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    Water Sector Governance

    inAfrica

    Volume 1Theory

    and Practice

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    Water Sector Governance

    inAfrica

    Volume 1Theory

    and Practice

    ISBN 978-9973-071-48-4

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    This document was prepared by the Water Partnership Program (WPP) of the AfricanDevelopment Bank.While every effort has been made to present reliable information, the African Development Bankaccepts no responsibility whatsoever for any consequences arising out of its use nor is any opinionexpressed in this publication necessarily the opinion of the Bank. The material in this publication iscopyrighted. Copying and/or transmitting portions or all of this work without permission of theAfrican Development Bank may be a violation of the applicable law.

    AcknowledgementsThis study was coordinated by Thomas Roberts, Senior Water and Sanitation Engineer, with support

    from OWAS / AWF during review of the study outputs during the three stages of its development.

    The Bank acknowledges the authors Michael McGarry, Silver Mugisha, Luc Hoang-Gia, Per Unheimand Meghan Myles from Cowater.

    The African Development Bank Group undertook the study with the financial support of its WaterPartnership Program donors i.e. the Government of Denmark, the Netherlands and Canada (CIDA).

    Logo

    African Development Bank

    External Relations and Communication UnitYattien-Amiguet L.

    Graphical Conceptualization

    African Development Bank, External Relations and Communication Unit in cooperation with FinziUsines graphiques; Justin Kabasele T. and Mouna Lazzem

    Photos

    Pictures on pages ix, 3, 31, 39, 44, 73 and 75 by Cowater.All other pictures by AfDB.

    Printing

    Finzi Usines Graphiques

    Coordination

    Consultants Bent Nrby Bonde and Sren Bauer

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    iii

    Table of contentsAcronyms ivForeword vii

    Executive Summary ix

    1.1 Governance 11.2 Sector Policy and Legislation 51.3 Regulation 111.4 Decentralization 181.5 Sector-wide Approaches 261.6 Sector Financial Management 301.7 Monitoring and Evaluation 341.8 Water Resources Management 401.9 Transparency and Accountability 441.10 Corruption 471.11 Civil Society Participation 521.12 Alternative Service Providers 571.13 Gender 621.14 Rights and Voice 661.15 Equitable Service Delivery 70

    Annex A: Field Assessment Results 74

    References 78

    List of Tables

    Table 1: Broader Aspects of Governance and their Linkages to the Water Sector 4Table 2: African Water Sector Regulation Models 11Table 3: Alternative Service Providers 58Table 4: Access to Improved WSS in Sub-Saharan Africa (2006/1990) 70Table 5: Improved Sanitation Coverage by Wealth Quintiles in 38 Developing Countries 71Table 6: Distribution of Those who Usually Collect Water 71

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    iv

    AfDB

    AMCOW

    ASP

    AWF

    CIDA

    GIS

    GWA

    GWP

    H&A

    IFPRI

    IMF

    IPCC

    IRC

    IWMI

    IWRM

    JMP

    M&E

    MDG

    MTBFMTEF

    MTFF

    MWE

    NDW

    NWSC

    ODA

    ODI

    OECD

    OSS

    OPM

    OWAS

    PFM

    PHAST

    African Development BankAfrican Ministers Council on WaterAlternative service providerAfrican Water FacilityCanadian International Development AgencyGeographic Information SystemGender and Water AllianceGlobal Water PartnershipHarmonization and alignmentInternational Food Policy Research InstituteInternational Monetary FundInternational Panel on Climate ChangeInternational Water and Sanitation CentreInternational Water Management InstituteIntegrated water resources managementJoint Monitoring ProgramMonitoring and EvaluationMillennium Development Goals

    Medium Term Budget FrameworkMedium Term Expenditure FrameworkMedium Term Financial FrameworkMinistry of Water and Environment, UgandaNational Directorate of Water, MozambiqueNational Water and Sewerage CorporationOfficial development assistanceOverseas Development InstituteOrganization for Economic Cooperation and DevelopmentSahara and Sahel ObservatoryOxford Policy ManagementWater and Sanitation Department, AfDBPublic financial managementParticipatory Hygiene and Sanitation Transformation

    Acronyms

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    v

    PPP

    PRSP

    PSP

    RBORWSS

    SADC

    SWAp

    TA

    TI

    TPTC

    TWRM

    UNICEF

    WHO

    WHS

    WPM

    WSP

    WSS

    Public-private partnershipPoverty Reduction Strategy PaperPrivate sector participation

    River basin organizationRural water supply and sanitationSouthern African Development CommunitySector-wide ApproachTechnical assistanceTransparency InternationalTripartite Technical CommitteeTransboundary water resources managementUnited Nations Childrens FundWorld Health OrganizationWorld Health SurveyWater Point MappingWater and Sanitation ProgramWater supply and sanitation

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    vii

    equitable service delivery. The study highlights

    current thinking and research on all these key

    elements and issues affecting their quality.

    Contemporary literature on water sector financing

    understandably focuses on the mechanisms and

    challenges associated with funding tangible water

    supply and sanitation services. This study however

    draws attention to the importance of financing

    overarching water management and governance

    functions, from strategy, planning and policy-

    making and engagement with sector stakeholders

    to water resource development, allocation and

    management.

    Based on the reports findings, indicators and

    targets have been developed to improve the

    sectors governance. Volume 1 titled: Theory and

    practice presents the findings, indicators and

    targets to be achieved while Volume 2 presents

    concrete Assessment guidelines for conducting

    water sector governance assessments forprograms and projects in Africa, based on the

    findings of Volume 1.

    The Bank is pleased to offer this thought-

    provoking assessment and the tools developed as

    a contribution to efforts at improving governance

    in Africas water sector.

    Bobby J. Pittman

    Vice President

    Infrastructure, Private Sector & Regional Integration

    AfDB

    ForewordWater governance has been described as the

    range of political, social, economic and

    administrative systems that are in place to develop

    and manage water resources and the delivery of

    water services, at different levels of society.

    Good governance mainly depends on the quality

    of leadership, the strength of the institutions and

    how efficiently, effectively, sustainably, and

    transparently the resources are managed by

    sector institutions and main stakeholders.

    On the African continent however, rigorous

    technical, financial, economic and institutional

    assessments undertaken in support of projects

    have not guaranteed sustainability of project

    outputs and outcomes. This checkered history of

    water sector projects over the past three decades

    provided the rationale for the African DevelopmentBank to launch this initiative to assess water

    sector governance in Africa.

    This report takes preliminary steps to investigate

    whether poor governance has been a major

    contributing factor to this lack of sustainability.

    Specifically, the report provides an overview and

    assessment of the state of water sector

    governance in Africa looking at a very broad

    range of governance-related elements, including

    legislation and regulation, decentralization and

    devolution, sector-wide approaches, financial

    management, monitoring and evaluation,

    accountability and corruption as well as civil

    society participation, gender, alternative service

    provision, public-private partnerships and

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    ix

    Not surprisingly, the Study identified numerousbut common governance risks that havecontributed greatly to this chequered history. Itfound that these are readily identifiable andeasily mitigated against, and that substantialgains would be made if governanceassessments became standard procedure andgovernance criteria were introduced into donorproject approval procedures.

    This report, an abridged version of the Studyssecond chapter, provides an overview of thestate of water sector governance in Africa andhighlights current thinking and research on thekey elements and issues affecting its quality.These include: sector policy, legislation and

    Executive Summary

    The objectives of the AfDB-financed AfricanWater Governance Study1 from which this reportwas derived were to assess the state of watersector governance in Africa, develop indicatorsand targets for its improvement, and raiseawareness among all stakeholders.Furthermore, Volume 2, AssessmentGuidelines provides guidelines for AfDB watersector staff and other water sector practitionersto use when developing programmes andprojects in Africa.

    The current state of water sector governanceacross Africa was assessed through missionsto seven countries, a literature review, and four AfDB-OWAS and in-country workshopsorganized between June and December 2008.

    The chequered history of sector projects over

    the past three decades provided the rational forthis initiative. This history has amplydemonstrated that despite the rigoroustechnical, financial, economic and institutionalassessments undertaken in support ofprojects, the sustainability of project outputsand outcomes remains far from certain. TheStudys underlying assumption was that poorgovernance has been a major contributingfactor in this regard.

    1Cowater International, (2008b) AfDB Study on Water Sector Governance: Final Report, Water and Sanitation Department

    (OWAS), African Development Bank, Tunis, December.

    AfDB and Cowater representatives at a workshop on the Water sector Governance Study

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    x

    been the subject of significant debate and areaddressed individually in the report. In short,however, it can be said that:

    i) sector policy is widely recognized a meansfor creating the enabling environment necessaryfor sector development, despite the lack of aclear blueprint on what related policies shouldentail;

    ii) legislation is the mechanism forincorporating this policy into national politicaland legal frameworks, ensuring the effectivefunctioning of the sector, protecting individualand communal water rights and establishingconflict resolution mechanisms; and

    iii) regulation entails the system of instrumentsthat enforces and oversees the implementation

    of sector policy and legislation.

    Decentralization has become a keymechanism in sector reform since the conceptof subsidiarity the management of waterresources at the lowest appropriate level wasintroduced within the Dublin Principles in 1992.

    regulation; decentralization and devolution;sector-wide approaches; water sector financialmanagement; monitoring and evaluation (M&E)integrated and transboundary water resourcesmanagement (IWRM and TWRM); transparency,accountability and corruption; civil societyparticipation; alternative service provision andpublic-private partnerships; gender; rights, voiceand recourse; and, equitable service delivery.

    The Studys findings are summarized below.

    While local and national institutions have themost visible role to play in governing the watersector, it is the sectors underlying policies,legislation and regulations that provide thefoundation for its overall governance. Some ofthe key roles sector institutions andorganizations need to fulfil in developing and

    carrying out the underlying legislation, policiesand regulations include strategic policy-makingand planning for water and related sectors;conflict resolution and arbitration; and, theregulation and monitoring of water users andservice providers. The various approaches andprinciples underlying each of these roles have

    Rural water supply,

    Cape Verde

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    2Van Hofwegen, Paul (2006) Task Force on Financing Water for All: Enhancing Access to Finance for Local Governments;

    Financing Water for Agriculture, World Water Council (WWC), Global Water Partnership (GWP) and the 4th World Water Forum.

    xi

    sector. Whereas in some countries, such asUganda SWAps appear to be having a positive

    impact on sector governance, their impact in themany Sub-Saharan African countries that lackthe appropriate institutional capacity to managethem effectively appears to be neutral at bestand inhibiting at worst, particularly if theresources devoted to managing them arediverted away from more critical pursuits.

    The contemporary literature on water sectorfinancing epitomized by the 2006 Gurria TaskForce on Financing Water for All2 focusespredominantly on the mechanisms andchallenges associated with funding tangiblewater supply and sanitation services, from ruraland urban water supply schemes to sanitationinfrastructure. Yet what this focus on financing

    The concept of decentralization a general termcommonly referring to the transfer of political,

    financial and administrative authority, includingdecision-making and management, from centralgovernment to lower levels is first distinguishedfrom devolution, which falls under the largerconcept of decentralization and refers to thetransfer of management and decision-makingpowers, rights and assets to local institutions,governments or communities that are largelyoutside the direct control of the centralgovernment, and from deconcentration referring to the transfer of administrativeresponsibility for specific functions to lowerlevels within the central governmentbureaucracy without any real transfer ofauthority between levels of government. Thesection goes on to note that while the process ofdecentralization has become widespreadthroughout Africa, the devolution of water sectordecision-making authority to local levels is

    occurring with varying degrees of success, inmany cases due to excessive central controlover sector revenues and intergovernmentaltransfers. This can often serve as a majorconstraint to effective and transparent planning.

    With regards to sector-wide approaches(SWAps), it is noted that while each arepromising in theory, debate continues over theireffectiveness in practice across the developing

    world, particularly with regards to the water

    Water pipeline, Sidi Bel Abbs, Algeria

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    3 Rees, Judith, Winpenny, James and Hall, Alan W. (2008) Water as a Social and Economic Good, TEC Background Papers

    No. 12, Global Water Partnership.4Dublin Statement (1992) Dublin Statemet on Water and Sustainable Development, International Conference on Water and

    the Environment, Dublin, Ireland.

    water supply and sanitation (WSS) servicesignores, others argue, is the importance of

    financing overarching water management andgovernance functions, from strategy, planningand policy-making and engagement with sectorstakeholders to water resource development,allocation and management3. In other words,effective water governance depends not only onhow much financing can be mobilized, but alsoon the extent to which these resources aremanaged and allocated efficiently, effectively andsustainably by recipient institutions across the

    sector. While the literature demonstrates astrong degree of consensus on the importanceof decentralizing WSS delivery and expendituremanagement responsibilities to the lowestappropriate level, this is accompanied byrecognition of the need to first improve themanagerial and technical capacities of localauthorities.

    Monitoring and evaluation has become anessential tool not only for good watergovernance, but also for sector developmentand environmental sustainability. Nevertheless,the calibre of water sector M&E systems acrossthe African continent is generally recognized tobe at an early stage of development. Mostmonitoring systems are project-based and haveserved mainly the purposes of donors, doinglittle to support sector planning, budgeting and

    management processes. Far more in-depth and

    better quality monitoring istherefore needed for sector

    management, transparencyand accountability, especiallywithin the budget supportframework.The section on integrated andtransboundary water

    resources management

    (IWRM and TWRM,respectively) notes that thetwo are inter-related concepts

    that have been the basis forsector reform in recent years. Although the principles to beapplied in the sector underIWRM are sound, actual implementation iscompli-cated. African countries tend to belagging behind in this regard, althoughadvances are beginning to be seen in thesector. The Dublin Principles4 form the basis

    for IWRM, which has since become anaccepted model for improved governance inthe water sector by providing a viableframework for the sustainable use andmanagement of water resources based on thecatchment or basin being the most appropriatescale for water resources management. TWRM, on the other hand, represents asituation in which water governance iscomplicated by issues of politics and

    competition for scarce resources between two

    xii

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    xiii

    Africa, leading to increased costs to users forWSS service provision. According to

    Transparency International, the water sector isespecially vulnerable to corruption for severalreasons: the existence of numerous agencies,actors and government institutions in a singlesector blurs lines of accountability and reducestransparency; the water sector involves theprocurement of significant quantities of goodswith large volumes of public money; informalservice providers less subject to officialoversight mechanisms play a key role in service

    delivery; and the widespread presence ofmonopolies promotes unfair or discretionarybusiness practices. Finally, informal providers,often vulnerable to corruption, also play a keyrole in service delivery. Others add that thesector is characterized by widespread financialdisorder, few service providers are accountableto their customers and financial management isnot transparent.

    With regards to civil society participation in

    sector governance, the involvement of all users

    in the process of developing appropriate policies

    and regulations for water resources

    management and use is essential for effective

    water sector governance. Participation of civil

    society and the permanent mechanisms that will

    enable it are essential in every aspect of

    governance, from project and programme

    selection and planning, to budgeting, policy andregulation. This not only improves sustainability

    of services, but also improves transparency,

    accountability and regulatory enforcement.

    or more countries. The literature on thesubject notes that TWRM cannot be

    conducted purely on a state-to-statebasis, however, for many otherstakeholders from the local to theinternational level typically need to beinvolved. Furthermore, weak legal andregulatory frameworks, a lack ofbasin-wide institutional arrangementsfor joint development andmanagement of transboundary waterresources, poor water resources

    information systems, poor financingand a lack of stakeholder participationalso affect the success of TWRM.

    Two basic principles discussed widely in theliterature and considered prerequisites for goodwater governance are transparency andaccountability, which are closely related to oneanother within the context of governance

    systems. For instance, transparencynecessitates strong sector performancemonitoring systems, which will enhanceaccountability for the use of resources byservice providers. Decentralization provides anopportunity for the introduction of transparencyand accountability measures, but alsointroduces threats to the same if communityand civil society voices are not well articulated.

    Moreover, corruption in the water sectorresults from a lack of transparency andaccountability. Corrupt practices are endemicto most WSS institutions and transactions in

    A Well in Northern Malawi

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    Womens participation in water sector

    governance has become widely recognized as

    essential to the sectors development. Manydeclarations have been agreed upon and

    commitments made at international meetings

    in support of gender equality. The Dublin

    Statement (1992) recognized the pivotal role

    of women, the Rio Declaration (1992)

    recognized their full participation as essential

    to sustainable development, the World

    Summit on Sus-tainable development called

    for ensuring that infrastructure and services

    are gender sen-sitive, and the MDGs include2015 targets on gender equality and

    empowerment of women. Gender equality

    and mainstreaming in the sector have also

    xiv

    been given extensive attention, and methods

    by which these can be assessed and

    addressed are being demonstrated. Yet thereis still little evidence to suggest that water

    management has deliberately and consciously

    addressed gender concerns. National water

    policies rarely include more than the mention

    of womens important role and do not have a

    comprehensive and consistent gender focus.

    Closely related to the questions of gender and

    civil society participation in water sector

    governance are the issues of rights, voice andrecourse and equitable service provision.

    Numerous international conventions protect

    individual rights to basic services such as

    Diama dam,

    Senegal

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    xv

    sufficient, clean, accessible, and affordable

    water and sanitation and seek to protect

    vulnerable and marginalized groups fromdiscrimination. All too often, however, research

    indicates that water is not distributed equitably

    among all users, resulting from factors relating

    to transparency and accountability underscored

    by inadequate mechanisms for citizen

    participation. Of particular concern are the large

    and increasing numbers of slums and peri-

    urban areas and their female inhabitants in

    particular who, despite being responsible for

    water, sanitation and the health of their families,

    are often disempowered and left out of

    decision-making processes.

    Finally, public private partnerships and

    alternative service providers are shown to play

    a significant role in the water sector in Africa

    and that further investment from the private

    sector will be required to meet the MDGs.

    Nevertheless, there is no clear blue print

    solution for private sector participation in water

    sector reforms. Yet if the realities of their

    situation are understood, the poor can stand to

    benefit from it.

    Queuing for Water in

    Nampula province,

    Mozambique

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    1

    1.1 Governance

    The concept of governance applies at both themacro (country level) as well as micro(institutional or sectoral) levels. As a result, itsmeaning depends on the context within whichit is used.

    For the purposes of this study, governance atthe macro level is defined as:

    The exercise of economic, political and

    administrative authority to manage a countrysaffairs at all levels it comprises themechanisms, processes and institutionsthrough which citizens and groups articulatetheir interests, exercise their legal rights, meettheir obligations and mediate their differences5.

    While this definition implies that governmentsat the central, regional or local level are the

    primary actors in a countrys system ofgovernance, public institutions are in fact onlyone category of actors with a determiningstake in national governance. Civil society,composed of non-governmental andcommunity-based organizations (NGOs andCBOs), donors, research institutes, religiousgroups, media, lobbyists, and individuals,among others, also play an important role. Ananalysis of governance must therefore focus on

    all the actors and structures in place to makeand implement the decisions that shape andregulate the lives of citizens.

    Governance at the macro level is increasinglybecoming a central focus of development

    assistance. As a result, several different toolsand frameworks have been developed toassess the quality of governance withinindividual countries. These include indicatorsthat enable comparisons over time as well asacross countries and regions. They generallyfocus on specific subsets of governance thatrelate to democracy, human rights, policies,public sector management, accountability,legislation, corruption, financial management

    and internal conflict.

    Nevertheless, while indicators such as theseprovide a general overview of governance in acountry, they seldom address the gap betweenformal arrangements and realities on the

    ground. It is therefore prudent to use them onlyas one of many sets of tools to inform policyand decision-making in any particular country.

    5 UNDP (2001) in Rogers, Peter and Hall, Alan, (2003) Effective Water Governance, GWP TEC.#7

    Rwanda

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    2

    Subsets of micro-level indicators, such aswater sector policy, can be used to explore

    specific aspects of governance. In both cases,however, attention should be paid to marginsof error as few governance indicators areobjectively measurable; most includesubjective perceptions.

    Some of the most informative data sets ongovernance in the public domain include:

    World Bank Country Policy and Institutional

    Assessment (CPIA-WB); African Development Bank Country Policy

    and Institutional Assessment (CPIA-AfDB); World Governance Indicators (WGI), Kauff-

    man, Kraay and Mastruzzi, World Bank; Corruption Perception Index (CPI), Trans-

    parency International; Failed States Index, Fund for Peace; Millennium Challenge Corporation Coun-

    try Scorecards; and, Ibrahim Index of African Governance.

    From these assessments, trends in the quality ofgovernance in individual countries across theworld can be observed. The World GovernanceIndicators, for example, demonstrate significantchanges in 31 percent of countries over the pastdecade in at least one of its six aggregate

    indicators. This indicates that changes in gover-nance can occur within relatively short periods of

    time, even if those changes are not necessarilypostive; after 12 years of monitoring governanceusing these indicators6, there is no convincingevidence to conclude that there have beensignificant improvements worldwide. With respectto corruption, Transparency Internationals latestCorruption Perception Index rates all sub-Saharan African countries below 6 out of 10, and mostbelow 57. Some countries have experiencedsignificant changes from the last index, while

    others have witnessed significant deteriorations.Overall, the CPI serves to highlight thatperceptions of corruption are capable of changingquickly both positively and negatively.

    6Kauffman et al, (2008), Governance Matters VII: Aggregate and Individual Governance Indicators 1996 2007, World Bank,

    Washington.7Transparency International, (2008), Corruption Perceptions Index.

    Water and Sanitation Development Board Offices, Ashanti, Ghana

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    8UNDP, (2004), Water Governance for Poverty Reduction, UNDP, New York, p.17,9 Plummer and Slaymaker, (2007), Rethinking Governance in Water Services, Overseas Development Institute, London, UK

    3

    Water Sector Governance

    As described above, the concept of governancecan be applied at both the macro and microlevels: to countries as a whole as well as toindividual institutions and sub-sectors withinthem. Water sector governance, at the microlevel, is defined by GWP and UNDP as: therange of political, social, economic andadministrative systems that are in place todevelop and manage water resources and thedelivery of water services, at different levels of

    society8. Many of the processes and institutionswill be defined directly by the central government,and these must function within the existinggovernance framework in the country.

    Good water governance is based on principlesof good governance, which include equity,efficiency, participation, decentralization, inte-gration, transparency and accountability. Yet

    there is also a tendency in the water sector toreduce issues to their component parts andthereby lose sight of the overall governancepicture. Until recently, most aspects ofgovernance have been treated in isolation. Theapplication of mitigation measures (e.g.decentralization, participatory planning, etc.) has

    often been seen as an end in itself. Real

    improvements in governance have become lost

    and linkages between sector governance and

    the wider governance context overlooked.

    Table 1 (adapted from Plummer and Slaymaker,

    2007) demonstrates how water sector

    governance is closely tied into broader aspects

    of governance at the national level.

    Moreover, recent studies have demonstrated

    that there is a direct correlation between the

    countries most lacking water services and those

    with the weakest governance9. Improving

    governance in the water sector is therefore notonly about government systems and services

    delivery; it encompasses a much broader range

    of factors, including engaging civil society, non-

    state agents and their relationship to

    government. Sustainable services are not

    achieved without involvement of other

    stakeholders and particularly water users in the

    development of the policies and laws for sector

    development. This applies equally well to water

    resources management, with good sectorgovernance backed by appropriate policies and

    laws being a key determinant of the sustainability

    of water resources.

    Presidential

    palace,

    Senegal

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    4

    With an understanding of the linkages betweenthe broad concept of governance and its

    application at the sectoral level, water sectorpractitioners are better equipped to formulatepolicies, projects and programmes intended toimprove the governance of their sector and its

    subcomponents. The sections that followdescribe how each of the sub-components

    noted in the table above affect and fit into watergovernance systems and practices andtherefore contribute to or detract from thequality of macro-level governance.

    Governance Aspect Water Governance Context

    Political stability and personal securityRole of water in conflict-resolution and as an essential

    basic service in recovery and reconstruction.Economic and social policy management

    Integrating water into poverty reduction strategies; role of

    water services in facilitating economic growth.

    Government effectiveness and service deliveryCapacity of local government/utilities in managing, and

    maintaining WSS service delivery.

    Revenue mobilization and public financial management Financing WSS service provision at national and local levels.

    Conditions for private sector investmentPolicies, legislation, regulations and incentives for private

    sector participation in WSS service delivery.

    Political participation and checks & balancesStrengthening consumer/user voice to enhance

    accountability for WSS services.

    Transparency and mediaImproving access information on WSS rights, access,

    planning, budgeting and expenditures.

    Judiciary and rule of lawEnsuring water rights and providing for recourse,

    arbitration, conflict resolution and appeal.

    Civil societySupport sectoral social accountability mechanisms to

    ensure effective service provision.

    Respecting human rightsProcess of articulating, agreeing, implementing and

    monitoring the fulfillment of rights to WSS.

    Pro-poor policy

    Water service delivery approaches responding to incre-

    asing demand from poor households for adequate and

    affordable services.

    Gender equityGender-based approaches to service delivery, womensparticipation in user groups and decision-making bodies;

    gender-disaggregated data.

    Regulatory quality

    Regulatory environment that encourages pro-poor service

    delivery and minimum standards for water services while

    combating water pollution.

    Corruption and integrityTackling misallocation and diversion of resources intended

    for WSS service delivery improvements.

    Table 1

    Broader Aspects of Governance and their Linkages to the Water Sector

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    5

    1.2 Sector Policy

    and LegislationThe overall purpose of sector policy is to serveas the means for establishing and maintainingthe enabling environment necessary for sectordevelopment. From a governance perspective,involving all relevant stakeholders in the policy-making process is as important as thedefinition of policy objectives and mechanismsthemselves10.

    With regards to objectives and mechanisms,

    policies tend to either (1) focus on high level

    goals such as increasing access to water and

    sanitation for the poor, or attaining the

    Millennium Development Goals (MDGs) a

    common feature of most contemporary

    Poverty Reduction Strategy Papers (PRSPs)

    or (2) emphasize mechanisms such as the use

    of local resources in WSS infrastructure

    development, mechanisms to finance sector

    projects11, means to improve the capacity of

    irrigation schemes12/13, or private sector

    participation in service delivery, as has been

    the case in Ghana14. Many policies take a

    more holistic approach by combining

    objectives and mechanisms, as has recentlybeen the case in Ethiopias sanitation sector.

    There, stakeholders have been working to

    create an enabling environment for and

    achievement of universal access to sanitation

    over the past five years through the

    formulation of an appropriate policy and

    strategy followed by the launch of a National

    WASH programme. The national hygiene and

    sanitation strategy sets out key principles,

    and the National Hygiene and SanitationProtocol describes what needs to be done to

    achieve universal access. Moreover, the

    strategy and protocol are rooted in

    government programmes like the WASH

    Universal Access Programme and the Health

    Services Extension Programme15.

    With regard to process, the ways in which

    policies are developed is a major determinant of

    the quality of eventual policy outcomes. Two

    broad approaches to policy development

    centralized and decentralized policy-making

    can be compared.

    10 Gordon McGranahan and David Satterthwaite, Governance and Getting the Private Sector to Provide Better Water and

    Sanitation Services to the Urban Poor, Human Settlements Discussion Paper Series (International Institute for Environment

    and Development, 2006)11 AMCOW (2008) Can Africa Afford to Miss the Sanitation MDG Target? A contribution to AfricaSan 2008, African

    Development Bank, World Bank and WSP p. 41.12 nternational Water Management Institute (IWMI) (2006) Water Governance in the Mekong Region: The Need for More

    Informed Policy-Making, Water Policy Briefing, Issue 22, based on research by Francois Molle and Randolph Barker, IWMI.13 Global Water Partnership (GWP) (2005) Integrated Water Resources Management Plans: Training Manual and Operational

    Guide, GWP, Stockholm, Sweden.14 Fuest, Veronika and Stefan A. Haffner, PPP-Policies, Practices and Problems in Ghanas Urban Water Supply, Water

    Policy, Vol.9. No.2 (IWA Publishing, 2007) pp 169-19215AMCOW, 2008, 41.

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    In centralized systems, an executive-level

    planning body of senior officials from apex

    ministries coordinates and controls sectorplanning and policy development. Policy

    formulation is unencumbered by long

    consultative processes with local governments

    and user associations. Some argue that

    governance is thereby strengthened through

    rapid development and implementation of sector

    policy. This approach seems to have served

    Tunisia and Israel well, but it does not allow for

    sufficient demand-side input during the policy-

    making process. This creates a greater risk of thepolicies not being appropriate to or accepted at

    lower echelons. Furthermore, this approach

    circumvents the opportunity to build policy

    networks with key decision-makers within and

    around sector ministries that will help determine

    the eventual success of policy at the

    implementation stage.

    Ismailia Canal, Egypt

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    Ugandas Water Action Plan

    16

    The first milestone in Ugandas IWRM processwas the development of the Water Action Plan(WAP) the first of its kind following theinternationally agreed principles from the UNConference on Environment and Developmentin Rio de Janeiro in 1992. The WAP outlined aframework for water resources managementbased on identification of the key water resour-ces issues set against the background of gaps

    and constraints in the enabling environment,the institutional roles and the managementinstruments. The action plan assisted thedevelopment of the water resources policy andthe legislative framework, defined short termand long-term roles and responsibilities of theinvolved institutions and assessed their needsfor capacities, capabilities and managementinstruments. Cross-sectoral aspects weredealt with in a committee with representativesfrom a number of relevant ministries, fromdistricts, from water services providers andfrom the private sector. A number of actionswere programmed all aiming at supporting theoverall policies and strategies.

    Over the last ten years the IWRM frameworkhas been built up to a degree where Ugandahas asserted its role in the Nile Basin, where a

    consistent policy and legislation provides theguidance and rules for priorities of water use,allocation and wastewater discharge, andwhere stakeholder participation and decen-tralization provides local level involvement. The

    identified programme activities in the WaterAction Plan 1994 has provided the road mapfor this development. This has resulted, amongother things, in empowerment both at local,regional and international levels.

    Malis National Sanitation Policy17

    Malis first National Sanitation Forum took place

    in Bamako in 2006 and concluded that there

    was an urgent need for a National Sanitation

    Policy and sub-sector strategies. Since thendraft documents have been written by the

    DNACPN in collaboration with the National

    Directorate for Water (DNH) and with assistance

    from international and national consultants. They

    were discussed and improved upon at the

    second National Sanitation Forum in 2007 by

    representatives of central government

    institutions, local authorities, international and

    domestic NGOs, private sector representatives

    and donor agencies. The final version of the

    National Sanitation Policy was disseminated the

    following week to the Secretariat General of the

    Government for discussion and validation. The

    new policy determines guiding principles for the

    sector, sets goals to be achieved by 2015 or

    2020, clarifies the responsibilities of each

    stakeholder, proposes the creation of a

    coordination mechanism, exposes guidelines for

    a sustainable financing of the sector anddescribes the main features of the capacity

    building plan and M&E system to be put in

    place. The Parliament was expected to pass the

    National Policy law by the end of March 2008.

    Box 1: Uganda and Mali : Participatory Policy-making Processes

    16From Jnch-Clausen, Torkil (2004) IWRM and Water Efficiency Plans by 2005: Why, What and How? TEC Background

    Papers No. 10, Global Water Partnership, Annex 4.5, p. 43.17AMCOW (2008), Box 4, p. 42.

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    In the decentralized and participatory policy-making model, local governments and waterusers can play a much stronger role in the policy-

    making process. By doing so they can have a far

    greater impact on policy and overall sector

    governance than they could have under a

    centralized policy-making model. Two countries

    demonstrating the benefits of decentralized and

    consultation-rich policy-making are Mali, via its

    National Sanitation Policy18, and Uganda through

    its National Water Action Plan19.

    Lastly, feeding the policy-making processes

    discussed above, and the decentralized

    approach in particular, are the institutions,

    organizations and individuals recommending a

    wide variety of policies and associated

    frameworks recognized as best practices. Though some may indeed be suitable for a

    number of different countries, research indicates

    that caution should be employed by any country

    thinking of adopting them before they have been

    fully scrutinized and tailored to the local context.

    As argued by Carter20 and IWMI21, off-the-shelf

    policy proposals not tailored to local contexts but

    championed by donors and some international

    organizations should be examined critically, as

    they may be unsuitable governance tools in manycountries despite their effectiveness in others.

    Legislation is the mechanism for incorporating

    policy into national political and legal frameworks,

    setting water quality standards, protecting

    individual and communal water rights, managing

    conflict resolution and, perhaps most importantly,

    for specifying the roles and responsibilities of

    sector institutions. Given the plurality of

    institutions involved in developing and managing

    the water sector, the latter function can be a

    particularly strong determinant of effective water

    governance.

    In this regard, the World Health Organization

    (WHO) advises that the key principle that should

    18AMCOW (2008), p.42.

    19Jonch-Clausen, Torkil (2004) IWRM and Water Efficiency Plans by 2005: Why, What and How? TEC Background PapersNo. 10, Global Water Partnership, 43.20Carter, Richard C. (1998) Prospects for Sustainable Water Management Policy in Sub-Sharan Africa, in Water Resource

    Management: A Comparative Perspective, (Ed: Dhirendra K. Vajpeyi), Greenwood Publishing.21International Water Management Institute (2006)

    Water management meeting, Malawi

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    underlie the legislative structure of the drinking

    water sector should be to protect and improve

    public health through the sustainable provision ofdrinking water of adequate quality in sufficient

    quantities to all the population continuously at a price

    which is affordable22. IWRM legislation should be

    based on a stated national water policy that cuts

    across sectoral and stakeholder divisions,

    addresses water as a resource and stresses the

    societal priority for basic human needs and

    ecosystem protection23. In the case of

    transboundary water management, clear legislation

    is essential to provide clarity over institutional rolesand responsibilities across shared jurisdictions and

    be based on the principles of equitable and

    reasonable use, duty to cooperate, and dispute

    prevention, resolution and compliance24.

    As in the case of water policy formulation, expe-

    rience cautions against adopting overly rigid or off-

    the-shelf legislation. While legislation empowers

    regulators, an overly legalistic approach towards

    water quality and supply is self-defeating. The

    primary concern should be to influence

    management decision-making to reduce risks to

    public health25. Caution is also advised against

    relying on legislation to push forward water sector

    reforms, since many are not enforced despite being

    set out in law.

    In practice, despite the existence of numerous

    good examples, African water legislation often

    consists of a disparate collection of laws andregulations developed over several decades, many

    dating back to colonial times. These are often overly

    complex burdened by redundancies as well as

    gaps that handicap good governance. For

    example, remnants of colonial laws may still exist

    that define institutional roles long after named

    institutions have been replaced. Similarly,

    customary water law, in which water was seen as a

    collective right and safeguarded by the tribal group,

    may persist in spite of new laws modernizing thesector. Unfortunately, harmonizing and updating

    sector legislation can be a daunting task. Strong

    political commitment and tenacity is needed to drive

    the process forward.

    Lastly, policies and legislation may overreach

    governments capacity to implement and enforce

    them. Policies that are developed without

    sufficient finance in place for implementation

    complicate sector governance by adding to the

    existing collection of unenforceable or unrealistic

    legislative or policy initiatives. Likewise, the

    pursuit of targets or objectives set out in policy

    without sufficient attention being given to the

    processes and resources needed to attain them

    also inhibits effective sector governance.

    22World Health Organization (WHO), WHO Seminar Pack for Drinking Water Quality, WHO, Geneva,

    http://www.who.int/water_sanitation_health/dwq/S16.pdf23Ferragina, Eugenia, M. Marra and D.A.L. Quagliarotti (2002) The Role of Formal and Informal Institutions in the Water

    Sector, Plan Bleu, Sophia Antipolis.24Shultz, Anna (2007) Creating a Legal Framework for Good Transboundary Water Governance in the Zambezi and Incomati River

    Basins, Georgetown International Environmental Law Review, 2007(1), Georgetown University Law Centre, Georgetown.25WHO, WHO Seminar Pack for Drinking Water Quality

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    1.3 Regulation

    A regulatory framework is basically a set of

    rules, processes, and monitoring and

    enforcement mechanisms that ensure serviceproviders adhere to national service and quality

    standards. These also serve to level the playing

    field between user and provider in an otherwise

    monopolistic environment. A functioning

    regulatory system is thereby a central feature of

    good sector governance.

    The effectiveness and enforceability ofregulation is a function of the quality of

    governance writ large, or the set of traditions

    and institutions by which authority in a country is

    exercised26. This can be assessed using

    variables measured by instruments such as theWorld Banks World Governance Indicators:

    (1) voice and accountability, (2) political stability

    and the absence of violence, (3) government

    effectiveness, (4) regulatory quality, (5) rule of

    law, and (6) control of corruption. The rule of law

    is arguable the most important category withrespect to water sector regulation given that it

    enables enforcement of existing standards.

    Within the rule of law are the key requisites of (1)

    sound law courts, and (2) the ability to enforce

    contracts.

    Regulation is typically applied to urban bulkwater suppliers and service providers. The focus

    is on tariffs, service quality and

    consumer protection.

    Although the usual institutional

    model entails reliance on a

    single regulatory authority,water sector regulators

    encompass many oversightmechanisms including the

    authority, a ministry, an asset

    holding company or authority,

    a customer group, inde-

    pendent experts and / or theservice provider itself through

    self-regulation. Regulations are stipulated in

    legislation, contracts, by-laws, personal

    commitments and service charters. They are

    enforced by the regulator exacting penalties,

    financial incentives (both positive and negative),withdrawing licenses, political pressure and use

    of the media.

    Self-Regulation

    Regulation by

    Contract

    Regulation by

    Contract withRegulator

    Regulation by

    Agency withLicensing Regime

    Municipal Durban, RSA Zambia: 6 utilities

    Regional & National Djibouti

    Senegal, Gabon

    Uganda,

    Burkina Faso

    Niger

    Mali

    Table 2: African Water Sector Regulation Models

    26Kaufmann, D., A. Kraay, and M. Mastruzzi. (2004). Governance Matters, Washington, DC: World Bank.

    Rwanda: This card is used for the sale of water.

    The seller ticks a box when selling a jerrican.

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    Performance monitoring regulation by aspecific performance contract review com-mittee (PCRC) made up of a multidiscipli-nary membership. This approach is beingused in Uganda;

    Regulation by performance contract is com-mon between asset owner and public or pri-vate utility, as in Uganda and Burkina Faso;

    Regulation by contract is also used in ahybrid form in which an independent re-gulator provides supervision but also usescontracts;

    Licenses are provided by independent re-gulators, as in the case of Zambia, that setout the terms under which they are to pro-vide services;

    Water meter, Senegal

    In most countries, urban water services areprovided by the municipality, a public or para-public utility and by private operators that arecontracted by the municipality under perfor-mance contracts. In some cases the utility maybe regional or even national in scope, providingservices to a group of municipalities. The mostcommon ways in which service providers areregulated are listed in Table 2, above, anddescribed in further detail in the list below27:

    Self-regulation is most often used by mu-

    nicipalities, ministry departments or state-owned companies. Private entrepreneurservice providers also use a form of self-regulation through peer-to-peer regulationin a competitive environment;

    27Adapted from Trmolet, s. & C Hunt (2006) Taking Account of the Poor in Water Sector Regulation, WSP, Washington, DC, USA

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    Regulation through an asset holding au-thority such as SONEDE of Senegal thatuses a performance contract as the basisof regulation but otherwise monitors andassures good customer relations by theservice provider; and,

    Regulation by a network of stakeholders,each representing an agency facet or sub-sector.

    The regulator that is often considered mostdesirable is the independent or autonomous

    regulatory authority. The advantage this modelhas is that the regulator is independent fromthe political arena in its decision-making and isable to satisfy the three criteria stipulated forinfrastructure regulatory systems28:

    1. Legitimacy: the regulatory systemprotects consumers from the exercise ofmonopoly power, whether through highprices, low quality of service or both;

    2. Credibility: investors (e.g. private sectorutilities or capital market investors) musthave confidence that the regulatorysystem will honour its commitments (e.g.maintain agreed minimum tariff levels);and

    3. Transparency: regulation and relatedinformation are transparent.

    27Adapted from Trmolet, s. & C Hunt (2006) Taking Account of the Poor in Water Sector Regulation, WSP, Washington, DC, USA28World Bank (2006) Handbook for Evaluating Infrastructure Regulatory Systems, Washington, DC.

    Water Storage Tank, Uganda

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    Complete autonomy may be the ideal but it israrely seen in practice. There is inevitably someform of government and/or political influence.In practice, partial independence has becomeaccepted although most often with the hopeand understanding that the regulatory systemis transitioning to independence. The country,however, may lack commitment, capacity, orboth. Indeed, the full independent regulatormay be too risky a model to attempt as a firststep in regulation. Also, some aspects of theideal autonomous model regulator may be

    incompatible with the legal and cultural normsof a country. In the real world, the bestapproach is to obtain the best fit, instead ofinsisting on a universal set of best practices. This is the case in South Africa, where theDepartment of Water Affairs has pro-activelyassumed the role of sector regulator, though itlacks independence. Although it is said to be intransition, it could take several years to achievethe desired state of independence from

    government and the political arena. Onbalance, it is far better that governmentassume a regulatory role at this time than therebe no such role being played at all.

    The greatest number and most deprived ofservices are undoubtedly the poor, the MDGsprimary target. They are special in that they areleast served by formal and regulated service

    providers such as urban utilities. In 2006, forexample, it was reported that Maputos waterutility provided only 20% of the urbanpopulation through house connections and

    20% by standpipes. Another 20% bought theirwater from their neighbours, 30% boughtwater from small unregulated networkoperators and the remaining 10% collected orbought water at wells or boreholes and/or fromvendors.

    The poor are unlikely to have house

    connections, particularly if connection chargesare high or they do not have land tenure. Theycommonly pay much more per litre than thosethat enjoy piped water. Their services are oftenpoor and intermittent. In addition, they lackinfluence, voice and channels to complain tothe regulator, if regulation exists at all. The poorrepresent the most difficult to reach but need tobe if the MDGs are to be achieved. This is a key

    governance issue for the water sector.

    Reaching the poor can be facilitated throughspecial provisions in the regulatory framework.

    Water vendor, Uganda

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    Trmolet and Halpern have maderecommendations for improving servicedelivery for the poor. These are areparaphrased below29.

    Regulating access expansion: Coveragetargets may be overly restrictive by definingservice at higher levels than can be affordedwhether by the utility or the customer. Allowingfor differentiated service levels, such as throughregulated independent networks or vendors,can provide greater access and improve

    service delivery. Coverage targets might alsobe too ambitious, making it impossible forutilities to achieve even under pro-poorperformance contracts. Alternatively, usingpositive incentives rather than penalties toencourage achievement of targets (particularlyin poor areas) can be more effective, especiallywhen funds are scarce and capital financingdifficult.

    Regulating tariffs: Tariffs need to be set atappropriate levels to permit cost recovery andcontribute to investments while not generatingexcessive profits. Tariffs that are too low,although favoured by politicians, lead tofinancial insolvency and inability to extendservices, particularly in the less accessible poorareas. On the other hand, tariffs that are toohigh, as may happen in non-competitive or

    unregulated environments, provide little

    incentive to improve productivity and enablepoor management and rent-seeking.

    Subsidies, where they exist, need to be welltargeted. The rich are subsidized throughsewerage provision and piped water supply,whereas the poor who are excluded fromsewerage networks and pay higher prices perlitre of water to vendors. Subsidizedconnections such as social connections,using clear cut definitions of poor customers,are often better targeted. Also, differentiated

    service levels (regulated standpipes and privateand condominial networks) provide for targetingand a form of self regulation. When faced withlow tariffs and difficulties in extending services,there may be possibilities of providing financialincentives to the provider to specifically extendservices into the poorer areas.

    29Trmolet, S., & J. Halpern (2006) Regulation of Water and Sanitation Services, Getting Better Service to Poor People, GPOBA

    Working Series Paper 8, Washington, DC

    New handpump,

    rural Uganda

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    Regulating service quality: One way to keeptariffs at affordable levels is to provide lower-cost services through the use of servicestandards matched to local needs. Servicestandards need to be flexible, and potentialtrade-offs between service quality and priceneed to be recognized. Care also needs to betaken in applying excessively rigid waterresources regulation such as banningentrepreneurs from abstracting from wells nearpoor areas when they are providing a legitimateand improved service. Similarly, the uniform

    application of service standards can create lostopportunities of cost-savings and reaching thepoor. An example is mandatory 24 hourpressure. In some areas reduction of pressureand/or intermittent services (using roof tanks)may be appropriate if well-regulated. There areother areas of service standards, such as hoursof service, pressure, taste, physicalappearance and customer service standardsthat could be researched further to findinnovative ways by which costs could belowered without jeopardizing public health.

    Regulating alternative service providers: In

    some countries, alternative service providers

    provide services to up to 60 and 70% of urban

    populations. Unfortunately they are often

    unrecognized and are regulated against

    without understanding what they have to offer

    in extending services to the poor. Indeed,

    alternative service providers may be the only

    alternative many utilities have in extending

    services into poor areas. The first step is to geta better understanding of the situation.

    Alternative providers offer services in many

    ways: piped networks, standpipes and

    vendors, and tankers. Domestic resellers

    (neighbours) may also provide water to a

    substantial percentage of consumers.

    Bringing alternative providers into the formal

    sector would be complicated, and many

    might shy away from being formalized. Theycan be brought under the regulation umbrella

    by being flexible and recognizing the very

    different conditions and needs in improving

    Rural water supply,

    Cape Verde

    .....

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    services in low income areas. Light handed

    regulation is required in order to keep costs

    down and avoid driving those providers out of

    business. One objective should be to provide

    for a level playing field and focus on those

    aspects most important to the consumer

    (affordability, reliability and quality) while

    leaving other less important criteria to market

    forces. One approach is through licensing and

    defining areas of operation and services

    provided. Monitoring can be conducted by

    organizations closer to the service areas

    contracted to do so by the regulator, such as

    an association of alternative providers.

    Flap valves of the Massingir dam, Mozambique

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    1.4 Decentralization

    The second principle of the agreementstemming from the International Conference onWater and Environment (ICWE) (Dublin, Ireland,31 January 1992) states that:

    Water development and managementshould be based on a participatoryapproach, involving users, planners andpolicy-makers at all levels. The participatoryapproach involves raising awareness of the

    importance of water among policy-makersand the general public. It means thatdecisions are taken at the lowestappropriate level, with full public consultationand involvement of users in the planning andimplementation of water projects.

    Taking decisions at the lowest appropriate levelis referred to as the principle of subsidiarity. Inthe water sector its goal is to achieve more

    sustainable use of water resources through theclose involvement of stakeholders at the locallevel30. To achieve this, decentralization needsto be implemented in a transparent, accoun-table and participatory manner31. It also needssupportive and enabling policies, legislation,regulation and adequate capacity within localgovernments. Local stakeholders must parti-

    cipate in setting strategic directions, planningand implementation. All of this calls for sub-stantial local government capacity and strongpolitical commitment32.

    Decentralization entails the transfer of authorityfor decision-making, financing and mana-gement to representative and accountablelocal governments as well as the delegation ofcertain public functions to autonomous orsemi-autonomous bodies, such as publicutilities. Fiscal decentralization requires bothimproving local revenue generation capacity

    30Dinar, Ariel et al. (2005) Decentralization of Basin Management: A Global Analysis, World Bank Policy Working Research

    Paper 3637, Washington, USA.31Water Aid (2008) Local Millennium Development Goals Initiative: Local Government and Water and Sanitation Delivery,

    London, UK.32Rees, et al. (2008)

    Kids enjoying free flowing water

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    and devolving budgeting and expenditureauthority to the lower levels. It can be arguedthat the retention of sector financing control by

    the centre can have its advantages, such asbeing able to better respond to nationalpriorities and donors that do not normally dealwith sub-national authorities. On the otherhand, national governments tend to give lowerpriority to the water sector than localgovernments. Control over budgeting andexpenditure by local government facilitatesneeds-based and demand-responsive service

    provision33

    .

    It is recognized that if roles, responsibilities andfunctions are to be devolved to lower levels,and if these lower levels lack human resources,management capacity and financial resources,then water service provision will suffer34. Costsmay actually increase in parallel with decliningservice levels. Obviously, a balance is neededin control over sector financing and

    management that is tailored to specific andevolving realities.

    Many African countries have attempted todecentralize the water sector but few haveachieved devolution (successful transfer ofdecision-making authority). Most have de-concentrated the apex ministry in some form orother, but are reluctant to truly devolve and

    have been slow in resources and assetstransfer. Key staff may have been moved to thelocal levels, but they continue to report to thecentre, which retains power over their functionsand performance. Examples of this among the

    countries visited through the Water Gover-nance Study include Malawi, Kenya, Tunisiaand Burkina Faso. Far closer to devolution in

    the water sector are South Africa, Uganda andSenegal.

    Despite its potential benefits, however, there isalso a danger in decentralizing too quickly,before enabling policies and legislation are inplace and before local capacity and compe-tence can be strengthened. This applies inparticular to the areas of procurement, project

    and financial management. A major challengein this regard is the actual level of controlassigned to local level institutions to determinehow funds will be spent on sector developmentactivities. One indicator of central governmentsupport for decentralization is their willingnessto support and facilitate local level financialmanagement without maintaining intrusivecontrol over decision-making35.

    33WaterAid, 200834Global Water Partnership (GWP) (2008) Water Financing and Governance, GWP, Stockholm, Sweden35Dinar, et al. (2005)

    Massingir dam, Mozambique

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    political influence. While there has beenprogress in putting in place regional waterboards, the management of significant sector

    development initiatives is controlled byprogram and project management units, whichcan bypass the government structures.Community participation in decision-making isstill in its early stages.

    In assessing what would be the best balanceneeded for decentralization and preservation ofresidual capacity in central government, the

    functions at each level need to be determined. The following paragraphs provide examplesunder the principal functions of (1) planning andbudgeting, (2) project supervision andmanagement, (3) procurement, and (4)monitoring and evaluation (M&E). For each one,a suitable balance in the devolution ofresponsibilities between the centralgovernment and the decentralizedstakeholders (regions, local governments, and

    communities) is discussed under the generalprinciple of subsidiarity.

    These indicators propose a generic point ofbalance applicable in the context of countrieswhere decentralization is still rather limited. They may not be as relevant for countriesalready far along in the decentralizationprocess, such as Benin.

    Planning and budgeting. A balanced dis-tribution of functions between the centreand decentralized stakeholders could bethat central government is responsible forcoordinating dialogue on and setting na-

    tional sector policy, consolidating budge-ting, mobilizing and allocating resources,and arranging for transfers from the Minis-

    try of Finance. Local stakeholders wouldidentify needs, participate in planning (lo-cal development plans and local water andsanitation plans), channel demands andset investment priorities and formulate lo-cal rolling plans and budgets. In otherwords, the central government would bemainly responsible for facilitating the sec-tors planning and budget and setting the

    rules for distribution and use of resources,while the decentralized stakeholders wouldbe responsible for local planning, projectdesign and effective use of resources.

    Project supervision and management co-

    vers tasks linked to implementation: raising

    awareness, facilitating community capa-

    city building and dialogue with beneficia-

    ries, project planning and technical design,

    works supervision, information-education-

    communication, etc. Most of these activi-ties are carried out by service providers

    (companies, consultants, NGOs) under the

    supervision of the project team inside the

    ministries in charge of water supply and/or

    sanitation. An appropriate balance between

    the central and local level would be one inwhich these tasks are supervised and ma-

    naged by decentralized stakeholders ei-

    ther at the regional level or by decentrali-zed project teams that may be supported

    by external technical assistance. As such,

    the role of the centre would be confined toquality assurance and administrative and

    financial management support.

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    Where legal authority for water supply and/orsanitation has been devolved to localgovernment (as in South Africa, Tanzania and

    Uganda) they should have the capacity forassuming responsibility for implementation.The reality in most African countries, however,is that decentralization has reached only thedeconcentration stage, and the main flow ofresources is still channeled through sectorapex ministries. Local governments do not yethave the capacity and staff to assume this levelof responsibility (as is the case currently in

    Malawi and Mozambique). As a temporarymeasure, a reasonable balance would be thatthe local governments delegate part or totalresponsibility for supervision and managementto the region, or contract with them fortechnical assistance (as is the case in Senegal).

    Procurement: Experience in devolving res-ponsibility for procurement has emphasi-zed the essential need to first build procu-

    rement skills and capacities locally (e.g.Uganda). A generic point of balance in themeantime could be that the region bemade responsible for preparation of ten-der documents, managing the tender pro-cess and transfer responsibility for contractmanagement to local authorities. The cen-tre would be responsible for oversight, qua-lity assurance and relations with the finance

    ministry and donors or lending institutions.This balance is not ideal but is a step to-wards devolution and ahead of an entirelycentralized procurement process (as is thecase in Burkina Faso) without requiringsubstantial reforming of procurement re-

    Water supply facilities in a

    school, Rwanda

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    gulations. It is stressed, however, that eventhis partial devolution requires trained andexperienced procurement staff.

    Monitoring and evaluation is one activitywhere decentralization is critically impor-tant from both data collection and feed-back perspectives. An appropriate balancewould be that all the responsibilities rela-ted to the production of data should be asdecentralized as possible (local govern-ments, water service providers, water userassociations, project implementing teams,

    communities), while the responsibilities fordata consolidation and management (i.e.storage, maintenance, publishing) wouldbe located at regional and central levels.The increasing accessibility of online com-munications in rural areas in many Africancountries has made the centralized mana-gement of web-based databases feasible,for their contents can now be made ac-cessible to any authorized stakeholder with

    an internet connection.

    In this configuration, data collection is theresponsibility of (trained and authorized)local government, municipality or serviceprovider with community support and par-ticipation. Data collection would be at ei-ther local or regional levels and analysis,storage, feedback and disseminationwould be a central responsibility. It shouldbe recognized that the dissemination anduse of data is as important as its collec-

    tion and analysis. Management at all le-vels therefore needs to trained in its pro-per use. Likewise, the public needs to be

    given access to the full range of informa-tion concerning their systems and overallsector status, including access figures,plans, budgets and expenditure data.

    While these represent ideal models to strive for,there is no one-size-fits-all solution to makingdecentralization a reality. Each country isattempting to achieve its own balance and rate

    of change according to its stage ofdevelopment, size and administrative capa-bilities. Devolution calls for a major effort instrengthening local government administrative,financial management and technical capacities,increasing financial resources allocated to thesector, and substantial changes in attitudes

    Lake Kivu in Cyangugu, Rwanda

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    and perceptions among bureaucrats, politi-cians and the general public. Institutional roles,responsibilities and accountabilities must also

    change. While specific tools, such as localdevelopment plans, have been promoted to aiddecentralization, local governments often lackthe necessary skills and political maturity toplan their sector development andmanagement effectively, frequently resulting inunrealistic, non-implementable and inequitablelocal development plans and programs.

    Decentralization is normally driven by autho-rities outside of the water sector, such asOffices of the President or Cabinet, throughMinistries of Local Government or Finance.Sector agencies respond to and comply withdecentralization reforms and directives withvarying degrees of enthusiasm and commit-ment. Strong and consistent leadership fromthe highest levels is therefore necessary toencourage change in bureaucratic practice and

    process.

    Decentralization has developed from a relatively

    simple concept expressed as subsidiarity to a

    complex and often confusing reality that exists in

    many partially implemented forms across Africa.

    But certain areas of emphasis are clearly

    effective in advancing the process of

    decentralization to achieve sustainability of

    sector development. These include continued

    and more targeted effort in capacity building at

    all levels, especially in local governments.

    Supporting and assisting stakeholders at all

    levels in accepting, adapting to and managing

    change is often overlooked, but critical.

    To achieve greater success in decentralizingthe management of water service provision tothe lowest appropriate levels, it is recognizedthat the following criteria need to be consideredin designing sector support initiatives:

    The lowest appropriate levels for the ma-nagement of service provision have beenidentified for the range of sector services,

    considering the comparative advantagesof each level, their strengths and their ca-pabilities;

    The functional roles and responsibilities ofall sector stakeholders are clearly definedand separate from one another, so thatconfusion and conflicts resulting from over-laps, duplication and gaps are eliminated;

    Stakeholder relationships are clear, legiti-

    mized and governed by written proce-dures, agreements or contracts, so that allparties are aware of each others roles andresponsibilities and can monitor eachothers performance and results;

    Interests, incentives, mandates and res-ponsibilities are aligned among all stake-holders and there is a shared commitmentto achieving sustainable service provision;

    Regional and local level responsibilities areadequately supported by the decentrali-

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    zation of skills, capabilities, assets, humanand financial resources, and mandates;

    Capacity building is aimed at ensuring corecompetencies at all levels; and,

    Devolved procurement is accompanied bycapacity building, effective monitoring andregular audit.

    Lastly, external funding from donor agencies isshifting from project-based to programme-based, and eventually to basket funding and

    SWAp mechanisms, as local level financialmanagement competencies and accountabilityevolves. Central governments will thereforeneed to proportionately increase their fundingto the decentralized sector, and localgovernment revenue generation capacity willalso need to increase.

    A handpump in rural Senegal

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    1.5 Sector-wide

    Approaches

    The sector-wide approach (SWAp) hastraditionally fallen under the rubric of theprogramme-based approach to aid delivery:the coordinated disbursement and implemen-tation of development assistance at theprogramme rather than project level with theintention to reduce transaction costs andimprove aid effectiveness. While this may still

    be the case in many aid-dependant countries,governments are increasingly viewing SWApsas a means for coordinating and facilitatingsector development. In other words, aiddelivery may only be one part of this mecha-nism. As more countries develop strongerinstitutional capacities to manage them,SWAps are becoming increasingly recognizedas a common sense planning tool that canhelp politicians and planners better divide

    public resources over priorities36 and a way ofcoordinating a complex sector, building trustthrough dialogue among all stakeholders andstrengthening domestic ownership37. Amongstthe countries visited through the African WaterGovernance Study, Uganda provided examplesof best practices in this regard. These arecentred on annual technical performanceassessments and joint sector reviews (JSRs)led by a sector-wide stakeholder workinggroup (SSWG).

    SWAps typically encompass five mainelements: public financial management, sectorpolicy, accountability and performance

    monitoring, aid alignment and harmonization,and institutions and capacities all directlyrelevant to sector governance. They cantherefore link policy and planning objectives tobudgeting, implementation and monitoring; setup a framework for scaling up coverageimprovements over time; and generate buy-infrom ministries of finance and donors.

    Eleven African countries are now using SWApsin the water sector and many more have SWApin their health and education sectors (see Table3.2b). As noted above, key elements in movingthe sector forward as a team are being foundto be SWAps SSWGs, regular sector technicalassessment and JSRs. These can draw allsector stakeholders together, harmonizeapproaches, underpin monitoring, reduceadministration and transaction costs, provide

    an annual stakeholder review of the sector andidentify key areas for improvement on anannual basis. In doing so SWAps can provide aharmonized approach for donor support to thesector and facilitate the use of earmarkedsector budget support.

    Sector policies and strategic plans, importantelements of any SWAp, are meant to providethe enabling environment for and articulate thedirection of sector development efforts. As

    36Boesen, Nils and Dietvorst, Desiree (2007) Sector Wide Approaches: From an aid delivery to a sector development

    perspective, Reflections from the Joint Learning Programme on Sector Wide Approaches, January 2006 to April 2007: 14,

    www.train4dev.net.37 Train4Dev., www.train4dev.net

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    noted in the discussion on sector policy andlegislation in section 1.1.2, they provide aframework for overall sector governance. As

    the Joint Learning Programme (JLP) has found,cobbling together a reasonably coherentpolicy framework can be one of the first stepstowards a sector or sub-sector programmeand often a number of policies and acts existthat could begin to form the basis for a broaderapproach38. Yet this is no simple task. One ofthe largest challenges associated withadopting a SWAp in the water sector is the

    existence of numerous overlapping policiesand the multiple institutions and actors involvedin their implementation. Given the complexity ofthe sector (with sub-sectors includingagriculture, forestry, environment in addition toWSS and IWRM), it is often said that SWApsare most effectively introduced at the sub-sector level, before being expanded to includeall sub-sectors.

    The second major element of the sector-wideapproach is the coordination and management

    of a sector budget, which in light of the plurality

    of institutions and budgets involved is difficult to

    undertake in the water sector. One mechanism

    used to simplify budget decision-making and

    management processes at the macro level is the

    MTEF, a three stage activity and output-based

    fiscal planning process fed by fiscal policy

    objectives, macroeconomic projections and

    medium-term budget estimates. In sectors such

    as water, where the development of a sector

    budget may be impossible due to the fact that

    most budgets are created at the institutional

    rather than programmatic level, it may be more

    useful to return to the essence of the SWAp as a

    governance mechanism. That is, rather thantrying to create a sector budget out of thin air,

    the SWAp, in theory, encourages and

    necessitates inter-institutional dialogue and

    financial coordination in the pursuit of shared

    objectives. This is particularly important in

    relation to the management of aid contributions

    and donor coordination. Since considerable

    donor funding is now disbursed at the

    programme level, a SWAp is a means throughwhich dollars can be channelled to appropriate

    areas within the sector and aligned with national

    budgeting processes.

    This, of course, requires sufficient financial

    management capacity to be in place in the focus

    country, which is often far from the case in reality.

    Dutch experience in Benin, for example, showed

    that although considerable preparatory work has

    been done by donors to help setup a pooledfund mechanism, the formal conditions for

    SWAp have not yet been met due to the

    weakness of local public financial management

    capacity39. Similarly, even when basic budgeting

    systems are in place, donors and the

    government in question may still not agree that

    SWAps are the best approach. The Netherlands

    found that in Bangladesh, institutional

    weaknesses, lack of political commitment and

    lack of interest from donors heavily constrained

    opportunities for a water sector SWAp, and the

    Dutch ended up continuing their project-based

    39Van Woersem, Bert and Heun, Jetze, Evaluation of Sector Support and Approaches in the Water Sector, Final Report,

    Policy and Operations Department (IOB), Directorate-General for International Cooperation (DGIS), May 2008.38Boesen and Dietvorst (2007), p. 20

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    approach40. Beyond the sectors complexity, an

    additional factor behind this reluctance is thebelief amongst some practitioners that SWAps

    may increase corruption risks due to the lower

    levels of project supervision, particularly on the

    part of donors, they sometimes entail.

    These elements combine to determine in largepart the scope for capacity building and reach of

    performance monitoring also typically included in

    sector-wide approaches. A SWAps holistic

    approach to sector development can help

    prioritize capacity building needs and identify

    those willing and able to undertake them. Yet it

    can also unearth common disjunctures between

    policy objectives and a particular governments

    capacity to implement them. Similarly, the

    transparency promoted by the inclusion of all

    sector stakeholders in planning and budgeting

    processes can contribute to increased

    accountability. For example, many SWAps now

    encourage participation of user groups in the

    design and implementation process and

    facilitate stakeholder platforms to ensure their

    voices are heard41. With regards to monitoring,

    mechanisms such as Sector Technical

    Assessments and JSRs are said to helpstrengthen mutual accountability between

    governments and donors.

    40Van Woersem and Heun, (2008)41Boesen and Dietvorst, (2007)

    Mulunguzi dam, Zomba, Malawi

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    South Africans water SWAp represents agood example of the way in which suchthese mechanisms are less about donorcoordination than about guiding sectorgovernance and development. Now in itsthird phase, Masibambane, as it is kn ownlocally, has evolved from a water andsanitation policy and strategic planning toolto one that is guiding capacity buildingefforts not only whithin the WSS sub-sectorbut also water resources mangement. Thesethree phases are summarized below.Massibambane I :

    Three-year 75m pilot initiative begun in2001 focused only on supporting WSSservices in three of nice provinces. Intra-

    sector collaboration is the overriding theme. Managed by the Departement of Water Af-

    fairs but seen as a vehicle for sector de-centralization

    Water services policy (10-year strategic vi-sion and objectives for the sector) andtransfer policy (decentralization of WSS)developed.

    Masibambane II :

    Objectives : strengthen water services sec-tor ; support local government ; expandfrom three provinces to entire country.

    2004-2007, 60m Identified too much of a facus on infra-

    structure as opposed to operation andmaintenance of water services, poor qua-lity of sanitation services, the need for animproved monitoring system and a depen-dency on consulting support.

    Masibambane III :

    Objectives : promote IWRM in the watersector throughout entire country

    Box 2: South Africans Water SWAp

    ( Masibambane )1

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    1.6 Sector FinancialManagement

    Effective water sector financial management iscrucial if services are to be provided equitably,transparently and efficiently. A review of sectorfinancial management practices can be brokendown into two broad categories: sectorfinancing and financial governance (budgetingand accounting mechanisms).

    With respect to sector financing, a variety of

    fiduciary mechanisms have been used in Africa

    to finance service delivery, including inter-

    ministerial transfers, off-budget allocations (e.g.

    donor funding), cross-subsidization, taxation,user fees, and public-private partnerships42. The

    relative utility and success of these mechanisms

    depend to a large extent on the state of

    decentralization, poverty levels and affordability

    of services, external donor support, and the

    effectiveness of financial management systems.In the vast majority of African countries, userfees and debt financing are not a realistic means

    to fund service delivery alone43; government and

    donor support will be required in most cases for

    the foreseeable future.

    Budget formulation and expendituremanagement frameworks are key componentsof sector financial governance. As in other

    sectors, it is important that water sectorbudget formulation be policy sensitive, in thatpolicy objectives are reflected in sector

    allocations. Budgets should reflect sectortargets, such as the MDGs or national sectordevelopment strategies, while also ensuringthat allocations to the water sector arebalanced with those to health and education.Strong accounting and monitoring systemsshould also be in place to ensure resources areallocated equitably to ensure the diverse needsof various user grou

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