Effective Water Management: Role of Institutions & Economic Instruments

1. Water management institutions conditions necessary and sufficient for application of economic and finance instruments NomaNeseni

2. Group work • Please define what we mean by institutions. • In groups please identify what you consider to be institutions necessary for effective application of economic, financial and policy instruments

3. Defining institutions • Institutions are broadly defined as norms, value systems, culture that govern the way we do business. These norms or value systems are then applied using different physical organizational forms such as churches, schools, utilities, public/private entities. • Historically in Southern Africa because of the colonial history, most governments have adopted redistributive policies and institutional norms and values. • An example is that in the past water was seen as a free commodity that was god given and therefore could not be paid for. General belief was that it was plenty and bountiful. Colonial regimes denied majority safe water so political agenda has been to correct these injustices

4. Institutions • With the belief of abundance and god given we therefore did not pay for water. • The Dublin principle emphasizing finite, social, economic and environmental justice have brought a new way of thinking- in essence a new culture • Thus the culture of having to think of valuing and costing water • In WASH there is a move to put a value to water, sanitation and hygiene at the micro and macro levels

5. Different institutions and their roles in WASH • The effectiveness of economicinstruments for sustainable WASH depends on the efficiency of the way the markets function and the presence of a solid institutional platform with capacity to implement WASH objectives at the national, state and municipal level. Ultimately, the success of this type of  instruments in the countries will be intrinsically linked to the degree of institutional development attained, and to the capacity of the public apparatus to render operable policy objectives –such as environmental policy– in the long term

6. Institutions and conditions • Studies that have been carried out (Denmark, Germany) show that that institutions matter in the application of economic and financial measures. Neither market mechanisms nor market-like policy instruments operate in a vacuum. Regulatory reform do not mean leaving the market to itself. Formal and informal government institutions define and specify the conditions under which market mechanisms function. Adaptation of the current legal-institutional framework tofacilitate the operation of instruments for environmentalmanagement at the different levels of government and ensure theirharmony with other political sectors

7. Institutions and conditions • Since market-like policy instruments are usually applied within existing rules, institutions, and policy processes, the policy and administrative contexts in which they operate become important. These contexts are quite different from country to country, often more so than policymakers are aware of The national style of policymakingdepends on the constitutional framework, the infrastructure of public authorities as well as the historical and cultural heritage, which are basic institutional premises that vary tremendously even between neighboring East and Southern African countries.

8. Some insight into WASH institutions • SWAP case studies carried out by cap-net indicate that harnessing of financial resources in successful WASH programmes has needed transparent institutions that are accountable to both the donors, private sector and the public at large. • Some of the key institutions involved have been: • Ministry of Finance, ministry of water resources, Ministry of Health, Ministry of Local Government civic organizations, NGOs, CBOs, the private sector, local authorities.

9. insight • Key to some of the success stories have been the decentralization of revenue collection and implementation. • Centralized accounting to the parliament, donors and end users either through parliamentary reports or annual publications of revenue generated and outputs thereof (Uganda) • Basket funding for rural water supplies • Coordinated prioritization with key stakeholders making decisions on investment priorities

10. insights • Budgeting checklist • Is the cost of meeting WASH needs clear? • What needs to be done before embarking on sector financing? • What roles can each of the stakeholders play at this costing exercise? • What evidence is needed to present to finance so they allocate more resources to sub components of the sector? • How do you go about collecting evidence that would assist in budgeting?

11. insights • Institutions in WASH have to answer questions on: • how much money will be needed when will it be provided and how to deliver the resources. Also critical is the question of if there is absorptive capacity.

12. Accountability and coordination mechanisms in Ethiopia Government High-level forum Donors /DAG Harmonisation task force (chaired by donors and gvt) Joint Budget Support DAG High Level JBS forum (Chaired by minister of financeand donors) DAG technical working group Harmonisation secretariat (gvt) JBS coordination team (govt, donors and DAG secretariat) DAG Secretariat JBS technical team Example from Ethiopia on institutions involved in WASH financial accounting Multi level accounting to ensure transparency

13. institutions An example shows catchment councils, then we have local governments and political boundaries.

14. SADC ZAMCOM Institution

15. Fig 1: The Composition of the National Action Committee (NAC) 2009 MOESC MOF MYD&E MLGRUD MWD&M ZINWA DDF DWD NAC DPP AREX EMA MWAGCD MOLSW MNHSA MTC&ID (Chair) National Aids Council MOHCW NCU NAC Secretariat MOED

16. Examples in the region-Water supply –Namibia The Ministry of Health and Social Services (MHSS) and the Ministry of Agriculture, Water and Forestry (MAWF) are the agencies responsible for setting water quality standards for drinking water. However no statutory instrument for potable water exist at the moment, and currently NAMWATER utilizes Namibian guidelines (Ndokosho et al., 2007)

17. MLGH MEWD COUNCILS NWASCO (DTF) Regulation and financing Commercil Utilitis E.g Lusaka Water and Sewerage Company Examples in the region-Water supply- Zambia (1) Zambia Water and Wastewater Management

18. Examples in the region-Water supply –Malawi

19. Examples in the region-Water supply –Zambia (2) Innovations in Zambia in the water and sanitation Sector Kanyama Water Trust Kiosks in George Compound DTF

20. Examples in the region-Water supply –Zambia (2) Water Kiosks in George Compond-Lusaka User registration ion George compound

21. Examples in the region-Water supply –Zambia (2) Water storage tanks Source of water is boreholes with chloronation treatment Part of george compond- shallow wells are also common

22. Examples in the region-Water supply –Zambia (2) • Initially sponsored by Care International • Fully managed by the community the a Board and management Team • Individual and kiosk connections • Very successful

24. Institutions • At the end each country has to develop institutions that are contextual to meet its particular needs, • questions that need to be answered are : • Who are the main institutions ? • What is their role – is there no duplication? • What are the accounting procedures? • What about the different interests of institutions • Does the water manager who is concerned about the finite, vulnerable resource understand the Utility Manager who wants to abstract and provide water or the politician who has a constituency?

25. Questions suggestions