Public Disclosure Authorized Resource Allocations and Financial Flows in the Water Sector in Zambia Zambia Public Expenditure Review Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized P Abbreviations and Acronyms Acknowledgements Disclaimers Contact Information Table of Contents A A ........................................................................................................................ A ....................................................................................................................................... D .................................................................................................................................................... C I ...................................................................................................................................... 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R W S S ....................................................................................................... W R S ........................................................................................................... C R ................................................................................................... R ........................................................................................................................................... A ............................................................................................................................................... P 1. Introduction Zambia initiated a series of reforms in the early 1990s aimed at increasing sustainable water supply and Box 1: The Seven Sector sanitation services. This was coupled with improving Principles water resources management and enhancing Separation of water resources and contributions to economic growth and development. executive functions from water The reforms are embedded within seven sector supply and sanitation principles that were articulated in the 1994 National Separation of regulatory and Water Policy (Box 1). The aim of the NWP was “to executive functions within the water promote sustainable water resources development with supply and sanitation sector a view to facilitate an equitable provision of adequate quantity and quality of water for all competing groups Devolution of authority to local of users at acceptable costs and ensuring security of authorities and private enterprises supply under varying conditions”. Achievement of full cost recovery for These principles have continued to provide the the water supply and sanitation framework for investments within the sector. They are services (capital recovery, operation reflected in the Vision 2030, which aims to provide and maintenance) through user clean and safe water supply and sanitation for all by charges in the long run 2030 (see Box 2), as well as the national development Human resources development plans. The goal for the water sector, as originally leading to effective institutions defined in the FNDP, is to “promote sustainable water Technology appropriate to local resources development and sanitation with a view to conditions facilitating an equitable provision of adequate quantity and quality for all users at acceptable costs and Increased GRZ spending priority and ensuring security of supply under varying conditions”. budget spending to the sector Box 2: Water and Sanitation Sector 2030 Vision: Clean and safe water supply and sanitation for all by 2030 Goals/Targets i. Improve access to appropriate, environmental friendly sanitation by all Zambians; ii. Attainment of 80 percent access to clean water supply to all by 2015 and 100 percent by 2030; iii. Attainment of 68 percent access to sanitation to all by 2015 and 90 percent by 2030; and iv. Fully integrated and sustainable water resource management The reform process has given rise to a revised institutional framework that acknowledges the separation of responsibilities relating to the policy, planning and development of water resources and water supply functions, with the establishment of an independent regulator embedded in the Water Supply and Sanitation Act No. 28 of 1997. Despite these achievements, efforts to increase and improve service delivery have been undermined by a perceived lack of financial resources, deteriorating infrastructure and an absence of new investments, while low levels of awareness continue to compound stakeholder involvement and ownership. P In an effort to assess the current status of the sector and support continued gains, a series of policy papers have been commissioned. These explore sectoral issues with a specific focus on the public budget, in particular the efficiency and equity of resource allocation. These are intended to inform measures that will improve the effectiveness and transparency of public resource allocation to promote economic growth and poverty reduction. The objective of this paper is to review the resource allocations and financial flows in the water sector. It is the first in a series of five policy papers that includes the following: 1. R A F F W S 2. C A O C W S L C P U A 3. E E R W S S Z 4. E A I S D R P Z 5. P P M I P E W S P MDGs………….. MDGs………….. the for needs Estimateinvestment ondecentralisationauthorities. local progress and implementation of lack achievement include the MDGs of for with consequences Challenges 87percent if willrequired of be is MDG realized the to be efforts ingoal 2015. to reachperiod, a total of 64percent of population the in 2006. thatsignificant are Indications over same the increased 3percent only sanitation tohas improved population the with access of for sanitation target formidable challengeThe a poses 1.5million over people. Report) (Table #). This represents an average increase of about 3 percent per year, equivalent to by increased almost 28 frompercent 47percent in 1996to 60 percent MDGin 2006(2008 proportionThe water. of population the with to improved access sources water in has Zambia reducesanitation and by proportion the peoplehalf of without sustainable to safedrinking access hasZambia potential the the to achieve Millennium Development onGoals (MDGs) water and variability. climatic to vulnerability hydro- increasing as services an of as well and purposes delivery productive for Thisaccess in #). sub-Saharan (Figure overall of withdrawal Africa in results lowlevels than the developing countries average and even lower than the average per capita water countries. However, the level of per capita water withdrawals in Zambia is three times lower higher thansignificantly the average for sub-Saharan Africa, theand average for developing systems for service delivery. The country has an abundance of water, with per capita availability the by improving rural areas institutional and and strengthening policy frameworks urban and supply and sustained Government’s tosanitation in water both access The isgoal to increase 2. and Performance Structure Sector 2008 Report Progress on MDG Based Source: Proportion of population with access to improved sanitation (%) (%) sanitation improved to access with population of Proportion (%) source water improved an to access with population of Proportion 47 Indicator 62 57 66 56.9 70.1 60 63.9 87.0 75.5 2015* 1996 1998 2004 2006 2.1. Overview Overview 2.1. Trend and accessto target for water and 1996-2015. sanitation, and is likely not to be met. The proportion isproportion likelyand notmet.The to be Poverty Head Count (%) 100 20 30 40 50 60 70 80 90 91 92 93 Urban 94 National 95 96 97 98 99 00 01 02 P 03 Rural 04 05 06 There is a persistent inequality between urban and rural areas. The poverty head count (Figure #) has shown an overall decline, with