The World Bank's flagship report, "Funding a Water-Secure Future: An Assessment of Public Spending," breaks ground by quantifying, for the first time, government expenditure in the water sector and estimating the financing gaps crucial to meeting global water needs. Highlighting the vital role of water in sustaining life and fostering prosperity, the report is set against the backdrop of rising water insecurity, with billions lacking access to safe water and sanitation, compounded by climate change.
"Annual spending on water is $164.6 billion in developing countries, which amounts to roughly 0.5 percent of their GDP. While roughly 91 percent of the annual spending on water above comes from the public sector, including public spending by the government and the SOEs; only less than 2 percent comes from the private sector. Countries need to increase their spending in the WSS subsector by US$131.4 to US$140.8 billion annually—almost tripling current expenditure levels."
"This global average, however, masks the stark heterogeneity across different regions and country groups. Sub-Saharan Africa and South Asia face the largest spending gaps. The report identifies critical weaknesses in the sector, such as low budget execution rates and inefficiencies. To bridge these gaps and attract private investment, the report emphasizes the necessity for governments to enhance spending efficiency, catalyzing long term financing, and reforming the water sector towards achieving Sustainable Development Goals for water access by 2030. To overcome all these deficits, Funding a Water-Secure Future underscores the importance of governments spending more and better. These and other measures outlined in the report will go a long way toward achieving a more water-secure future that the world needs."
Key recommendations include:
- Increase budget execution rates through enhancing the sector’s absorptive capacity by reforming public investment management and public financial management.
- Raise the productivity of public spending in the sector by improving efficiency at various levels.
- Reduce the inefficiencies of water service providers by prioritizing cost-effective utility operations and improving investment planning for infrastructure development and technology upgrades.
- Minimize disparities in access to water services by targeting investments and water subsidies to poorer and rural communities.
- Catalyze the flow of long-term private and international finance by using risk-pooling arrangements, public sector guarantees, and catalytic capital to invest more, and more often, in water resources.
- Implement reforms including improving cost recovery and demand management; developing government capacity and human capital; and strengthening data access, transparency, and communications.