Political priorities on spending public money exist in all countries. With fewer financial resources to distribute, the pressure on available funds is increasingly high and funding for sanitation usually follows water, education, and other health interventions. This is perhaps due to the fact that within the sanitation sector, it is often difficult to decide where best to allocate funds – in rural or urban areas, on sanitation infrastructure or hygiene promotion.
The GLAAS Report 2010 analyses the prioritization of sanitation and water interventions by comparing the funds governments and donors have allocated for each in overall budgets: 35 of 37 countries reported that financial flows are insufficient to achieve the MDG target for sanitation. To achieve the MDG targets, then, funds not only need to be increased, but also allocated in more efficient ways.
In the past, conventional public finance of sanitation has generally been supply-driven and focused on increased coverage through subsidies for private and public infrastructure. However, this practice has in many cases led to expensive, inappropriate facilities, which remain unused by the intended clients. Most recent developments show that more sustainable achievements are made through approaches where sanitation promotion and marketing are funded rather than supply-driven subsidies for sanitation infrastructure.
This ‘smart’ financing also looks more closely at the integration of household and community resources through full or partial cost sharing for toilets, user fees for public toilets, sanitation-related taxes or surcharges, and microfinance.
The recently launched WSSCC publication Public Funding for Sanitation: The Many Faces of Sanitation Subsidies addresses the above-mentioned issues and clarifies common arguments and issues related to sanitation financing.
WSSCC's position in sanitation financing is reflected in the funding policy of the Global Sanitation Fund (GSF), which focuses on WASH software promotion over funding for hardware.