SWA’s Role in Improving Aid Effectiveness in the WASH sector

SWA Country Processes Task TeamGeneva, November 2013

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Agenda

1. Background

2. Aid effectiveness and the WASH sector

3. Strengthening country processes: examples from Liberia and Niger

4. Learning from other sectors

5. Trends: the changing aid landscape

Aid Effectiveness - Background

‘Aid effectiveness is the effectiveness of development aid in achieving economic and social development.’

‘It is about improving the quality of aid and its impact on development.’

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Why the need for increased effectiveness?

• Delivering effective development assistance is not only about quantities of aid but also about how it is delivered and used

• From 1970s to mid 1990s the predominant financing modality was the project based approach

• High transaction costs; burden on recipient countries to comply with many different donor requirements and procedures

• Fragmentation (donor darlings and orphans), duplication, lack of coordination, wasted resources

• Little accountability

• Isolated stand-alone projects, lack of longer-term focus on strengthening country processes; no capacities to sustain project results

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The International Aid Effectiveness Agenda

• 2005 Paris Declaration

• 2008 Accra Agenda for Action

• 2011 Busan Partnership Agreement complemented by

the New Deal for Engagement in Fragile States

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Principles of Aid Effectiveness

1. Ownership: Partner countries exercise effective leadership over their development policies and strategies and coordinate development actions

2. Alignment: Donors base their overall support on partner countries’ national development strategies, institutions and procedures

3. Harmonisation: Donor actions are coordinated, where their procedures are simplified and they share information to avoid duplication

4. Managing for results: Managing resources and improving decision making for results; and

5. Mutual accountability: Donors and partners hold each other accountable for development results.

Aid Effectiveness in the WASH Sector

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Strengthening Country Processes to deliver universal access to lasting services

• Increased sector capacity ensures governments can be held accountable for delivering sustainable WASH services to all citizens.

• Sector’s capacity to organize and oversee the delivery of services are fundamental to accelerating progress.

• Key building blocks of an effective sector include:

• Sector policy/strategy

• Sector coordination and dialogue

• Sector financing and budgeting

• Sector performance monitoring and learning

• Systemic approach to strengthening WASH sector capacities

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Virtuous cycle ofaid effectiveness

Source: Adapted from Williamson et al., 2008

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In practice…

• Remarkable gains in access to WASH

• Benefits are very unevenly distributed

• Aid is not well targeted

• Harmonisation and alignment continue to be a challenge.

• Processes remain highly fragmented, with multiple funding sources and dispersed domestic institutional arrangements

• Aid dependency and unpredictability

• Budget (Sector) support not significant

• Funding focused on new infrastructure insufficiently for sustaining a service

• Weak absorption capacity at all levels

Strengthening WASH Systems: The Cases of Liberia and Niger

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Key Findings

• Persistent aid dependence

• Susceptibility of the sector to broader institutional gaps of parent Ministries

• Improving policy and governance environment often not followed by expected investments

• Continuation of traditional funding modalities

• Need for cross-sector learning

• The 2015 Funding Cliff: Drastic funding falls beyond 2015

• Balancing the need for improving access, capacity, and institutional development

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Declining levels of Available funding: 2015 funding cliff?

Figure 1 Comparison of available financing, selected sub sector headings

Source: Constructed from MHE BPO data, Joint Review 2013

0%

20%

40%

60%

80%

100%

120%

2014 2015 2016

Comparison of Available financing for Based on Scenarios 1 and 2

Rural Water Scenario 2

Rural Water Scenario 1

Basic Sanitation:Hygiene promotionScenario 2

Basic Sanitation:Hygiene promotionscenario 1

Urban Water Scenario 2

Urban Water Scenario 1

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Liberia Funding gap after 2015

Learning from Other Sectors

Lessons from the health and education sectors

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Global Partnership for Education (GPE)

• Linking Partnership Mission with aid effectiveness - GPE Compact on Mutual Accountability outlines commitments of developing country governments, donors, and other partners respectively

• Strengthening structures and institutions e.g. through national education plans, Local Education Groups, sector coordination framework document and JSRs

• Sector-specific indicators to measure aid effectiveness

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Education example

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Mutual accountability

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International Health Partnership (IHP+)

• IHP+ Global Compact provides a set of principles and commitments for all signatories, calling for well-coordinated collective efforts focusing on delivering accessible sustainable health systems, and backing comprehensive country owned and developed health plans.

• IHP+ Results monitoring process reports donor and country progress against adapted Paris indicators

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Examples of IHP+ SPMs

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IHP+ Example 2

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Lessons learned

• Global and Country Compacts provide measurable tools for reinforcing mutual accountability at the country level

• Linking Partnership vision and mission to aid principles necessitates discussion of ways of working to achieve these goals

• Shared understanding of sector specific milestones and indicators promotes open dialogue to define and measure commitments

• Use and support country level networks increases bottom-up accountability and enhances feedback on partner performance

• Utilising existing data collection processes minimises transaction costs

• Assessing performance between partners and non-partners provides evidence of the role of a common framework for action

The Role of SWA

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Trends

Aid Effectiveness is more important than ever...

• Fiscal austerity in OECD countries is putting pressure on donor aid -increased emphasis on “value for money”, sustainability and impact of ODA

• Relative decrease for WASH as a proportion of total ODA

• In many low income countries, WASH sector remains highly dependent on aid

But the landscape it becoming more complex....

• Significant increase in the share of non-traditional donors

Discussion points

Thank You!