provide some environmental health awareness raising · Teachers cover hygiene as part of the school curriculum and school inspectors assess sanitation conditions of schools · Municipalities provide limited refuge collection and disposal services However, many problems exist in terms of accessing enough funding from an overall amount that must cover many competing demands for resources. Table 3.2 gives an example of some of the issues facing local government in its efforts to improve the provision of sanitation. 16 Budget Mechanisms For Sanitation Financing - Final Report Table 3.1: Sanitation responsibilities Sanitation activity Institution EHD DW TSU Local NWSC MoES MoGLSD Private House- NGOs CBOs MoH D Govt. Sector holds 1. Sanitation promotion National advocacy campaigns ü District level campaigns ü ü ü Hygiene promotion around new water points ü ü ü ü Community hygiene promotion ü ü ü ü Training of health workers ü Preparation of materials ü ü School based hygiene promotion ü ü Training of teachers ü Training of community development workers ü ü ü Training of masons ü ü Development of toilet technology models ü ü Inspection and licensing ü ü ü Preparation of sanitation work plans for local ü ü government Policy development, guidelines, regulation and ü ü ü ü ü ü monitoring 2. Household, community and institutional toilets Rural household toilets ü ü ü ü Urban household toilets ü ü ü ü Public toilets in urban informal settlements ü ü ü Public toilets in public places ü ü ü ü School toilets ü ü ü Toilets in health facilities ü ü Toilets in other institutions ü 17 Budget Mechanisms For Sanitation Financing - Final Report Table 3.1: Sanitation responsibilities (continued) Sanitation activity Institution EHD DW TSU Local NWSC MoES MoGLSD Private House- NGOs CBOs MoH D Govt. Sector holds 3. Urban sewerage and solid waste management Residential collection of waste ü ü Public street collection of waste ü ü Transportation of garbage to disposal sites ü ü Treatment and disposal of garbage ü Connections to the sewerage network ü ü Maintenance of the sewerage network ü ü Sewerage treatment and disposal ü ü Note: This table has been completed after discussions with a sample of stakeholders and review of documentation. It should be viewed as an indicative assessment of current responsibilities. TSUs are financed and managed by DWD. More detail is supplied in Annex 3. Key: EHD = Environmental Health Division; MoH = Ministry of Health; DWD = Department for Water Development; TSU = Technical Support Unit; NWSC = National Water and Sewerage Corporation; MoES = Ministry of Education and Sports; MoGLSD = Ministry of Gender, Labour and Social Development; NGOs = Non-governmental organisations; CBOs = community based organisations. 18 Budget Mechanisms For Sanitation Financing - Final Report Table 3.2: Illustration of issues facing local government ­ the case of Masaka Examples of good practices leading to good Examples of problems facing the good use of use of funding for sanitation funding for sanitation · Support from the Technical Support · There is no district water and sanitation Unit (TSU) to organise joint meetings committee and this is said to hinder joint between water and health officials planning for sanitation and to do joint supervisions of · There is unrealistic coverage data for construction work around new water adequate sanitation and the data that is points available is focused around water points · Joint seminars and training · There is a need to manage refuse workshops on sanitation with health, collection in growth centres and to water and community development promote hygiene education around lake workers landing sites · UNICEF is working in 5 sub- · In the Masaka District Development counties to promote hygiene and Plan, there are no specific targets sanitation in schools; it has also mentioned for improved sanitation ­ as trained some Parish Development resources are allocated at achieving Committee members in techniques targets, then sanitation activities are losing for the promotion of sanitation out · The Municipal council has had some · The Schools Facilitation Grant is used to success in contracting out the fund latrines in new primary schools, but operation of public toilets there is no funding for existing schools · One sub-county (Kkingo) claims to · There are unfilled posts for health have increased pit latrine coverage assistants and health inspectors, yet it is from 40 to 67% over 2 years, claimed that (due to fiscal pressures) primarily through the extension there is a ban on the recruitment of new messages of community development health officers at the moment workers Source of data: Selection of issues raised in discussions with officers of Masaka District and Municipality Councils, January 2004. Note this table is intended as a case study illustration not as a definitive set of issues that necessarily affect all or even most parts of Uganda. The opportunities and constraints for more and improved sanitation funding are assessed in more detail in section 4 of this report. 3.4 Mapping of current funding sources The way that funds are currently made available to sanitation activities is shown in Figure 1. As shown in Figure 1, funding for sanitation activities is obtained from various sources, both `on- budget' and `off-budget' (or non-public). However, the decision point for how much is actually spent on sanitation activities is primarily at the local government level. The main sources of `on-budget' finance are: · Budgetary support provided by the international development partners ­ this is increasing in importance and has been balanced by a reduction in project based support 19 Budget Mechanisms For Sanitation Financing - Final Report · The Primary Health Care Conditional Grant (PHCCG) ­ 50% of this is specifically ear- marked for drug purchases, the remainder has to be split across 7 other primary health care programmes, of which environmental health is one · The Schools Facilities Grant (SFG) ­ this covers the construction of new primary schools, all of which should receive latrine stances · The Water and Sanitation Conditional Grant (WSCG) ­ there is a guideline that states that 5% of this money should be spent on `software' activities including hygiene promotion (but this is not mandatory) · The Local Government Development Programme (LGDP) ­ this is money that is set aside for infrastructure development projects derived from a participatory mechanism for identifying community and sub-county priorities · The Equalisation Grant represents funds set aside for supporting the poorest parts of Uganda Figure 1: Indicative sources of funding for sanitation activities in Uganda Development Project aid NGOs Partners Budget PHCCG Micro MoH Finance 60 Town support EHD Councils SFG MoES 55 Districts Sub WSCG DWD Counties Comm- MoFPED MoWLE unities KCC NWSC Sub Districts MoLG 13 Munic. LGDP Councils LC3 MoGLSD LC4/5 User charges Community Equalisation Grant On-budget Contributions Private Financial Off-budget Sector Instns. Local Govt Revenue Key: MoFPED = Ministry of Finance, Planning and Economic Development; MoH = Ministry of Health; MoES = Ministry of Education and Sports; MoWLE = Ministry of Water, Lands and Environment; MoLG = Ministry of Local Government; MoGLSD = Ministry of Gender, Labour and Social Development; DWD = Department for Water Development; NWSC = National Water and Sewerage Corporation; KCC = Kampala City Council. PHCCG = primary health care conditional grant; SFG = school facilities grant; WSCG = water and sanitation conditional grant; LGDP = local government development programme. LC3/4/5 = level of local government applicable to the descriptions shown in the circles directly above the LC reference. Staff resources provided by the MoH (health inspectors and health assistants), MoES (schools inspectors and teachers), MoWLE (water officers) and the MoGLSD (community 20 Budget Mechanisms For Sanitation Financing - Final Report development workers) ­ these people are active in the community and provide varying support to hygiene promotion and sanitation enforcement across Uganda · Funds generated by local government and spent on a range of activities such as solid waste management and public toilets · Some project aid such as support to TSUs The main sources of `off-budget' or non-public finance are: · The majority of development partner support to sanitation projects ­ this has fallen significantly over the past three years alongside the move to budget based support · NGO funded projects (with or without development partner support) · Micro-finance institutions ­ these are growing in importance within Uganda (both formal institutions and community run bodies), but there is little evidence of significant finance being directed at sanitation activities · Private sector / financial institutions ­ there are low current levels of financing for privately built and run public toilets, the construction of latrine slabs by masons etc. · User charges ­ urban consumers who are linked to the piped sewerage network pay a proportion of the cost of this service to the National Water and Sewerage Corporation (NWSC) ­ anecdotal evidence suggests that this might be around 10%, but further work would be needed to confirm this figure · Community contributions to sanitation projects ­ e.g. households provide time and labour for the construction of new water points and for the introduction of improved sanitation practices around the points · Household expenditure on their own latrine construction 3.5 Trends in sanitation on-budget funding The current best estimates of on-budget sanitation financing trends are shown in Table 3.3 and Figure 2. The data presented are only indicative as it is difficult to highlight specific amounts devoted to sanitation for various reasons, such as: · There are many departments and organisations which fund sanitation · There is often the `lumping' of water and sanitation budgets together · Many elements of sanitation expenditure have never been estimated before at the national level 21 Budget Mechanisms For Sanitation Financing - Final Report Table 3.3: Analysis of approximate on-budget sanitation funding trends (UShs million) 98/99 99/00 00/01 01/02 02/03 Overall split by institution Department for Water Development 4,864 4,208 8,341 2,283 2,410 National Water and Sewerage Corporation 2,268 2,151 2,252 2,186 2,252 Ministry of Health 1,727 1,717 2,141 1,914 2,341 Ministry of Education and Sport 1,462 3,237 4,368 6,277 6,367 Local Government Development Programme 0 0 20 40 40 Local Government 250 250 250 250 250 Total estimated expenditure 10,571 11,563 17,372 12,950 13,660 Overall split by location Schools 4,013 6,491 10,979 6,763 6,367 Large town households 3,195 3,075 3,032 2,909 3,088 Rural and small town households 3,363 1,997 3,361 3,278 4,205 Total estimated expenditure 10,571 11,563 17,372 12,950 13,660 Table 3.3: (continued) Overall split by expenditure type Urban piped sewerage 2,268 2,151 2,262 2,206 2,272 School latrines 3,338 5,745 10,318 6,714 6,067 Public, institutional and household latrines 1,642 419 430 421 287 Hygiene promotion 2,822 2,757 3,448 2,921 3,591 Institutional support / training 251 241 665 438 1,193 Solid waste, vector controletc. 250 250 250 250 250 Total estimated expenditure 10,571 11,563 17,372 12,950 13,660 Overall split by cost type Recurrent costs 4,901 4,119 6,955 4,319 5,699 Development costs 5,670 7,445 10,418 8,631 7,961 Total estimated expenditure 10,571 11,563 17,372 12,950 13,660 Note: These are very rough estimates and rely on several assumptions. More information is provided in Annex 2. On-budget funding does not include amounts of money made available directly to sanitation projects by NGOs, the private sector, micro finance, user fees and community contributions. These sources are discussed later in the report. 3.6 Trends in sanitation off-budget / non-public funding There are a variety of other off-budget and non-public funding sources for sanitation activities. By their very nature, these are difficult to estimate accurately. A list of example recent projects is presented as part of Annex 2. The ones for which funding estimates have been obtained shown in Table 3.4 below. 22 Budget Mechanisms For Sanitation Financing - Final Report Table 3.4: Approximate funding of selected recent off-budget sanitation projects Project UShs billion Kampala Ecological Sanitation Pilot Project 1.8 South Western Towns Water and Sanitation Project 0.1 Kampala Urban Sanitation Project 11.0 Sanitation Master Plan for Kampala City 2.0 Design of Gaba III 0.3 Kampala Environmental Planning and Management 1.1 Total 16.3 Note: These funding estimates are very approximate and cover the life of the projects (average of around 3 years). The majority of off-budget funding for which data has been obtained relates to projects based in Kampala. If it is assumed that projects last an average of 3 years, funding of around UShs 5.3 billion per year is currently available for sanitation projects based in Kampala. It is difficult to estimate what other amounts of off-budget funding is currently available to sanitation projects in Uganda. However, discussions with stakeholders suggest that funds provided by the private sector, micro finance and community contributions are small. There have been consistent fund allocations of NGOs over past years, but it is not known how much these have been in total. One estimate is that up to UShs 1 billion per annum may have been spent by NGOs, but the accuracy of this figure is not known. The Uganda water and sanitation network (UWASNET) is currently researching this area further. 3.7 Analysis of resource allocation The data that has been obtained on expenditure trends needs to be treated with extreme caution as a lot of it is based on verbal and percentage estimates. However, various overarching conclusions can be made. Analysis of overall expenditure trends Total sanitation expenditure appears to have fluctuated over the past 5 years, with a peak in 2000/01 of UShs 17 billion. This peak coincides with the last year of significant donor project funding ­ a higher proportion of donor funds are now allocated to general programme support. After considering the effects of inflation, there is no evidence of significant increases or decreases in funding devoted to sanitation activities for the period as a whole. On-budget resources have ranged from about UShs 11 to 17 billion per annum. Another UShs 1 billion or so may have been contributed by NGOs each year, but this figure needs further review. Recently, additional amounts of up to UShs 5 billion per annum are being targeted on improving sanitation in Kampala. 23 Budget Mechanisms For Sanitation Financing - Final Report Figure 2: Estimated on-budget sanitation funding trends by institution, location, expenditure type & cost type (UShs million) 20,000 20,000 15,000 15,000 10,000 Rural and small towns 10,000 5,000 Large towns 5,000 Schools 0 98/99 99/00 00/01 01/02 02/03 0 98/99 99/00 00/01 01/02 02/03 DWD NWSC MoH MoES LGDP Local Govt. 20,000 20,000 15,000 15,000 10,000 Development expenditure 5,000 10,000 Recurrent 0 5,000 expenditure 98/99 99/00 00/01 01/02 02/03 0 98/99 99/00 00/01 01/02 02/03 Urban piped sewerage School latrines Other latrines Hygiene promotion Institutional support / training Solid waste, vector control etc. 24 Budget Mechanisms For Sanitation Financing - Final Report However, with the move towards less project based aid and greater autonomy for local government expenditure, it is becoming harder and harder (under current budgeting mechanisms) to assess exactly how much money is spent on sanitation. Analysis by institution Since 1998/99, an increasing proportion of estimated on-budget sanitation expenditure has been obtained via the MoES budget, rising from around 14 to 17% of the total by 2002/03. The share derived from the DWD has fallen from an estimated 46% to 18% over the same period and that obtained from the NWSC has fallen from around 21% to 16%. The share of on-budget finance provided by the MoH has remained fairly constant in the region of 13 to 17%. Local government revenues have contributed less than 3% of funding levels. The estimated amount of funding obtained from the LGDP under the MoLG has been less than 0.3% on-budget finance each year. Analysis by schools, urban and rural areas Over the past 5 years, there has been a significant amount of money devoted to the construction of latrines in schools ­ mainly in newly constructed primary schools. This is estimated to have accounted forbetween 37 and 63% of total on-budget sanitation related expenditure each year. Over the same period, there appears to have been a growing movement from large towns towards small town/rural focused expenditure. Excluding schools expenditure, in 1998/99, approximately equal amounts of total on-budget sanitation expenditure was targeted at large towns and small town/rural areas. By 2002/03, approximately one and a half times as much on- budget money was targeted at the latter. However, on equity grounds, there might still be arguments for spending an even higher proportion of money in rural areas as approximately 85% of Ugandans live in these places (and additional people live in small towns). This argument has to be balanced by the fact that the cost of providing a person with sanitation in an urban area is higher than that in a rural area. There are also equity issues surrounding the allocation of resources in urban areas, since the majority of on-budget expenditure there is spent on piped sewerage ­ quite often, less than 10% of the urban population actually have access to this. A greater emphasis on the poor might well call for greater expenditure on basic sanitation, household and public toilets. Analysis by types of expenditure This should again be treated as an initial indication only. The following analysis is based on a review of on-budget funding estimates, as an analysis of off-budget funding by expenditure type was not possible in the time available for this study. For the 5 years until 2002/03, piped urban sewerage has accounted for about 13 to 21% of total on-budget sanitation expenditure. Latrine construction in schools, other institutions, public places and households has taken up 47 to 62% of the expenditure (of these amounts, over 90% has been spent on school latrines). There have been relatively small amounts spent on solid waste collection, 25 Budget Mechanisms For Sanitation Financing - Final Report vector control etc. amounting to about 2% of annual expenditure. Overall `hardware' expenditure has therefore typically taken up 70 to 80% of the overall on-budget sanitation resources. Hygiene promotion has used 20 to 27% of the funds. However, these amounts have been very difficult to estimate accurately. The figures have been based on estimated proportions of water and sanitation project or grant expenditure related to hygiene promotion, plus specific budget heading such as the production of materials. A further 2 to 8 % has been spent on training, institutional support etc. Around 20 to 30% of total on-budget expenditure has therefore been spent on `software' activities. It could be argued that there is a very unbalanced allocation of resources for sanitation based on who benefits from expenditure. Around three quarters of funds appear to have been targeted on a very small percentage of beneficiaries though school and public latrines and sewerage. Only an estimated quarter has been targeted at the vast majority of people who reside in rural households or poor urban areas. The emphasis on hardware should be confirmed and reviewed, since a higher proportion of well- directed hygiene promotion (and enforcement) expenditure might make a bigger impact on overall health-related sanitation outcomes. The 2003 Joint Sector Review has pledged to review subsidy policies for water and sanitation and this will also have an impact on the hardware - software split. There should also be a review of the proportion of resources targeted at rural households and poor urban households. One effective way of increasing this might be to employ more health assistants. Analysis by recurrent and development costs Over the 5 years reviewed, recurrent costs have contributed to approximately 35 to 45 % of total expenditure with 55 to 65% being devoted to development costs. Analysis of geographical allocation During the time available for this study, it has not been possible to conduct an analysis of how resources have been allocated around Uganda. An assessment of the need to improve the geographical allocation of resources is presented in section 6 of this report. 3.8 Comparison of responsibilities with funding sources The various activities contained in Table 3.1 provide an initial framework for assessing whether there are funds available to deliver the broad range of sanitation- focused functions. Discussions held with a broad range of key stakeholders suggested the following tentative conclusions can be made. A more detailed comparison of responsibilities and funding sources is given in Annex 3. Sanitation promotion 26 Budget Mechanisms For Sanitation Financing - Final Report · Responsibilities for sanitation promotion are very widely spread and budgets tend to form small proportion of overall funding levels · Hygiene promotion is said to be often given a low priority at local government levels and, because of this, does not receive large amounts of funding · One stakeholder pointed out that sanitation promotion activities might well be funded even less than is presumed by most ­ this is because `software' activities on water and sanitation projects are often considered as sanitation related but actually include water related functions such as the training of mechanics · There are especially big concerns about effective hygiene promotion in urban areas, for example in Kampala ­ in 1970 when the city had about 400,000 inhabitants, there were 38 health inspectors; in 2004 when the population is now around 1.5 million, there are reported to be only 10 inspectors (there is on-going work to prepare a sanitation master- plan for Kampala which will address key challenges) Household, community and institutional toilets · Although there are pockets of NGO support, there are no significant amounts of funding available to subsidise households in the construction of latrines ­ however, this is because households are expected to supply the resources themselves · Whilst the SFG provides specified funding for the construction of latrines in new primary schools, there are unclear budget lines for the construction of latrines in old primary schools, in secondary schools and for the maintenance of latrines in schools · Several agencies share responsibility for the provision of public and institutional toilets (such as Central and Local Government, NGOs and the private sector), but funding allocations tend to be low · It may be possible to expand the private sector financing for public toilets Urban sewerage and solid waste management · Through the NWSC and local government, and possibly in the future through the private sector, there are funds available for the provision of piped sewerage services in urban areas ­ however, commonly only 10% of the population have access to these services · There appear to be limited amounts of funding allocated to support the provision of sanitation services for the urban population who do not have access to piped sewerage services ­ these people commonly include the poorest households in towns · Local authorities could devote more of their resources to this, but sanitation is often given a low priority by municipalities · Drainage and solid waste disposal are also key issues in urban areas; in places without piped sewerage systems, there is a problem of where to deposit human waste 27 Budget Mechanisms For Sanitation Financing - Final Report · It may be possible to expand the private sector financing for urban sewerage and solid waste management Overall The above assessment suggests that more resources should ideally be made available to finance: At the national level: · Sanitation and hygiene promotion · Construction of latrines in older primary schools and in secondary schools · Sanitation services for the urban poor (with no access to piped sewerage services) At the local level: · Sanitation and hygiene promotion · Maintenance and rehabilitation of latrines in schools · Sanitation services for the urban poor (with no access to piped sewerage services) Constraints and opportunities for increasing finance are covered in section 4. Section 5 includes a more detailed assessment of the potential for extra funding. 3.9 A note on subsidy policy It is useful to note the current policy for subsidisation of sanitation activities. In effect, school latrine and public latrine construction receive a 100% subsidy. Sewerage services also attract a high subsidy (although there are moves towards greater user fee charging). Household hygiene promotion is 100% subsidised, whereas household latrine construction attracts zero subsidy. These should be looked at as part of the planned review of subsidy policy across the whole of the water and sanitation sector. 3.10 Scope for improving the accuracy of data Finally in this section, it must be emphasised that it has proven very difficult to get 100% accurate data to assess funding flows for sanitation. In fact, it requires a lot of time and effort to get any data at all. There is a pressing need to improve data collection systems for sanitation financing. Steps that can be taken to do this include: · Check that the refinements currently being made to the DWD management information system give adequate attention to sanitation aspects · Ensure that systems are in place so that districts and municipalities report on total sanitation expenditures · Develop a system that summarises all sanitation funding made available by NGOs 28 Budget Mechanisms For Sanitation Financing - Final Report · Review household expenditure survey methodology to ensure that all aspects of sanitation expenditure are assessed and synthesised The need to improve data collection is incorporated into development needs and recommendations set out in section 6. 4 Constraints and opportunities for better resource use This section assesses the current constraints to, and opportunities for, obtaining more resources for sanitation and for making better use of the money that is available. These points have primarily been obtained through discussion with stakeholders. Ideas are brought together at the end of the section and various recommendations are made. 4.1 Constraints From consultations and a review of documentation, several constraints are restricting the level and use of resources for sanitation. For greater clarity, these have been divided into sub-sections. As a result of GoU policy The overarching policy context for sanitation provides some constraints on the identification and use of resources. · The MoU between the three main Ministries with sanitation responsibilities is said by some to have caused less joined-up working between the institutions concerned and a fragmentation / poorer coordination of work (however, others say that it is the decline of the joined-up project approach to water and sanitation that has caused this) · Note that others say that the MoU has helped to clarify roles so that Ministries take them more seriously · Health assistants have the best training and skills to promote hygiene awareness, but under the MoU some claim they are restricted to household visits and are not supposed to go to schools, markets and other institutions (however, others disagree with this and will gladly make these visits if costs can be covered) ­ note that some key sector stakeholders say that health assistants should be encouraged to work outside of households · There is a perceived policy not to subsidise the provision of household latrines ­ although a written reference to this could not be found (note that some NGOs still provide subsidies for household latrines and that there is also a JSR undertaking to review subsidy policy in 2004) · The PHCCG does not specify that any of the money has to be spent on hygiene promotion activities ­ 50% of funds are earmarked for the purchase of vaccines and medicines, but there is resistance within local government to have any other ring-fencing of monies As a result of national resource allocation mechanisms 29 Budget Mechanisms For Sanitation Financing - Final Report The way that resources are allocated between major sanitation functions and between different parts of Uganda might also be having a significant impact on the effectiveness of sanitation related expenditure. · There is no well-developed systematic method for assessing sanitation needs across different parts of Uganda and influencing the allocation of resources accordingly ­ there are strong arguments to suggest that more resources should be targeted at parts of the country where sanitation conditions are worst, but there is little evidence that this is the case · An issue that needs to be addressed before resource allocation can be better targeted around Uganda is to resolve the problem of having different targets for improving sanitation within the MoH and the MoWLE, and having different definitions within the Ministries about what adequate or good sanitation actually means ­ once baseline and target levels of performance are more clearly specified on a district by district basis, these can be used to influence overall resource allocation decisions · As suggested in section 3, a very high proportion of sanitation resources are currently going to the construction of institutional latrines whereas international evidence suggests that the health returns to hygiene awareness programmes are higher · A lot of resource allocation decisions are made at the local government level ­ without changing the priorities of district and municipality decision makers, it will be hard to alter resources allocation mechanisms As a result of recent changes to overall resource allocation processes Over the past couple of years, there has been a major switch in the way that GoU and donor resources are allocated not just to sanitation activities, but also to all public sector programmes. Prior to about 2002, a high proportion of government funds and almost all donor funds were directed at specific water and sanitation programmes in specified parts of the country. For example, the RUWASA project targeted a lot of water and sanitation support to rural parts of Eastern Uganda. This approach has recently been replaced by a system of donor budget support and a Fiscal Decentralisation Strategy (FDS) that allows much more autonomy to local governments on how they allocate resources. This has led to the following constraints in relation to the funding of sanitation activities. · Before the move towards budget support based aid, many donor funded water and sanitation projects had separate sanitation and hygiene promotion elements ­ it is argued by some that the GoU has not transferred sufficient resources away from water to sanitation now that most donor project-based aid has come to an end · Under the big water and sanitation projects, it was common for health officials to be transferred to those projects and to receive allowances for work performed ­ there were separate budget lines for this within projects, but this is now more difficult to manage 30 Budget Mechanisms For Sanitation Financing - Final Report · Over time, the FDS will mean that less and less money can be ring-fenced for sanitation (or anything else) or be subject to conditionality · Relatively small amounts of the PHCCG are devoted to hygiene promotion work As a result of central government management issues Some of the constraints to improved use of resources for sanitation surround management. At the central government level, the issues include: · There is a guideline stating that 5% of the WSCG should be allocated to sanitation and hygiene promotion around new water points, but there is no effective monitoring system to check whether this happens and some anecdotal evidence to suggest that it does not · It is common for large water and sanitation project budgets not to show sanitation components separately, meaning that it is more difficult to assess how much is planned to be spent and how much is actually spent on latrines and hygiene promotion activities · There is no one at the MoES who has a job description that reflects responsibility for the coordination of sanitation activities within schools ­ one officer has taken on this role, but she is not well supported by the rest of the Ministry · There is widespread observation that improving sanitation and hygiene practices in Uganda could make a significant contribution to reducing the incidence of disease and save lives ­ however, the case for this could be made more strongly through a more in- depth analysis of previous work and a synopsis of the experiences in other countries As a result of local government management issues There are also management related reasons at the local government level that contribute to the poor utilisation of resources for sanitation, including: · EHD officials state that there is poor planning by district health inspectors and generally no specific allocation of resources for sanitation and hygiene promotion in district budgets · Health assistants do not always have good systems for effectively planning hygiene promotion activities · Health assistants are sometimes distracted from performing hygiene awareness roles by being asked to do other jobs such as providing vaccinations · Some health and community development staff are lack the facilitation or motivation to effectively carry our their work · There is often little representation of environmental health professionals at meetings which determine resource allocation for health or water programmes · District Directors of Health often have little interest in sanitation promotion 31 Budget Mechanisms For Sanitation Financing - Final Report · District water and sanitation committees tend not to work well, or do not exist at all ­ these are often stated as the best forums for coordinating sanitation activities · In urban areas, poor planning regulations and high pressure on space often leads to the construction of settlements without latrines or toilets · Various sector stakeholders have commented that there is not enough enforcement of sanitation and hygiene ­ this did happen in the 1960s when Uganda had over 90% coverage and reported use of household pit latrines As a result of low prioritisation by local government Under the FDS within Uganda and the fact that less and less money is being earmarked by central government, there is actually a lot of scope for local governments to devote significant amounts of resources to sanitation activities. However, sanitation is often given a low priority and there is some anecdotal evidence to suggest that less money is being targeted at this area. Some of the issues around this are stated below. There can be temptations to construct health facilities or new water points rather than to invest in hygiene promotion activities as the former are more visible to the public and politically more advantageous · Those responsible for resource allocation decisions within district health officers tend to be doctors who place more importance on curative health practices rather than on preventative ones such as hygiene promotion (they have not always been convinced of the credibility of sanitation plans and budgets prepared by District Health Inspectors) · Health inspectors and assistants often find it difficult to access allowances or means of transport to make visits to communities to perform hygiene related roles · There is often weak capacity for planning and budgeting · It has been said by some that sanitation improvement is rarely stated as a priority of communities and therefore tends not to feature in village level development plans ­ further evidence of this is provided by an analysis of the LGDP which has several million dollars available for community projects, yet is said to be funding only one public latrine and one waste skip in 2004 · There have been various suggestions in interviews that the formation of district water and sanitation committees could act as a lever for negotiating for more resources for sanitation ­ however, correspondence from the Ministry of Local Government suggests that there is some resistance to this (as it would involve an overlap of roles with other committees) · Under local government restructuring, allegedly there has been a suggestion to remove the post of District Health Inspector ­ if this happens, it will reduce the potential for sanitation lobbying even further 32 Budget Mechanisms For Sanitation Financing - Final Report 4.2 Opportunities Again, from consultations and a review of documentation, the opportunities for more resources and better resource use for sanitation are set out below. Review of the sanitation policy framework · Providing some sort of subsidy for the provision of household latrines (as part of the overall planned review of subsidies in the water and sanitation sector) ­ however, this should only take place if it can be ensured that the poorest households will be targeted and that the subsidies lead to sustainable behaviour change; both these criteria have proved hard to achieve in many other parts of the world · Providing incentives for sanitation funding ­ for example, a condition of receiving funding for water projects could be that sanitation improvements need to be shown beforehand (it has been said that this is already stipulated as part of the Rural Water and Sanitation Strategy OP15 document) Review of resource allocation mechanisms · Ring-fencing more of the conditional grants for sanitation activities ­ there are precedents for this, e.g. 50% of the PHCCG is allocated for the purchase of drugs; however, in the current climate of decentralisation, overall support for this would be unlikely · One novel idea that might be worth pursuing would be to ring-fence sanitation funding for those districts that have poor latrine coverage and hygiene at present and not to ring- fence funding to districts where performance was deemed satisfactory - conditions could be removed once performance improved over time and this would hopefully give incentives to improve sanitation in the poorer performing districts · Funding the `best practice' models of sanitation and hygiene promotion that have recently been identified by the EHD ­ money could be earmarked for a sample of pilot districts to (hopefully) demonstrate how the `best practice' models can be effectively implemented more widely (note that some other countries have been able to increase and improve sanitation practices at relatively low cost, e.g. a recent programme within Zimbabwe has cost around 56 cents per beneficiary in year 1 and 22 cents in year 2) · Sanitation technology options should be reviewed (in line with the `best practice' work) to ensure that the most cost effective options are chosen, technology is `appropriate' and frequent re-building programmes are not required · The method by which resources are allocated to districts could take more account of current differences in access to good sanitation ­ for example, the October 2003 Annual Health Sector Performance Report shows that pit latrine coverage varies from less than 1% to more than 90% at the district level ­ this would require negotiations with the Local Government Finance Commission (there is a precedent for this as the Ministry of Health 33 Budget Mechanisms For Sanitation Financing - Final Report allocates resources to districts using a complex formula which includes many factors including population, costs of service provision and incidence of disease) · Under FDS, it is becoming increasingly difficult to `ring-fence' money for sanitation ­ there is a need to ensure that sanitation is `mainstreamed' so that financing is delivered sustainably over time Improved management at the central government level · There is scope for improving the coordination and sharing of hygiene promotion work in schools ­ the MoES has the lead in this, but could be better supported by health and community development workers · Under the FDS, the line Ministries will set quarterly reporting formats that will be required at the district and sub-county level ­ there is an opportunity here to give greater and more transparent prevalence to sanitation so that expenditure can be more easily monitored · As part of the FDS, districts will report against performance on key indicators ­ one of these is provisionally set as `percentage of people that use improved sanitation' - this may provide some stimulus to more sanitation financing if clear targets are set and districts are held accountable for the achievement of the targets · There is scope for introducing performance (water and) sanitation `league' tables as has been done in the health sector ­ this will provide some pressures on poorer performing districts to allocate more resources to sanitation Improved management at the local government level · Fiscal decentralisation is becoming embedded in local government and there is growing scope for more resources to be targeted at sanitation if this is a priority of districts and municipalities · Making more and better use of the 8 regional DWD Technical Support Units to promote and support sanitation activities not just around new water points, but more widely · A major way of better managing sanitation activities at the local government level would be through more effective coordination of the activities of all the key stakeholders involved, for example: (i) If there were District Level sanitation sub-sector working groups to mirror the activities of the national group, this would give a much higher profile to sanitation at the district level (however, this might be difficult to set up as many districts do not even have water and sanitation committees); (ii) Extension staff such as the MoGLSD community development workers and the MoH health assistants could work in a more coordinated manner (as set out by models of `best practice') 34 Budget Mechanisms For Sanitation Financing - Final Report · Village water point committees who are generally responsible for the management of water sources could be held more responsible for monitoring sanitation and hygiene practices as well (they are trained to do this, but do not always perform this role) · There is scope to integrate sanitation activities within other on-going health programmes such as malaria control and guinea worm eradication, and MoGLSD community mobilisation and empowerment Raising the profile of sanitation Under the FDS, new methods of transferring funds to districts currently being piloted mean that up to 10% of conditional grants can be reallocated between sectors. Therefore, if districts regard sanitation as a particular priority then there will be scope for moving more money into this area (but also into other areas of course). The resources are potentially there if the perceived importance of sanitation can be raised. This might be done, for example, by: · Funding a national sanitation and hygiene awareness campaign, supported with donor, NGO and private sector investment as much as possible · Coordinating advocacy programmes between national, local government and community levels · Targeting politician an key decision makers with information re the benefits of improved sanitation Some ideas to explore The above discussion and analysis provides various ideas for increasing the amount of resources that could be made available for sanitation and for making better use of existing resources. These are brought together in Table 4.1 and Table 4.2. Table 4.1: Some options for increasing the amount of sanitation resources For the Water and Sanitation Sector Working Group: Idea Advantages Disadvantages Recommendation Provide Directly related to Evidence suggests WSS working group to assess subsidies for sanitation activities; that subsidisation of this as part of the planned the mechanisms can be household latrines overall review of subsidy policy construction of developed to target does not always lead for the water and sanitation household the poor to sustainable sector latrines behaviour change Ring-fence This is more in-line Again, it will be WSS working group to develop parts of with the spirit for the difficult to get more transparent mechanisms conditional FDS (more autonomy support for this for comparing performance grants for low to better performing across districts performing districts) districts For the Sanitation Sub-Sector Working Group: Idea Advantages Disadvantages Recommendation 35 Budget Mechanisms For Sanitation Financing - Final Report Revise the Might be possible to Does not address No change in the MoU (in MoU for more clearly assign the fundamental isolation of fundamental sanitation responsibilities in line issue of increasing changes to the budgetary with funds the priority given to framework ­ see section 6 for sanitation more discussion) Provide bigger A persuasive rather Uncertain way of SSWG to influence and enforce incentives for than a coercive increasing funds conditional grant guidelines, e.g. sanitation approach the requirement of improving financing sanitation before the provision of water Ring-fence Clear increase in There is an overall No recommendation for ring- parts of resources which can move away from fencing as it is extremely unlikely conditional allow flexibility ring-fencing under that this will be accepted; better grants for between different the FDS; it will be for SSWG to try to influence sanitation expenditure headings very hard to get guidelines for spending approval Ring-fence This is more in-line Again, it will be Again, SSWG to aim to parts of grants with the spirit for the difficult to get influence guidelines for low FDS (more autonomy support for this performing to better performing districts districts) Reinforce the This will be relatively No guarantee that SSWG to draft revised guidance guidance notes easy to do more resources will notes for the WSCG and the for sanitation actually be spent on PHCCG so that sanitation is spending sanitation given a greater emphasis Table 4.1 (continued): Some options for increasing the amount of sanitation resources For EHD: Idea Advantages Disadvantages Recommendation Support DHIs Will foster greater District health EHD to develop materials and to prepare support for sanitation offices have to train DHIs in improved better at local decision competing resource planning and budgeting for sanitation plans making levels demands and may sanitation and budgets still chose to prioritise curative health Aim to This will add to The amount of EHD to contact private sector generate higher resources without additional resources companies to support hygiene amounts of putting more pressure that can be raised is awareness campaigns (e.g. hand- `off-budget' on the GoU budget uncertain washing), BOO contracts and finance leasing for public toilets, and to pilot the use of micro credit to support community level sanitation Use TSUs to A temporary existing More time on EHD to prepare guidelines for provide more structure exists across sanitation support how TSUs could more capacity Uganda would mean less effectively support sanitation building time for water and DWD to communicate the support on role of TSUs to the districts sanitation to districts Coordinate Economies of scale Time is required for EHD to plan and conduct a and conduct through conducting a positive impact; national campaign (making as 36 Budget Mechanisms For Sanitation Financing - Final Report sanitation and national programme; immediate results are much use as possible of private hygiene better linkages sometimes difficult sector and NGO resources) and awareness between national and to assess to coordinate national, district campaigns local and local advocacy Support other Structures already Sanitation messages EHD to identify the scope for health exist to target might be lost among broader sanitation promotion programmes communities through a lot of other within MoH health programmes to deliver malaria, guinea worm information and to implement this sanitation etc. programmes messages For TSUs: Idea Advantages Disadvantages Recommendation Use TSUs to A temporary existing More time on TSUs to support piloting of provide more structure exists across sanitation support new approaches district Uganda would mean less sanitation time for water capacity building support Table 4.2: Some options for improving the use of sanitation resources For the Water and Sanitation Sector Working Group: Idea Advantages Disadvantages Recommendation Change district More resources could May cause political WSS working group to review resource be allocated to those tensions; might be allocation criteria for conditional allocation parts of the country seen as penalising grants so that more money is criteria with bigger scope for better performers allocated to those districts / sanitation municipalities with lower levels improvement of sanitation (see section 6 for more discussion) and balance this with a performance rewards approach (making sure that there is also local awareness raising for sanitation) Improve district Will improve the May be seen as WSS working group to revise reporting quality of data for additional district reporting formats so formats performance bureaucracy that the allocation and impact of monitoring sanitation expenditure is easier to assess Agree district Will provide a better May be seen as WSS working group to agree targets framework for central government key or `golden' indicators for monitoring progress imposition on local sanitation, define targets and towards overall government cascade these down to local sanitation targets government Introduce Greater transparency May be seen as WSS working group to publish performance in performance; this additional district / municipality `league tables' has worked well in bureaucracy / performance by key indicator in the health sector imposition the annual water and sanitation sector report 37 Budget Mechanisms For Sanitation Financing - Final Report For the Sanitation Sub-Sector Working Group: Idea Advantages Disadvantages Recommendation Spend a higher Likely to have a Care needed to SSWG to assess the likely proportion of bigger impact on ensure best balance impact of spending a higher money on health outcomes and of national and proportion of resources on hygiene levering household local expenditure hygiene promotion and promotion and resources enforcement, and to aim to enforcement adjust conditional grant guidelines For MoES: Idea Advantages Disadvantages Recommendation Spend a higher Likely to have a Care needed to MoES to develop a strategy for proportion of bigger impact on ensure best balance improved hygiene education in money on health outcomes and of national and schools hygiene levering household local expenditure promotion and resources enforcement Table 4.2 (continued): Some options for improving the use of sanitation resources For EHD: Idea Advantages Disadvantages Recommendation Cost and This is on-going Relies on effective Once models have been tested, disseminate work; will identify implementation of EHD to include resourcing models of cost-effective and the models estimates as part of the `good practice' appropriate dissemination process; lobby to technology methods change conditional grant guidelines accordingly Improve district Would enable better There are EHD to identify best models of level use of existing staff, sometimes a lot of coordination and disseminate coordination transport and other political barriers to these as part of the `good resources break down practice' models being developed Strengthen Would lead to greater Can only be done if EHD to identify best models of community level acknowledgement of communities place monitoring and disseminate monitoring the benefits of a priority on these as part of the `good improved sanitation sanitation practice' models being developed 4.3 Links to the planning and budgeting process The various ideas outlined above for increasing the amount of resources or improving the use of resources for sanitation can usefully be aligned with overall planning and budgeting processes under the FDS in Uganda. This will assist in assigning responsibilities and in determining timings for various actions. Figure 3 sets out a summary of overall planning and budgeting steps and shows where various actions could best be taken. Figure 3: Opportunities for more resources and better use of resources for sanitation, linked to overall planning and budgeting processes 38 Budget Mechanisms For Sanitation Financing - Final Report Water, health and LC2 / LC3 Indicative figures to education consolidate MoFPED presents LC5 sector heads: committees plans and guidelines and e.g. works & prepare LC1 send to LC5 indicative figures technical services, plans districts health 1. Disseminate best 3. Prepare district 4. Develop a national 6. Influence grant practice pro-forma sanitation budget guidelines to community sanitation budget framework emphasise the monitoring guidelines and 5. Influence criteria for importance of 2. Encourage reporting formats allocating funds sanitation community fund between districts raising LC5 Executive Budget framework papers Budgets funds MoFPED confirms Committee prepared for each released by final budget approves BFPs sector priority MoFPED figures and sends to activities, costs and MoFPED planned outputs 11.Improve district level monitoring of sanitation spending and results 12.Disseminate operational models of good 9. Lobby for resource 7. Review district practice allocation to sanitation sanitation budget 13.Empower TSUs to provide better support 10.Identify off-budget matrices 14.Support household and community fund finance opportunities 8. Review sanitation raising financing policies 15.Conduct national sanitation campaigns 16.Publish performance league tables These steps take place at the times shown in Table 4.3. Table 4.3: Timing of planning and budgeting activities Approximate Activities Timing Aug ­ Sep Water, health and education committees prepare LC1 plans Oct - Nov LC2/3 consolidate plans and send to LC5 districts Nov ­ Dec MoFPED presents budget guidelines and indicative figures Dec ­ Jan Indicative figures sent to LC5 sector heads, e.g. health, works and technical services Jan ­ Feb Budget framework papers (BFPs) prepared for sector priorities Feb ­ Mar LC5 Executive Committee approves BFPs and sends to MoFPED Apr MoFPED confirms final budget figures July Budget funds released by MoFPED 39 Budget Mechanisms For Sanitation Financing - Final Report 5 Estimates of funding gaps and potential Estimates of future resource needs for sanitation will depend on various factors such as: · Roles and responsibilities of the various institutions · Objectives and target levels of performance in the sub-sector as compared to current levels of performance · Scope for cost savings / better value for money in the sanitation sub-sector · The extent to which hygiene promotion work needs to be increased This section assesses the future level of resources that is likely to be available for sanitation under current spending plans. It then sets out sanitation cost estimates and investment needs based on previous studies, a comparison of this with the current funding trends, a brief review of `best practice models', a suggested framework for more accurately assessing the `funding gap', a theoretical review of who might pay for elements of the `funding gap', and an assessment of what additional funding sources might be available. 5.1 Future resource availability under current plans In section 3, it was estimated that around UShs 11 to 17 billion per annum over the five years to 2002/03 was spent on sanitation-related activities from `on-budget' sources. It is interesting to compare this to the total amount of funds that are potentially available for the next few years. This is done in Table 5.1. Note that the table only shows GoU `on-budget' sources and that the funding sources listed are not earmarked for sanitation (in fact they cover a multitude of overall activities as well). In 2002/03, the rough sanitation expenditure estimate of UShs 14 billion calculated in Table 3.3 represented around 6% of the funds that were available for sanitation (and other) expenditures of UShs 231 billion shown in Table 5.1. (next page) It is encouraging to note that according to the Draft Estimates of Revenue and Expenditure, the overall GoU resource `pot' that could be used for sanitation activities is planned to increase by almost 40% over the next three years so that there is more and more money potentially available. The challenges are to ensure that sanitation becomes an increasing priority, that money is actually allocated to more sanitation activities, and that funds are used effectively. 5.2 Comparison of fund availability with spending by institution An interesting piece of analysis is to compare potential funding availability with estimated amounts actually spent on sanitation by institutions and programmes. This is done for 2002/03 in Table 5.2. 40 Budget Mechanisms For Sanitation Financing - Final Report Table 5.1: Indicative sources of future on-budget funds for sanitation related activities Funding Source Budget Projections (Ushs Billion) (released for 2002/03) 2002/03 2003/04 2004/05 2005/06 District Water Supply Maintenance 1.25 1.45 1.58 1.70 Conditional Grant District Water Supply and Sanitation 24.49 29.60 31.09 34.80 Development Grant Department for Water Development 0.11 0.15 0.17 0.19 Water Supply and Sanitation Ministerial 26.83 29.50 30.42 30.70 Development Budget Water and Sanitation Sub-Total 52.68 60.70 63.26 67.39 PHC Conditional Grant ­ Wage 40.12 44.67 44.74 44.77 PHC Conditional Grant ­ Non Wage 19.05 23.16 27.21 30.06 PHC Conditional Grant ­ Development 7.58 9.20 12.07 16.71 PHC Conditional Grant - NGO 16.12 17.72 18.40 21.57 PHC Conditional Grant Sub-Total 82.87 94.75 102.42 113.11 Local Government Development Programme 37.87 65.75 67.72 73.31 School Facilities Grant 53.75 59.78 61.02 62.20 Equalisation Grant 4.20 3.53 3.98 4.26 Total Indicative Funds Available (see 231.37 284.51 298.40 320.27 note) Recurrent element 70.69 80.05 84.89 89.64 Development element 160.68 204.46 213.51 230.63 Source of data: Draft Estimates of Revenue and Expenditure (Recurrent and Development) 2003/04, Republic of Uganda. Notes: The figures give an indication of planned levels of funding available for sanitation and the many other activities that are covered by each funding source. The figures do not include any off-budget funding sources made available by donors, NGOs, the private sector, micro-finance and communities. The breakdown between recurrent and development elements is an estimate. If sanitation funding continued to account for around 6% of the potential `pot' then around UShs 19 billion would be available form on- budget sources by 2005/06. If the proportion could be increased to 10%, then UShs 32 billion would be available by the same date. Table 5.2: Comparison of estimated funding availability and actual spending on sanitation activities for 2002/03 by institutions and programmes Institution Estimated total Estimated total Estimated funding available spending on spending as a for sanitation (Ushs sanitation proportion of Billion) (UShs Billion) funding Note 1 Note 2 availability Directorate for Water 52.68 2.41 4.6% Development Ministry of Health 82.87 2.34 2.8% Ministry of Education and 53.75 6.37 11.9% Sports Local Government 37.87 0.04 0.001% Development Programme Note 1: Figures as per Table 5.1. Note 2: Figures as per Table 3.3. The figures shown in Table 5.2 need to be treated with caution as they are based on many estimates. However, for 2002/03, it appears that around 12% of potential funds were spent on sanitation from education budgets, 5% from water and 3% from health. Very small amounts are used for sanitation from the LGDP, reflecting low prioritisation of sanitation at the local level. 5.3 Sanitation cost and investment need estimates From previous studies, it has been possible to get cost data of varying quality for schools, households and urban areas. However, there are gaps and the accuracy of some of the estimates is open to challenge. 41 Budget Mechanisms For Sanitation Financing - Final Report Schools sanitation WSP has commissioned previous work entitled `School Sanitation and Hygiene Promotion in Uganda: The Challenge'. This calculated the following unit costs for 2000 shown in Table 5.3. Table 5.3: Estimated unit costs for schools sanitation Cost estimates Indicative contributions Details based on past projects UShs (,000) US$ Donor / Community GoU / School One block of 5 stance latrines 2,085 1,600 85-91% 9-15% with hand-washing facilities Rainwater tanks (1,000 litres) 1,800 1,200 87% 13% Training for 3 teachers 150 100 100% 0% Production of materials for 3 45 10 100% 0% teachers Source: `School Sanitation and Hygiene Promotion in Uganda: The Challenge', WSP (2000). There appears to be some inconsistencies in the rates of exchange used. The MoES has calculated the amount needed to provide proper sanitation and hygiene in primary schools as shown in Table 5.4. Table 5.4: Sanitation and hygiene investment needs for primary schools Activity Five Year Budget Estimate UShs (million) US$ (million) Sanitation infrastructure 24,300 13.5 Hygiene promotion materials 108,500 60.3 Management and training 27,300 15.2 Sub total 160,100 89.0 Water supply 22,000 12.2 Total 182,100 101.2 Source: Strategy Paper for the Promotion of Sanitation and Hygiene in Primary Education, MoES (2001). Figures represent estimates for the five years from 2001 to 2005. These figures suggest that UShs 20.2 billion per annum is required to finance sanitation and hygiene needs for primary schools. Household sanitation The MoH has estimated the cost of a national household sanitation and hygiene promotion programme as shown in Table 5.5. The estimates are based on the targets of raising latrine coverage from 50% to 80% by 2015 and ensuring that 100% of householders with latrines adopt positive hygienic practices. US$ 20 million equates to UShs 36 billion over 15 years, or an average of UShs 2.4 billion per annum. It would be interesting to review this figure to see if it were possible to achieve desired objectives at a lower overall cost. 42 Budget Mechanisms For Sanitation Financing - Final Report Table 5.5: Estimated cost of a national sanitation and hygiene promotion programme Item Estimated costs (US$,000) Per annum Total for 15 years Development, production and distribution of 300 4,674 promotional materials Policy, legislation, guidelines and by-laws 50 779 Construction of demonstration grounds 15 264 Design and dissemination of technological options 50 779 Training 500 7,790 Databank and support for research 100 1,558 Local government training, information management, 150 2,340 monitoring and evaluation Construction of demonstration facilities 117 1,823 Total costs 1,282 20,007 Source: Strategy paper on Household Sanitation and Hygiene Promotion, EHD, Ministry of Health (2000). Assumes inflation at 3% per annum. Rural sanitation The Rural Water and Sanitation Implementation Strategy and Investment Plan sets out estimates of resource requirements to the year 2015. The sanitation estimates assume that: · Pit latrine construction costs for households are met by individual households; the programme will only investment in the software components of household sanitation · Capital investment costs will only cover sanitation facilities in Rural Growth Centres, primary schools and health units · For every growth centres, there will be four communal type VIP multiple stance latrines · For every primary school, there will be a five stance VIP latrine · Users will meet operational and maintenance costs for facilities · Additional resources are allocated to hygiene education and promotion in both rural households and schools The total estimated resource needs are summarised in Table 5.6. Table 5.6: Total estimated resource needs for rural sanitation from 2003 to 2015 Description US$ million Capital Programme Total Investment Investment Investment District expenditure 16.3 11.4 27.7 National expenditure 0 20.1 20.1 Total programme expenditure 16.3 31.5 47.8 Estimate per year for 12 years 1.4 2.6 4.0 Source of data: Rural Water and Sanitation Implementation Strategy and Investment Plan 43 Budget Mechanisms For Sanitation Financing - Final Report The US$ 20 million for national expenditure is the same figure as that broken down in more detail above in Table 5.4. The total investment of US$ 4 million per year approximates to UShs 7.2 billion per year. Again, it would be useful review this figure, to see if cheaper options were possible. Urban sanitation Relative cost estimates of providing safe excreta disposal services in urban areas are provided in the Sanitation Strategy and Master Plan for Kampala City. These are set out below in Table 5.7. Table 5.7: Estimated relative costs of excreta disposal in urban areas Excreta system Relative costs per person (note 1) Construction O&M Simple pit latrine (unlined) 1 1 Pour-flush 1.4 <1 Twin-pit pour flush 1.5 <1 VIP latrine (lined) 1.3 <1 Twin-pit VIP latrine (lined) 1.4 <1 Latrine with vault 1.8 1.5 Eco-san (dehydrating type) 1.3 <1 Cess pit * 5-25 4-5 On-site septic tank * 5-25 2-3 Conventional sewerage * 20-70 2-3 Simplified sewerage * 10-60 10 Condominial sewerage * 10-50 10 Sewered interceptor tank * 5-70 10 * These options require a reliable water supply. Note 1: These are ratios not actual costs. The Urban Water and Sanitation Strategy and Investment Plan document estimates that the following resources are required for the next 10 years: · Capital expenditure of US$ 7.7m for rehabilitation and US$ 101m for expansion so that water borne sewerage connections can be increased from 13,800 to 36,000 · Additional expenditure of US$ 200m for an additional 30,000 connections in Kampala (high investment scenario) · Capital expenditure of about US$ 5m for on-site sanitation in public areas These figures equate to about US$ 11.4 milion / UShs 20.5 billion (low scenario) and US$ 31.4 million / UShs 56.5 billion (high scenario) of investment per year. Once again, an independent review of these estimates is recommended. 5.4 Comparison of investment needs with current trends Sections 3.5 and 5.1 of this report provided an indicative analysis of current sanitation expenditure trends and an overview of likely resource availability. It is useful to compare this with what the sanitation sub-sector estimates of investment needs. This is done in Table 5.8. 44 Budget Mechanisms For Sanitation Financing - Final Report This data should be treated with extreme caution, but suggests that investment needs greatly exceed current resource flows, and that there is a `funding gap' for sanitation. However, it would be useful to independently review investment need estimates to see if the figures could be reduced through the use of more cost effective programmes. Table 5.8: Comparison of sanitation expenditure trends with stated investment needs Category of investment Annual Estimates (UShs billion) Expenditure Investment Needs Trend Schools sanitation 4 to 11 20 * Rural sanitation 2 to 5 ** 7 Urban sanitation 3 to 4 20 *** Total 11 to 17 47 Note: Expenditure trends analysed in more detail in sections 3.5 and 5.1 of this report; investment needs analysed in more detail in section 5.2. Very rough estimates. * primary schools only ** includes rural and small towns *** quoted low case scenario As the expenditure trend estimates relate to on-budget finance only, it would also be useful to identify the scope for, and to encourage the provision of, more off-budget financing by the private sector, NGOs and communities to help plug the apparent `funding gap'. The apparent higher investment needs of urban areas needs to be considered very carefully from an equity viewpoint as almost 90% of Ugandans live in rural areas. Section 5.1 estimated that in 2002/03, around 6% of the total resources that were potentially available for sanitation were allocated to sanitation activities (UShs 14 billion out of 231 billion). Note that under existing budget mechanisms, there are many other competing demands for resources. Stated annual investment needs of UShs 47 billion would represent 20% of current resource availability for 2002/03 ­ a significant increase. However, as overall resources are planned to increase over the next three years to UShs 320 billion, this figure of UShs 47 billon would represent around 15% of resource availability by 2005/06. The difficulty is that the money must also support a range of water, health, education and other activities and the chances of plugging the entire `funding gap' (using the measures stated above) appear slim. 5.5 The cost of `best practice' test models It might be possible to reduce overall investment need estimates if models of cost-effective good practice can be developed and implemented across Uganda, especially with relation to non-piped household sanitation and effective hygiene education and promotion campaigns. A workshop in Jinja (February 2004) organised by EHD and targeting district extension and TSU staff identified various examples of good practice, including: · Home and environment campaigns · `Win a bull' type campaigns · Water user committee training 45 Budget Mechanisms For Sanitation Financing - Final Report · Community health clubs · School competitions · Training of private contractors · Teacher training / curriculum development More work is needed to develop and then to cost good practices so that, after dissemination, not only are the practices successful but they also make good use of resources. 5.6 The cost of an alternative `strategic approach' Discussions were held towards the end of this assignment about the development of an alternative strategic approach for the prioritisation of sanitation, allocation of responsibilities and costing of activities. Based on emerging best practice internationally, this is composed of three elements as shown in Figure 4. Figure 4: A three-dimensional strategic approach to sanitation Access to sanitation Sanitation promotion ­ facilities ­ `Sanitation `Sanitation is foremost about as a business' behaviour change' Supply Accelerated Demand sanitation and hygiene improvement at scale Facilitation Enabling environment More details about example components of each of these three areas are presented in Annex 3, part B. The overall strategic approach is discussed further in section 6. 5.7 Paying for the potential `funding gap' This sub-section provides a bit of theory which is gaining increasing acceptance around the world. The incidence of benefits approach provides a framework for who might pay for sanitation activities, matching payments to benefits received. An illustration of this is shown below in Table 5.10. The basis concept shown in Table 5.10 is that those who benefit from sanitation are the ones who should pay for it. If the benefit is realised only at the household level, then it is the householder who should pay. If the benefits are obtained by the public at large, then society should pay. It would be worth exploring the principles of this approach more as applied to Uganda. 46 Budget Mechanisms For Sanitation Financing - Final Report The next sub-section looks at the scope for obtaining additional off-budget finance for sanitation in Uganda. This could be a way of plugging part of the `funding gap'. Where most appropriate, principles shown in Table 5.10 have been applied. Table 5.10: Nature of benefits and potential sources of funding for sanitation activities Nature and Potential resources from incidence of Household / Market based National / Local benefits community resources Government / resources (private, market NGO / donor borrowing) resources Sanitation - Largely public - Not - Private firms - National / Local promotion benefits due to considered for advertising Govt budget improved returns applicable (e.g. soap allocations / donor on WSS manufacturers / / NGO funds for expenditure distributors community hygiene - Help to lever promotion, household / sanitation community and campaigns, market based technology research resources - National / donor funds for supportable development of `bankable projects' Household / - Mainly private - Household / - Borrowing - Targeted subsidies institutional / benefits for community from banks and from National / community households / capital finance Local Govt or sanitation communities for contributions companies NGOs improved health, - User charges - Private - Partial / full privacy, for public / financing for grants for convenience community community / institutional - Public benefits toilets public toilets sanitation from from `no open National / Local defecation' Govt Wastewater and - Public benefits at - Sanitation - Private - Partial grants solid waste city / river basin surcharge on financing from National / management level water bills through build- Local Govt for - Relevance of the - User charges operate-transfer, sewerage systems `polluter pays' for solid waste lease, and solid waste principle primary concessions for facilities - large investments collection treatment and - Local Govt / make `pay as you - User charges disposal utility allocations go' difficult for sanitation - Market from general services borrowing revenues (e.g. - Polluter through debt, property tax) fro charges (e.g. for issuance of recurrent revenues disposal in municipal bonds rivers) Source: `The Challenge of Financing Sanitation', WSP Africa, 2004 (First Draft). 47 Budget Mechanisms For Sanitation Financing - Final Report 5.8 The scope for increasing finance form non public sources There may be scope for levering additional sources of finance for the sector from sources other than the GoU, such as through local taxes, micro-credit institutions, the private sector, NGOs, communities and donors (in addition to current levels of support). In the time available for this study, it has only been possible to provide indications of the potential for levering these types of funds. Local tax revenues Under fiscal decentralisation, local governments are encouraged and indeed expected to raise local tax revenues. Two options for raising local funds for sanitation activities could include: · A sanitation levy imposed on water sales · A development tax charged on business, a part of which could be earmarked for sanitation Both these options are only likely to be realistic in urban areas. A sanitation levy has been tried in some other places such as Burkina Faso and would be an interesting idea to test for raising revenue in Ugandan towns. Micro-credit institutions There have been examples in other countries, e.g. in India and Vietnam, of increasing the demand for sanitation through the expansion of micro-credit. However, there are few, if any, examples of micro credit being used in Uganda to finance sanitation activities. For example, the managers of the Eco-San programme were not aware of any scope for financing the construction of these latrines through the use of micro-credit. Also, staff of the Uganda Women's Finance Trust, one of the largest micro-credit bodies in the country were not aware of any sanitation projects funded in this way. One approach that might be worth trying would be to link commercial loan repayments to community sanitation initiatives in the following way: · Various members of a community obtain micro-finance loans to support commercial enterprises · Borrowers repay the loan in instalments · Each time an instalment is paid, there is also a separate payment into a community sanitation fund Stakeholders agree that this would be an interesting idea to explore, but no one that we spoke to knew of any examples of this happening before in Uganda. The private sector 48 Budget Mechanisms For Sanitation Financing - Final Report In some countries, there have been successes in mobilising the resources of private companies to fund sanitation programmes. There have already been examples of the private sector supporting sanitation activities in Uganda. For example: · Private sector companies are manufacturing eco-san latrines · Small scale masons have been trained to produce sanplats for household latrines · An agreement was recently made with a company called Picfare to put sanitation messages on the backs of school exercise books · Some municipalities have allowed the private sector to take on the operation and maintenance of public latrines and to be able to charge the public for this service There is the potential to expand the financing of public latrines even further through the use of build-own-operate (BOO) type arrangements. An assessment should be made of the scope for the private sector to develop all public latrines in rural growth centres and towns. Another option well worth following up is to approach soap manufacturers to see if they would be willing to support a national hygiene promotion campaign. An increase in hand-washing could make a very significant contribution to improved hygiene in Uganda. Soap manufacturers would have a vested interest to maximise the growth of soap sales. NGOs Over the years, NGOs have been active in a broad range of sanitation activities in Uganda. The NGOs provide additional potential resources, and also a lot of experience and expertise. During visits to districts, we heard about examples of how water offices employ NGOs to perform hygiene promotion work around new water points. The Uganda Water and Sanitation Network (UWASNET) is taking this type of approach a step further and has developed draft guidelines and procedures for the contracting out of hygiene promotion work to NGOs. The contracting out of this work should be closely monitored and, if successful, steps taken to encourage its replication more widely. Communities Elsewhere in the world, there have been successes in mobilising a larger proportion of community resources to finance sanitation initiatives. For example, in parts of Vietnam a Women's Union manages credit for household sanitation improvement through savings and credit groups. This project has been successful in that nearly all the improved sanitation facilities have been constructed within three months of the disbursement of funds. However, at present, there is little evidence of a large untapped demand for sanitation services in Uganda. The challenge might well be to create this demand and then to develop financing mechanisms to support it. 49 Budget Mechanisms For Sanitation Financing - Final Report Donors Over the years, donors have supported many water and sanitation projects in Uganda. As shown in section 3, there is still some on-going support to projects, but increasing amounts of donor support is now being channelled as general budget support. We investigated whether there are any major untapped sources of donor funds that might be available for sanitation related activities. Examples might include `social investment funds' or `challenge funds'. However, discussions revealed that there are no major funding sources of this type. Overall assessment This sub-section has revealed that there have been limited successes in Uganda in levering significant off-budget resources for sanitation financing. Further attempts could be made to do this through, for example: · Piloting the use of a sanitation levy on water sales to fund a broad range of sanitation activities in urban areas · Encouraging communities to use micro-credit as a way of raising money for both commercial activities and community sanitation projects · Allocating build-own-operate contracts for the construction, operation and maintenance of al public latrines · Approaching soap manufacturers to part-fund a national sanitation awareness campaign · Replicating models for contracting NGOs to provide hygiene promotion services 6 Strategic directions for budget mechanisms This section draws together a lot of the analysis contained in previous sections and some general developments in Uganda to present: · Recent successes and opportunities to build on · The scope for a three-dimensional strategic approach for sanitation · The need to assess sanitation funding requirements based on a integrated sanitation strategic plan · The establishment of budget mechanisms in a more focused way · A suggested budget management framework for the national and local government levels · A review of resource allocation principles · The need to influence overall strategic decision making 50 Budget Mechanisms For Sanitation Financing - Final Report · The importance of reviewing sanitation sub-sector guidelines · Suggestions for improved monitoring and evaluation · An assessment of institutional and systems development needs · A summary recommended action plan for strengthening budget mechanisms for sanitation in Uganda 6.1 Recent successes and opportunities to build on Before discussing the steps for strengthening budget mechanisms, it is useful to summarise general opportunities for improving the profile of sanitation in Uganda. Recent successes have been: · Increasing recognition of the importance of sanitation by the GoU and organisations responsible for the delivery of sanitation functions · Formation of the SSWG · Development of `district models' for a more integrated sanitation approach (under the EHD capacity building programme) · Increased use of MoH Area teams and DWD TSUs to raise the profile of sanitation · Development of contracts with NGOs to provide hygiene promotion functions · Preparation of the environmental health inputs for the Health Sector Strategic Plan II · MoH is developing a Cluster Framework for the delivery of an Integrated Basic Health Care Package. MoH is proposing a "Cross Cutting Cluster" involving Health Promotion, Prevention and Community Health Initiatives. Thus a new and more holistic approach where hygiene promotion and sanitation can be integrated very well · Revision of WSS sector investment plans with a separate section for sanitation 6.2 A three-dimensional strategic approach for sanitation There is opportunity to raise the profile of sanitation in Uganda even further. After consultation with members of the SSWG and the HPAC, a dimensional strategic approach is now suggested. This can be overseen by the SSWG, with the EHD as the main party to `trigger' its implementation. The first step will be the development of an integrated and sector wide sanitation strategy that sets out mechanisms for creating an enabling environment, promoting the demand for sanitation and strengthening the supply of sanitation. Creating an enabling environment for sanitation 51 Budget Mechanisms For Sanitation Financing - Final Report This can include: · National coordination and continued EHD strengthening · Policy, legislation, inspection and regulation · Performance linked resource allocations · Other financial incentives and national recognition (awards) · Information, monitoring and benchmarking to allow comparative monitoring · League tables to give incentives / `name and shame' · Water quality monitoring · Better guidance to districts about the implementation of effective sanitation programmes · Dissemination of best practice models · Promotion of research in environmental health Promoting the demand for sanitation This can include: · Implementation of the Kampala Declaration for Sanitation · Demand creation through social marketing and participatory approaches through government extension system · School sanitation and health education · Advocacy for sanitation at different levels · Focus on behavior change (e.g. hand washing campaigns as cost effective interventions) · Levering more support from NGOs and the private sector for promotion activities Strengthening the supply of good sanitation This can include: · Training and technical support for small-scale service providers (local masons, producers, etc.) · Supporting measures for credit access for households and service providers · Regulation of service providers · Development and product research for options and tested alternatives 52 Budget Mechanisms For Sanitation Financing - Final Report · Demonstration toilets with alternative technologies · Sewerage systems in cities and large towns · Leveraging private sector and community resources for the supply of sanitation Determining sanitation funding requirements based on an integrated strategic plan Future resource needs can then be determined for each of these three dimensions for accelerating sanitation and hygiene improvement at scale. This might best be done through the development of an integrated and sector-wide strategic plan for sanitation, which sets out: · Objectives and main components · Targets for each key component · Detailed activities, costs and expenditure requirements · Institutional responsibilities (national, local and across different Ministries and Departments) · Resourcing requirements at national and local levels The information and recommendations in sections 4 and 5 of this report would be useful in the development of this strategic plan and the assessment of funding requirements. Another important issue to address will be to clearly distinguish between national and local funding requirements: · National level activities will be performed though departments in different Ministries and might cover activities such as: media advocacy (EHD), TSU support roles (DWD), Area Support Team activities (MoH) etc. · Local level activities will be run through local governments at municipality, district and sub-county levels and might cover activities such as: household hygiene promotion by community health workers, toilets in schools etc. Establishing focused sanitation budget mechanisms Once funding requirements are clearly documented, it will be possible to clarify budget mechanisms. For national level activities, it will be essential to understand very clearly the way in which the budgets of each relevant ministry (and department) are organised and to identify existing or new budget lines for different needed activities. For local activities the guidelines and use of different conditional grants will need to be reviewed to assess the potential scope of using these funds. Possibilities within the new FDS budget guidelines will also need to be explored. In this contextit is also necessary to identify ways of providing incentives to local governments to undertake appropriate sanitation related activities. It would be also useful to explore other non public sources such as household and community resources through own construction or connection / user charges, private sector funding through 53 Budget Mechanisms For Sanitation Financing - Final Report public-private partnerships (e.g. for hand-washing campaigns, through lease for public toilets, etc.) or through micro-finance for household toilets. Mobilisation of such resources would, however, in the initial years require resources for support measures such as: technical and capacity building support to communities and micro-finance institutions / lease institutions, partial grants through output-based aid (say minimum subsidy concessions for public toilets), and partial guarantees for micro-finance institutions to lend for toilets. 6.3 Developing an integrated budget management framework An integrated budget management framework will support the monitoring of resource allocations to ensure that money is actually made available through the various budget mechanisms to fund the activities set out in the sanitation strategic plan. An integrated budget management framework will help to ensure that: · All sources of funding (GoU and all other sources) can be inter-woven into one overall sector budget with the maximum of ease · The integrated budget is linked to the sector outputs noted in both the Health Sector and WSS SWAps · There are clearly defined roles and responsibilities for who managed each part of the integrated budget · There are well developed monitoring and reporting mechanisms · Budget negotiations with the MoFPED are facilitated A national budget management framework Figure 5 sets out an example national sanitation budget management framework. All key activities are listed down the left hand side and all sources of funds are listed across the top. The framework also contains an assessment of planned outputs at the far right hand side. The advantages of using an approach like this would include: · It provides a framework for the integration of all institutional budgets · It helps to illustrate where the funding gaps are · It provides a better method for arguing for resources from MoFPED · It shows how resource use can be linked to outputs and a set of outputs leading to desired sanitation and health outcomes · It provides a method for monitoring both the use and the impact of funds Figure 5: Example national sanitation budget management framework 54 Budget Mechanisms For Sanitation Financing - Final Report Activities On budget funds Off budget funds Planned outputs MoH MoWLE MoES Other on- Off- Total Narrative No. Unit budget budget cost Creating enabling environment A B Promoting demand for sanitation C D Strengthening supply of sanitation E F Total budget Note: This framework can be completed as part of the development of an overall integrated sanitation strategy document. The letters A to F refer to example activities that are needed under each of the three `prongs' of the strategy. More details of possible activities are shown in Annex 3. part B. Funding requirements can be then inserted into the matrix together with the outputs that are planned. District / municipality budget management frameworks The budgeting framework could be cascaded down to the district / municipality level and below. It would be useful if each district and municipality could produce a template like the one shown in Figure 3. Figure 6: Example district / municipality water and sanitation budget management framework Source of funding Planned outputs Activities MoH DWD N W - M o- M o G Mo- NGO Don - Priv. Comm- Total Narrative No. Unit SC ES -LSD LG or sector unity cost Rural water supply Construction of new water points Maintenance of water points Water for production New dams etc. Maintenance of dams etc. Sanitation Construction of 35 5 40 Number of 400 0.10 latrines - new latrine schools stances Hygiene awareness 60 20 10 10 100 Households 10000 0.01 with good hygiene Total budget Note: This is for illustration purposes only ­ it is simplified and figures are fictitious. 55 Budget Mechanisms For Sanitation Financing - Final Report However, to minimise the amount of work required at the district level, and to assess performance against the expenditure of the sector as a whole, it might be better to combine sanitation into either a water or health sector budget management framework like that shown in Figure 6 for water. This sort of management framework would provide an integrated summary of sector financing and outputs, and provide a concise way of monitoring expenditure against results. However, this would require discussion with the MoLG, careful piloting and roll-out at the district / municipality level. 6.4 Resource allocation principles This sub-section sets out options for how resources could be allocated across different sanitation budget categories and across Uganda to ensure that money is used as efficiently, effectively and equitable as possible. Principles are needed for the allocation of resources in the following ways: · Allocation between the different types of sanitation expenditure · Allocation between rural, small town and urban sanitation · Allocation between districts and municipalities Some of these resource allocation decisions will be made at the national level, and some will be made at the local level. The information contained in this report should be linked into the broader resource allocation review currently being conducted for water and sanitation. A case should be made for a greater and a better allocation of resources for sanitation related activities. Allocation by sanitation expenditure type The indicative analysis in section 3 suggests that expenditure on `hardware', primarily the construction of latrines, has accounted for 75-80% of sanitation expenditure over the past 5 years in Uganda. Experience around the world provides evidence that well-targeted investment in hygiene promotion can have a significantly greater impact on sustaining sanitation improvement than public investment in latrine and toilets. Based on the sector-wide strategy, the Sanitation sub-sector working group (SSWG) would be able to agree on broad percentage breakdowns between software activities (such as hygiene promotion) and hardware expenditure on infrastructure. Over time, the proportion of resources devoted to hardware should fall, compensated by more off- budget finance provided by the private sector, NGOs and communities for capital expenditure. This may imply a greater proportion on-budget sanitation funding via the Ministry of Health. Allocation by rural, small town and urban areas The data presented in section 3 estimates that in 1998/99 approximately equal amounts of sanitation money was spent on rural / small towns combined and on large towns. By 2002/03, approximately twice as much money was targeted at the former group. The allocation by rural, small town and urban areas should reflect various factors including: 56 Budget Mechanisms For Sanitation Financing - Final Report · Population levels · Relative costs of supplying sanitation · Existing provision of adequate sanitation · Poverty levels The agreement of the allocation between rural, small towns and urban areas is subjective and is to a large extent a political decision. However, the fact that almost 90% of Ugandans live in rural areas, and that the majority of poor people live in rural areas, provides some argument for increasing resource allocation in those places. It should also be remembered that most urban sector investment benefits those people with piped sewerage who often account for 25% or less of the urban population. Having said this, it is only certain types of sanitation resourcing that can be influenced in this way, such as the overall amounts allocated to any urban and rural sanitation projects. Under the Fiscal Decentralisation Strategy, an increasing amount of resource allocation decisions are being made at the local government level and so lobbying to boost the profile of sanitation at this level will be a main way in which resources can be increased (in both urban and rural areas). Allocation by district / municipality It is time available to conduct this study, it has not been possible to review sanitation resource allocation across the districts and municipalities of Uganda. The allocation depends on: · The amount of money allocated to each local government administration based on the formulae behind the PHCCG and the WSCG · The extent of any NGO or donor investment in sanitation across the country · The priority given to sanitation by each district or municipality In reviewing the allocation of resources, various other factors should also be considered. In line with national and sector policy objectives, more money should go to those parts of the country with: · Higher levels of poverty (to meet poverty reduction strategy goals) · Lower levels of current basic sanitation (to meet `some for all rather than all for some' policy goals) · Higher chances of making a significant improvement in performance (in line with public sector efficiency goals) The SSWG should review how resources are currently allocated between districts as part of the WSCG and the PHCCG and see how this coincides with poverty levels and with current sanitation profiles. Assuming that it is those parts of the country with lowest sanitation indicators that have the biggest chances of improving performance, there should be lobbying to assign more resources 57 Budget Mechanisms For Sanitation Financing - Final Report to those places. This will need to be combined with careful monitoring (perhaps using a management framework like that presented in section 6.2) so that efficiency and effectiveness in the use of resources can be checked. 6.5 Influencing strategic decision making Sanitation is a cross-cutting issue within Uganda, aspect of which feature as key responsibilities of the MoH, MoWLE, MoES, other line Ministries and local government. There is also private sector, NGO and CBO involvement in the delivery of sanitation related functions. The development of an integrated sanitation strategy will help to coordinate all these players. Wherever possible there is a need to influence strategic decision making of institutions so that sanitation is given as high a profile as possible wherever it features in individual strategic plans. The SSWG should always be on the look out for opportunities to do this ­ a forthcoming opportunity is to influence the development of the WSS strategic Investment plans. There is also scope to continue to lobby for a higher profile for sanitation within the MoH through participation on the Health Policy Advisory Committee (HPAC). 6.6 Review of sanitation sub-sector guidelines This report has already referred to various guidelines that have relevance to sanitation, including those relating to the WSSCG, PHCG, LGDP and the FDS. There needs to be an ongoing review of these and other guidelines (such as those concerning the operation of TSUs) so that the importance of sanitation is reflected as clearly as possible. The SSWG should ensure that this does indeed take place. 6.7 Improved monitoring and evaluation Monitoring and evaluation of sanitation inputs, outputs and outcomes will be a key task to ensure that the sub-sector remains on track to achieve its desired objectives. An overall mechanism for doing this should be agreed, which might be along the lines of: · SSWG to evaluate overall sector outcomes and `golden' or key performance indicators · Each Ministry to monitor specific outputs that are within its own mandate · Local government to monitor inputs and the achievement of all outputs in the district or municipality This mechanism should tie in with overall performance measurement framework being implemented for the WSS as a whole. More specifically, it is also necessary to improve the quality of financial data made available for monitoring sanitation expenditure. This has already been discussed in section 3.9. 58 Budget Mechanisms For Sanitation Financing - Final Report 6.8 Institutional and system development needs This sub-section sets out an overview of system and staff training needs so that there can be effective budgetary prioritisation for sanitation and assessment of performance. It builds on various points that have been made earlier in this report. Development needs are shown below in Table 6.2. Table 6.2: Summary of development needs for more effective sanitation budgeting mechanisms Issue Development Needs What Where a. Improved information: Need for improving the Advising on, and reviewing of, the SSWG accuracy of sanitation strengthening of the data collection systems by expenditure and outcomes data DWD, NGOs, household surveys and local government Need for better estimate of Agreement and completion of a national SSWG overall national sanitation sanitation budget management framework resource availability b. Development of a sector-wide sanitation strategy Need to more clearly specify Development of the three-dimensional model SSWG objectives and components for for sanitation: supply, demand and facilitation a joined-up sanitation strategy Need for more realistic Integration of schools, urban and rural SSWG preparation and better sanitation investment needs into a single plan coordination of investment with realistic specification of what is achievable plans given likely resources Need for more effective Review of resource allocation criteria between SSWG allocation of resources urban and rural areas, different types of nationally sanitation expenditure and different parts of Uganda Need to lever more non-public Development of capacity to identify and EHD finance lobby for off-budget resources Need to review subsidisation Input into the proposed study of water and SSWG policy sanitation sector subsidy policy c. Support to local government sanitation plans Need to ensure that sanitation Costing of best practice models and selection EHD improvements can be obtained of those giving good value for money as economically as possible Need for better prioritisation, Preparation and communication of improved EHD coordination and use of district sanitation planning, budgeting and resources for sanitation at local management guidelines government levels Need to strengthen regional Support to Technical Support Units DWD advisory support for sanitation Need for greater transparency Development of sanitation (and water) MoWLE / of sanitation performance performance `league tables' for each district / MoH municipality Need to give incentives for Review of water and sanitation, and primary SSWG greater expenditure on health care conditional grant guidelines sanitation Need to mirror the sector wide Development of a system for coordinating all District / approach at the district / water and sanitation sector wide plans and municipality municipality level budgets at the local government level water offices 59 Budget Mechanisms For Sanitation Financing - Final Report 6.9 Action plan This sub-section sets out an action plan which indicates how an improved budgetary mechanism and strategy for sanitation can be operationalised. This is shown in Table 6.3. Table 6.3: Suggested action plan (a) SSWG ­ overall coordination and leadership When (i) Budgeting framework · Lobby for separate budget lines for sanitation in local authority budgets Immediate under health, water and other sections (under revised FDS) priority · Lobby for inclusion of sanitation related performance indicators (under Immediate revised FDS) priority · Review, approve and press for strengthening of sanitation activities in Immediate PHCCG and WSSCG guidelines priority · Complete national sanitation budget management framework for Jan ­ Mar 05 2005/06 (ii) Strategy framework · Coordinate the development of an integrated sanitation strategy Jun ­ Aug 04 document which includes overall objectives, targets, activities (at national and local levels with their costs) and resource estimates · Coordinate the development of an integrated M&E system that includes Sep ­ Mar 05 the use of `golden' performance indicators and district level performance league tables (iii) Resource allocation · Identify and influence sanitation resource allocation trade-offs that need Oct ­ Dec 04 to be addressed (rural / urban, inter-district etc.) (iv) Resource generation · Clearly identify budget lines at national and local levels in relation to the Ongoing sector-wide strategy · Ensure that there is a push for morenon-public funding to support national hand-washing campaigns, construction of public latrines etc. (b) EHD ­ broad focus on the `enabling environment' & `demand When promotion' (i) Strategy framework · Revise first draft of HSSP II linking resources needs to objectives, outputs Immediate and activities in each of the three strategic areas (enabling environment, priority promotion of demand, strengthening of supply) · `Trigger' and manage the development of the integrated sector-wide sanitation strategy through the SSWG Jun ­ Aug 04 · Identify the scope and lobby for the inclusion of sanitation components in other health programmes such as malaria and guinea worm eradication Ongoing within MoH · Increase the provision of Secretariat support to the SSWG to follow up on key issues and recommendations Ongoing (ii) Increased prioritisation for sanitation at local levels · Draft revised guidelines to strengthen sanitation focus within the PHCCG Immediate · Train DHIs in improved planning and budgeting for sanitation priority · Promote and disseminate cost-effective best operational practice models Jul ­ Dec 04 in districts · Support local government to link best operational practice models Jul ­ Dec 04 (BOPs) to their plans and budgets to ensure long-term sustainability · Oversee introduction of incentive mechanisms for better village hygiene Sep 04 ­ Mar 05 Ongoing 60 Budget Mechanisms For Sanitation Financing - Final Report Table 6.3 (continued): Suggested action plan (b) EHD ­ broad focus on the `enabling environment' & `demand When promotion' (iii) Resource generation · Continue lobbying for more resources to support national level work Ongoing (e.g. through HPAC) · Strive to identify additional non-public funding to support national Ongoing hygiene awareness campaigns (soap manufacturers?) etc. (c) DWD ­ broad focus on `the supply side' When (i) Strategy framework · Contribute to the development of the integrated sector-wide sanitation Jun ­ Aug 04 strategy by the SSWG · Review SIP15 draft to ensure that sufficient resources are allocated to Jun ­ Aug 04 sanitation and that they are allocated in the best way (with reference to the integrated strategy) (b) Increased prioritisation for sanitation at local levels · Draft revised guidelines to strengthen sanitation focus within the WSSCG Immediate · Monitor the success of NGO involvement in community mobilisation priority and hygiene promotion and consider how to expand this role to more Jun ­ Dec 04 households · Guide TSUs in the provision of better sanitation support Ongoing (c) Resource generation · Strive to identify more non-public funding for public toilets, e.g. through Ongoing leasing and `build-own-operate' contracts (d) MoES When (i) Strategy framework · Appoint a nominated person / continue to contribute to SSWG meetings Immediate · Contribute to the development of the integrated sector-wide sanitation strategy Jun ­ Aug 04 (ii) Own strategy · Review own strategies for improving sanitation and hygiene awareness through schools Jun ­ Dec 04 · Review the possibility of supporting improved sanitation facilities in existing schools Jun ­ Dec 04 (e) NGOs When (i) Strategy framework · Contribute to the development of the integrated sector-wide sanitation Jun ­ Aug 04 strategy · Review own strategies for improving sanitation and hygiene awareness Jun ­ Dec 04 (f) Local government When (i) Performance improvement · Raise the profile of sanitation through better publicity of benefits, more Ongoing integrated planning and budgeting · Try out models of best practice and share successes / learning Ongoing 61 Budget Mechanisms For Sanitation Financing - Final Report Annex 1 ­ consultations Stakeholder meetings The key stakeholders who were met in conjunction with the completion of this report were: · Paul Luyima, Justin Otai and Didas Namanya of the EHD(MoH), Rob Yates at MoH · Richard Cong, John Pinfold, Mr. Parata and others at DWD · Margaret Kobusinge and Diego at MoFPED, Kate Tibagwe of MoES, Andrew Kizza of MoLG · Kiwe Sebunya of UNICEF · Sam Mutono and Justina at Danida · Simon Kenny, Jenny Yates and Ros Cooper at DFID · David Isingoma of the NWSC · Phil Broughton of Speed, Caroline Batanda and Harriet Nabunnya at UWASNET · Mr. Kirumira, Dr. Mubiru, Anna Tufvesson and Francis Damulira at KCC · David Mukama, Kasozi Joseph, Mr Godfrey and others at Masaka District and Municipality · Sister Wandawa Jennifer, Dr. Silver Kalyebbi, Paul Soddo, Mr. Issa, Matte James and others at Mbale District and Municipality · Meera Mehta and Andreas Knapp, World Bank WSP Nairobi · Anthony Waterkeyn and Maimuna Nalubega, WSP Uganda Thanks are extended to all of the above for valuable insights and suggestions. Ministry of Health Policy Advisory Committee presentation Elements of the draft of this report were presented to the MoH Policy Advisory Committee on 2 June 2004. Many thanks are extended for the valuable comments that were received. Sanitation working group presentation Elements of the draft of this report were also presented to the following members of the Sanitation Sub-Sector Working Group on 4 June 2004. Name Organisation Contact telephone Paul Luyima Ministry of Health 077 431 190 Samuel Mutono Danish Embassy 077 843 383 Anders Karlsen Danish Embasy 041 256 687 Andreas Knapp WSP-AF, Nairobi +254 20 322 6323 Tushabe A. A. DWD 077 443 308 Paul Samakula NETWAS 077 820 528 Agnes Bitature UNICEF 234 591 D. M. Mukama TSU 7 077 435 634 F. Acuba DWD 075 625 837 Finn Forsberg Swedish Embassy 077 707 102 Anna Tufvesson KCC (TA) 077 528 251 Gunnar Settergren TA DWD 077 650 626 Patrick Okuni SE DWD 077 502 972 Meera Mehta WSP-AF, Nairobi +254 20 322 6304 Eng. Mugisha Shillingi DWD 077 406 913 Eng. John Twinomujuni DWD 077 229 446 Thanks are extended to all the above for valuable comments. 62 Budget Mechanisms For Sanitation Financing - Final Report Annex 2 ­ sanitation expenditure estimates This appendix sets out estimates of sanitation related expenditure over recent years in Uganda. The data needs to be treated with caution as it is based in estimates, some of which are very approximate. Estimated on-budget sanitation related expenditure for the period 1998/99 to 2002/03 UShs million A. Within DWD budget Note 98/99 99/00 00/01 01/02 02/03 Sanitation in primary schools Donor contributions 1 R/D 820 684 4,818 0 0 Latrines in schools 1 D 779 1,277 1,130 318 0 Operating expenses 1 R 143 235 175 160 0 Water tanks 1 D 342 591 488 8 0 2,084 2,787 6,611 486 0 Water & envi. sanitation programme Estimated 10% of budget to sanitation 1 R/D 13 4 0 0 0 Estimated 10% of budget to sanitation 1 R/D 2 2 0 0 0 15 6 0 0 0 RUWASA Estimated budget to sanitation 1 R/D 1,352 3 2 0 0 Estimated budget to sanitation 1 R/D 13 12 13 0 0 1,365 15 15 0 0 School & community water supply & san. prog. Latrine construction 1 D 0 0 2 0 0 0 0 2 0 0 District water & san. conditional dev. grant Contribution to latrine construction 1 D 0 0 6 3 0 Public latrine construction 2 D 0 0 400 398 267 Hygiene education around water points 3 R 0 0 620 768 980 School and household campaigns 4 R 0 0 687 628 857 0 0 1,713 1,797 2,104 Other funds Latrine construction 5 D 400 400 0 0 0 Hygiene education 5 R 500 500 0 0 0 School and household campaigns 5 R 500 500 0 0 0 1,400 1,400 0 0 0 Rural water supply sector operational plan Inst. support to households & schools 6 D 0 0 0 0 306 0 0 0 0 306 Total estimated expenditure under DWD 4,864 4,208 8,341 2,283 2,410 63 Budget Mechanisms For Sanitation Financing - Final Report UShs million B. Within Ministry of Health budget Note 98/99 99/00 00/01 01/02 02/03 Central EHD costs National sanitation initiative 7 R 77 77 300 253 381 Donors 7 R 34 19 212 25 5 111 96 512 278 386 UNICEF Support to EHD Development of communications strategy 8 R 15 Development of rapid assessment tools 8 R 7 Finalisation of environomental health policy 8 R 7 Launching of national sanitation guidelines 8 R 2 0 0 0 0 31 School of Hygiene Non wage costs 9 R 140 145 153 160 170 140 145 153 160 170 Primary health care Large towns 10 R 177 177 177 177 210 Small towns and rural areas 10 R 1,299 1,299 1,299 1,299 1,544 1,476 1,476 1,476 1,476 1,754 Total estimated expenditure under MoH 1,727 1,717 2,141 1,914 2,341 C. Within Ministry of Education budget Schools facilities grant - latrine construct. 11D 1,462 3,237 4,368 6,277 6,067 Schools sanitation coordination office 12 R 0 0 0 0 300 Total estimated expenditure under MoES 1,462 3,237 4,368 6,277 6,367 D. Within NWSC budget Sewerage operating expenses for large towns 13 R 806 689 790 724 790 Capital depreciation estimated for large towns 14D 1,462 1,462 1,462 1,462 1,462 Total estimated expenditure under NWSC 2,268 2,151 2,252 2,186 2,252 E. Local Government Development Prog. Large towns sanitation 15D 0 0 10 20 20 Small towns and rural sanitation 15D 0 0 10 20 20 Total estimated expenditure under LGDP 0 0 20 40 40 F. Local Govt. solid waste, vector control etc. Large towns 16 R/D 200 200 200 200 200 Small towns and rural 16 R/D 50 50 50 50 50 Total other Local Government expenditure 250 250 250 250 250 Total estimated expenditure (A to F) 10,571 11,563 17,372 12,950 13,660 Note: Please see list of notes at the end of this table. 64 Budget Mechanisms For Sanitation Financing - Final Report Notes - assumptions behind the budget data The data contained in the above table is based on best estimates, but these are very approximate and need to be treated with caution. 1. Estimates from analysis supplied by DWD 2. Analysis supplied by DWD (estimate for 2000/01) 3. Verbal estimates obtained from DWD based on 5% of all money targeted at water points 4. Verbal estimates obtained from DWD for campaigns, radio etc. 5. Very rough estimates to smooth out funding in line with overall opinions 6. 'Support to the Water and Sanitation Programme', a proposal to SIDA, June 2002 7. Funds actually received by the EHD according to the Deputy Financial Officer In 2001/02, UShs 600m was budgeted for as the GoU contribution, but only UShs 253m was received 8. UNICEF letter supplied by the EHD 9. Verbal estimates obtained from Principal of the College - figures exclude salaries 10. Based on an estimated 2% of PHCCG spent on sanitation for 2001/02 and 2002/03 and estimates of same figure for earlier years An estimated 12% of the total for large towns, 88% for small towns and rural areas 11. Estimates by Ministry of Education Planning Department based on 8.7% of total grant 12. Estimated figures supplied verbally by Education Planning Department 13. Estimates prepared for this study by NWSC 14. Adapted from estimates prepared for this study; based on 5% depreciation of land, buildings and plant, and 20% depreciation on vehicles and equipment, averaged for the first three years of the period 15. Very rough estimates based on discussions at the MoLG 16. Very rough estimates based on discussions with officials of KCC, Masaka and Mbale Municipal Councils R = Recurrent costs D = Development costs R/D = Estimated 50% recurrent and 50% development costs 65 Budget Mechanisms For Sanitation Financing - Final Report List of example recent off-budget sanitation projects Project Name of sponsor Area of operation Level of Investment Kampala Ecological SIDA Kampala City US$0.9m = UShs Sanitation Pilot Project 1.8b South Western Towns Austrian Government/ Kisoro, Kabale US$0.4m = UShs Water and Sanitation GOU Rukungiri, Ntungamo, 0.8b, say 10% for Project (SWTWS) Kanungu, Bushenyi districts sanitation Environmental USAID, World Wildlife Bushenyi ? Conservation Trust of Fund (WWF) Uganda (ECOTRUST) Production and Crestank (Private Sector) Industry located in Kampala ? promotion of Ecosan but promotes Ecosan pans countrywide Rural Water and DANIDA Jinja, Kamuli, Iganga, ? Sanitation Project Mukono (RUWASA) Tororo, Pallisa, Kapchorwa, Mbale, Busia, Bugiri (Kampala Urban French Development Kampala City Project budget is 5.0 Sanitation Project Agency (AFD) Mill. Euros = UShs (KUSP) 11.0b Sanitation Master Plan KfW Kampala City DM 2.0m = UShs for Kampala City 2.0b Design of Gaba III KfW Kampala City 1.2m Euros = UShs 2.6b, say 10% for sanitation Kampala Belgium Government Kampala City 5.0 Million Euros = Environmental Planning UShs 11.0b,m say and Management 10% for sanitation (KEPM) Sanitation Project Plan (International) Kampala City, Luwero and ? Uganda Tororo district School sanitation project Uganda Resource Mbarara (Ruti). Constructs ? Management Enviroloo toilets in schools Foundation (URMF) Sanitation Project Community Integrated Kampala (Makindye Division) ? Development Initiatives Fund VIPs (CIDI) Community Sanitation Save the Children (UK) Kampala (Kawempe Division) ? Project Great Britain Fund VIPs. Sanitation project LODOI Development Pallisa. ? Foundation Community Sanitation Canadian Physicians Aid Arua and Lira. ? project Relief Ecosan project Gisolola Twubake Kisoro District ? Association Wash Campaign UWASNET Water and Sanitation ? Collaboration Council (WSSCC) Geneva and GOU Source of data: Field interviews conducted by Reev Consult International, June 2003. 66 Annex 3 ­ sanitation activities, institutional mandates and funding sources A ­ Analysis by sanitation promotion, household / institutional sanitation, urban sanitation 1. Sanitation promotion activities Main institution Other institutions Current main source of Sources for potential responsible involved funding additional funding National advocacy campaigns EHD MoH Private sector District level campaigns EHD TSU, NGOs Local Govt Private sector Hygiene promotion around new water points DWD TSU, Local Govt, WSCG NGOs NGOs Community hygiene promotion EHD TSU, Local Govt, PHCCG NGOs NGOs Training of health workers MoES - MoES MoH Preparation of materials EHD NGOs MoH NGOs School based hygiene promotion MoES Local Govt MoES MoH, NGOs Training of teachers MoES MoES NGOs Training of community development workers MoGLSD NGOs, MoES MoGLSD NGOs Training of masons - NGOs, Local Govt NGOs Donors Development of toilet technology models EHD TSU MoH Private sector Inspection and licensing EHD DWD, Local Govt MoH - Preparation of sanitation work plans for local Local Govt TSU Local Govt funds - government Policy development, guidelines, regulation and monitoring EHD DWD, NGOs, Local Central and Local Govt Donors Govt, MoES funds Coordination of sanitation Sanitation - Central Govt funds - working group Lobbying EHD NGOs MoH Donors Applied research EHD NGOs MoH, NGOs Donors 2. Household, community and institutional toilet Main institution Other institutions Current main source of Sources for potential construction and maintenance activities responsible involved funding additional funding Rural household toilets Households EHD, NGOs, CBOs Households Micro credit, CBOs Urban household toilets Households NGOs, Local Govt Households Micro credit, CBOs 67 Public toilets in urban informal settlements Local Govt NGOs, CBOs Local Govt funds, Private sector, NGOs LGDP Public toilets in public places Local Govt NGOs, private sector Local Govt funds, Private sector, NGOs LGDP School toilets MoES Local Govt, NGOs SFG NGOs, private sector Toilets in health facilities MoH Local Govt MoH NGOs, private sector Toilets in other institutions Central/ Local - Relevant Central or Local NGOs, private sector Govt Govt department 3. Urban sewerage and solid waste management Main institution Other institutions Current main source of Sources for potential acivities responsible involved funding additional funding Residential collection of waste Local Govt Private sector Local Govt Private sector Public street collection of waste Local Govt Private sector Local Govt Private sector Transportation of garbage to disposal sites Local Govt Private sector Local Govt Private sector Treatment and disposal of garbage Local Govt - Local Govt Private sector Connections to the sewerage network Households NWSC Households Private sector Maintenance of the sewerage network NWSC Local Govt NWSC Private sector Seweragetreatment and disposal NWSC Local Govt NWSC Private sector Note: This table has been completed after discussions with a sample of stakeholders and review of documentation. It should be viewed as an indicative assessment of responsibilities and funding sources. Key: EHD = Environmental Health Division; MoH = Ministry of Health; DWD = Department for Water Development; TSU = Technical Support Unit; NWSC = National Water and Sewerage Corporation; MoES = Ministry of Education and Sports; MoGLSD = Ministry of Gender, Labour and Social Development; NGOs = Non-governmental organisations; CBOs = community based organisations. WSCG = water and sanitation conditional grant; PHCCG = primary health care conditional grant; SFG = school facilities grant; LGDP= local government development programme. 68 B ­ Analysis by enabling environment, promotion of sanitation demand, strengthening sanitation supply 1. Sanitation enabling environment Main institution Other institutions Current main source of Sources for potential responsible involved funding additional funding Inspection and licensing EHD DWD, Local Govt MoH - Preparation of sanitation work plans for local Local Govt TSU Local Govt funds - government Policy development, guidelines, regulation and monitoring EHD DWD, NGOs, Local Central and Local Govt Donors Govt, MoES funds Coordination of sanitation Sanitation - Central Govt funds - working group Lobbying EHD NGOs MoH Donors Applied research EHD NGOs MoH, NGOs Donors 2. Promotion of sanitation demand Main institution Other institutions Current main source of Sources for potential responsible involved funding additional funding National advocacy campaigns EHD MoH Private sector District level campaigns EHD TSU, NGOs Local Govt Private sector Hygiene promotion around new water points DWD TSU, Local Govt, WSCG NGOs NGOs Community hygiene promotion EHD TSU, Local Govt, PHCCG NGOs NGOs Training of health workers MoES - MoES MoH Preparation of materials EHD NGOs MoH NGOs School based hygiene promotion MoES Local Govt MoES MoH, NGOs Training of teachers MoES MoES NGOs Training of community development workers MoGLSD NGOs, MoES MoGLSD NGOs 3. Strengthening of sanitation supply Main institution Other institutions Current main source of Sources for potential responsible involved funding additional funding Training of masons - NGOs, Local Govt NGOs Donors Development of toilet technology models EHD TSU MoH Private sector Rural household toilets Households EHD, NGOs, CBOs Households Micro credit, CBOs Urban household toilets Households NGOs, Local Govt Households Micro credit, CBOs Public toilets in urban informal settlements Local Govt NGOs, CBOs Local Govt funds, Private sector, NGOs LGDP 69 Public toilets in public places Local Govt NGOs, private sector Local Govt funds, Private sector, NGOs LGDP School toilets MoES Local Govt, NGOs SFG NGOs, private sector Toilets in health facilities MoH Local Govt MoH NGOs, private sector Toilets in other institutions Central / Local - Relevant Central or Local NGOs, private sector Govt Govt department Residential collection of waste Local Govt Private sector Local Govt Private sector Public street collection of waste Local Govt Private sector Local Govt Private sector Transportation of garbage to disposal sites Local Govt Private sector Local Govt Private sector Treatment and disposal of garbage Local Govt - Local Govt Private sector Connections to the sewerage network Households NWSC Households Private sector Maintenance of the sewerage network NWSC Local Govt NWSC Private sector Sewerage treatment and disposal NWSC Local Govt NWSC Private sector Note: This table has been completed after discussions with a sample of stakeholders and review of documentation. It should be viewed as an indicative assessment of responsibilities and funding sources. Key: EHD = Environmental Health Division; MoH = Ministry of Health; DWD = Department for Water Development; TSU = Technical Support Unit; NWSC = National Water and Sewerage Corporation; MoES = Ministry of Education and Sports; MoGLSD = Ministry of Gender, Labour and Social Development; NGOs = Non-governmental organisations; CBOs = community based organisations. WSCG = water and sanitation conditional grant; PHCCG = primary health care conditional grant; SFG = school facilities grant; LGDP = local government development programme. 70 Bibliography Bazeyo W., Colin J., Howard G. and Thompson M. September 2002. "Environmental Health Scoping Study in Uganda: "Capacity building needs assessment and rapid assessment of the broader environmental health profile (Draft)". City Council of Kampala - Department of Public Health and Environment. 2001. "A Pilot Project for Promoting Ecological Sanitation in Kampala, UGANDA". Medium Term Budget Framework paper - FY 2003/4 to FY 2005/6" Meera, Mehta and Knapp Andreas. April 2004. "The Challenge of Financing Sanitation for Meeting the Millennium Development Goals". Memorandum of Understanding on Ministerial Responsibilities for Sanitation/Hygiene Promotion Activities Ministry of Education and Sports. July 2001. "Strategy Paper for the Promotion of Sanitation and Hygiene in Primary Education Sub-sector in Uganda-(Draft)". Ministry of Finance, Planning and Economic Development­ Uganda. August 2002. Infant Mortality in Uganda 1995-2000 Ministry of Health - Environmental Health Division. July 2001. "Strategy Paper on Household Sanitation and Hygiene promotion". Ministry of Health ­ Uganda. July 2000. "National Sanitation Guidelines" Ministry of Health ­ Uganda. October 1997. "National Sanitation Forum" Ministry of Health. "Health Sector Strategic Plan- 2000/01-2004/05" Ministry of Health/SIDA/UNICEF. July 2001. "Guidelines for School Sanitation: School Sanitation Promotion". Ministry of Local Government. November 2002. Fiscal Decentralization Strategy Pilot: "Guidelines for Districts and Municipalities: General Guidelines to Budget Process Vol. 1 (Draft)" Ministry of Water, Lands and Environment - National Water and Sewerage Corporation. August 2003. Sanitation Strategy & Master Plan for Kampala City: Issues paper for the Strategy Workshop". Ministry of Water, Lands and Environment - Directorate of Water Development (DWD). January 2003. "Report on the Water Sector Performance".Ministry of Water, Lands and Environment- Directorate of Water Development (DWD)/Wardrop Engineering Inc/Mugenga Batumbya Consulting Engineers Ltd and MTB Consult. June 1999. "Water Sector Reform: Rural Water and Sanitation Component: Investment Plan and Strategy 2000-2015: Annex III ­ detailed costing, modular designs and Technical Details". Ministry of Water, Lands and Environment Directorate of Water Development. December 2002. "Water and Sanitation Sector. Ministry of Water, Lands and Environment Directorate of Water Development (DWD) Prepared by International Development Consultants. March 2002. "A Tracking Study of the Water Sector Conditional Grants". National Sanitation Task Force - (First Draft). August 1997. "The National Sanitation Policy for Uganda" Rural Water and Sanitation Implementation Strategy and Investment Plan. Task Force on Infant and Maternal Mortality - Ministry of Finance, Planning and Economic Development. March 2003. "Infant and Maternal Mortality in Uganda - Causes, Interventions and Strategy for the way forward"-Why the non-improvement? - Discussion Paper 6". 71 72 About The Sector Finance and Resource Flows Series Africa Region World Bank Hill Park Building Upper Hill Road The Sector Finance and Resource Flows reports are based on country studies on water and sanitation sector financing in Africa. The aim is to Nairobi provide assistance to sector leaders, policy makers and development Kenya partners to help African countries meet the Millennium Development Goals on water and sanitation through: rationalizing allocation of public funds, leveraging non-public resources and improving targeting of Phone: +254-20-3226306 required subsidies. Fax: +254-20-3226386 E-mail: wspaf@worldbank.org Other Sector Finance Publications by WSP-AF WSP MISSION Sector Finance and Resource Flows Publications To help the poor gain sustained access to improved water and sanitation services. Water Supply and Sanitation Sector Finance and Resource Flows Assessment; Zambia WSP FUNDING PARTNERS The Governments of Australia, Austria, Belgium, Canada, Denmark, Germany, Italy, Japan, Sector Finance and Resource Flows Assessments for Water Supply ­ A pilot Luxembourg, the Netherlands, Norway, Sweden, application for Kenya Switzerland, and the United Kingdom, the United Nations Development Programme, and The Ethiopia Water Supply Sector Resource Flows Assessment World Bank. PRSP Publications ­ Available online at www.wsp.org ACKNOWLEDGEMENTS This report was prepared in response to the Water and Sanitation in PRSP Initiatives-A Desk Review of the Emerging Experience sanitation undertaking at the 2003 Joint Sector in Sub-Saharan Africa (SSA) Review (JSR): `to establish clear budget mechanisms for sanitation at all levels'. It is also part of a series of studies of sector resource Water supply and Sanitation in Poverty Strategy Papers in Sub-Saharan Africa: flows being conducted by the Water and Developing a Benchmarking Reviewand Exploring the Way Forward Sanitation Program, Africa. Factors behind the Poor Integration of the Water and Sanitation Sector in PRSPs in This document was prepared by Mike Thomson, Sub-Saharan Africa-Lessons from Uganda, Malawi and Zambia-Brief (with ODI at for the Environmental Health Division of the www.odi.org.uk) Ministry of Health and the Water and Sanitation Program-Africa. Sector Financing-Global and Regional Reviews Contribution and feedback from a number of - Available online at www.wsp.org stakeholders in Uganda have helped in its preparation: Paul Luyima and his team at the EHD, MoH, Uganda, Sam Mutono and the rest The challenge of Financing Sanitation for Meeting the Millennium Development of the Sanitation Sub-Sector Working Group Goals (SSWG), Members of the MoH Policy Advisory Committee (HPAC) and Simon Kenny of DFID. Meeting the Financing Challenge for Water Supply and Sanitation (Full Report) The WSP-AF task team comprised: Meera Meeting the Financing Challenge for Water Supply and Sanitation (Summary) Mehta (Task Manager), Andreas Knapp, Maimuna Nalubega and Anthony Waterkeyn. . Financing Small Water Supply and Sanitation Service Providers: Exploring the Micro-Finance Option in Sub-Saharan Africa Financing the Millennium Development Goals for Water and Sanitation: What will Production Assistance: Norah Osoro, Jecinter ittake? Synthesis paper for Global WASH Forum Hezron and Florence Makokha TheWSPWorkingPapersdisseminatethefindingsofworkinprogresstoencouragetheexchangeoflessonsandexperienceson water and sanitation issues. An objective of the series is to get the findings out quickly, evenifthepresentationsarelessthanfully polished.Thefindings,interpretations,andconclusionsexpressedinthepapersareentirelythoseoftheauthors.Disseminationof the material is encouraged and the Water and Sanitation Program will normally grant permission promptly. For questions about this report, including permission to reprint portions or information about ordering more copies, please contact the Water and SanitationProgrambye-mail. TheWSPWorkingPapersareavailableonlineathttp://www.wsp.org.