Strengthening budget mechanisms for
sanitation financing in Uganda
Presentation to the WSP / ODI / Water Aid
Regional Workshop on Finance and PRSPs
2 February 2004
Mike Thomson,
Delta Partnership
Introductory note
 This presentation is based on on-going WSP funded
work in Uganda
 The assignment will last 27 days, but is not yet
complete
 The findings and recommendations contained in this
presentation are therefore still at an early draft stage
 A final report will be produced by the end of February
Background
 The Government of Uganda (GoU) has identified the
improved uptake of sanitation as one of the key
issues facing the water and sanitation sector
 Progress has been made with the Memorandum of
Understanding (MoU) between the Ministry of Health,
the Ministry of Water, Lands and Environment and
the Ministry of Education and Sport to clarify
Ministerial responsibilities with respect to sanitation
 Work is now required to establish clear budget
mechanisms for sanitation that effectively allocate
resources to all levels of government and ultimately
to the end users of services
Trends in sanitation coverage in Uganda
% with flush toilet or pit latrine - national
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
40.0%
UPHC
UDHS
UNSDS
UNHS
HIASS
2 per. Mov. Avg. (UNHS)
2 per. Mov. Avg. (HIASS)
Indicative trends in sanitation funding
UShs (million)
20,000
15,000
10,000
5,000
0
98/99
99/00
00/01
01/02
02/03
Years
Schools
Large towns
Rural and small towns
Note: These are very very rough estimates and must not be quoted. Some of the data is
based on verbal estimates of expenditure. The figures do not include salary costs of
officers involved in hygiene promotion or NGO contributions to sanitation projects.
There is a major problem in Uganda in that accurate estimates of resources used for
sanitation activities are not known. There is a pressing need to develop an integrated
sanitation budgeting mechanism.
Key issues for the budgeting study
 Clarifying what is meant by ‘sanitation’ and what is
meant by ‘improved sanitation’
 Understanding current and planned resource flows
 Assessing institutional roles and responsibilities
 Identifying constraints to, and opportunities for, the
better use of resources
 Estimating future resource needs and the scope for
non-GOU budgetary finance
 Agreeing budget categories and developing an
integrated budgetary framework
 Presenting options for resource allocation
 Addressing staff and system development needs
Indicative sources of funding for sanitation activities
Development
Partners
Programme aid
Micro
Finance
PHCCG
MoH
60 Town
Councils
SFG
MoES
WSCG
MoFPED
NGOs
Project aid
DWD
MoWLE
55
Districts
KCC
NWSC
MoLG
LGDP
MoGLSD
On-budget
Off-budget
13 Munic.
Councils
LC5
Sub
Counties
Sub
Districts
LC3
User
charges
Equalisation Grant
Private
Sector
Communities
Financial
Instns.
Community
Contributions
Example draft findings 1
Uncertain resource flows
 There is no easy way of finding out how much money has
been and is being invested in sanitation due to:
 Fragmented and sometimes unclear responsibilities
 Multiple budget sources
 ‘Lumping’ of sanitation with water budgets
 However, it is likely that overall investments have focused
more on latrines in new schools and growth centres and
less on hygiene promotion
 Poor systems at all levels of government for recording
sanitation activities in plans and budgets
 There is little evidence to suggest that resources have been
targeted at priority programmes and on activities that will
have the biggest impact on health outcomes
Example draft findings 2
Diminishing central control over the
allocation and use of resources
 A higher proportion of resources are now channelled
through local government
 There is potential conflict between fiscal
decentralisation and ‘earmarking’ of funds – districts
now have more autonomy on how to spend money –
sanitation is often not seen as a priority
 There is anecdotal evidence to suggest that the MoU
and the move away from centrally controlled project
based aid has led to less effective joined-up working at
the grass roots
Example draft findings 3
Scope and need for more innovative ways of
raising funds
 There has been a reliance on ‘on budget’ funding
sources
 The move from project based aid to programme based
aid may have caused a reduction in sanitation financing
 There is a policy of ‘no subsidy’ for household latrines,
but this does not cover sanitation / hygiene promotion
Example draft recommendation 1
Development of an overall budget framework
linked to sanitation objectives and targets
 Integrate and summarise all budgets into one
 Itemise all key functions clearly
 Assign clear responsibilities, funds and planned
results
 Use as a basis for negotiating for resources with the
Ministry of Finance
 Assign responsibility for the management of this
process to the sanitation sub-sector working group
 Cascade down to the district level
Example national budget framework for sanitation
Source of funding
Activities
MoH
DWD
NWS
C
200
100
MoES
MoG
Planned outputs
MoLG
NGOs
Donor
50
10
30
Priv.
sector
Com
munity
Total
Narrative
No.
Unit
cost
10
400
Household
s with
latrines
4000
0.10
1500
Household
s with
good
hygiene
150000
0.01
Rural household
sanitation
Construction of
latrines
Hygiene promotion
600
400
200
200
100
Urban household
sanitation
New sewer
connections
Sewer maintenance
Hygiene promotion
Schools sanitation
Construction of
latrines - new
schools
Construction of
latrines - old
schools
Hygiene promotion
Note: This is for illustration purposes only – it is simplified and figures are fictitious
Example draft recommendation 2
Better management of budgets and resource
use at local government levels
 Prepare pro-formas for District Health Inspectors to
plan and prepare budgets
 Assign clear responsibility for the preparation of an
integrated sanitation plan and budget at the subcounty level
 Develop systems for monitoring the performance of
districts based on key sanitation output and outcome
indicators
 Greater linkage of resource allocation to outputs /
performance indicators
 Review criteria for allocating overall resource levels to
local government
Example sanitation performance indicators
The following indicators are contained in the recent
PEAP revision document for water and sanitation
 Number of domestic latrines constructed
 Number of urban sewerage connections
 Pupil / latrine stance ratios in schools
 % of households with hand-washing facilities *
 % of people that have access / use hygienic latrines *
 % of people who properly dispose of children’s faeces
 % of people practicing hand-washing after defecation
* these are being reviewed for inclusion in a set of 8
water and sanitation sector ‘golden indicators’ – if
districts perform well against these, they could be
given more resources
Example draft recommendation 3
Developing innovative ways of increasing
‘off-budget’ finance
Examples might include:
 Micro-finance directed at masons for latrine construction (but is
there enough demand?)
 Micro-finance directed at groups of individuals for community
sanitation (but is this possible without sufficient income
generation?)
 Build-own-operate (BOO) contracts for latrine construction and
maintenance in urban areas
 Better district-NGO collaboration for hygiene promotion work
 Accessing ‘challenge funds’?
 Encourage private sector firms, e.g. soap manufacturers, to
support hygiene awareness campaigns
End note
 These are draft example findings and
recommendations – others will be contained in the
final report
 Further consultation is required
 For more information contact
 Meera Mehta, WSP Nairobi or
 Mike Thomson, mike@deltapartnership.com