Funding A Water Secure Future

The World Bank's latest report, "Funding a Water-Secure Future: An Assessment of Public Spending," breaks ground by quantifying governments' expenditure on water and the financing gaps crucial to meeting global needs. Highlighting the vital role of water in sustaining life and fostering prosperity, the report identifies rising water insecurity, with billions lacking access to safe water and sanitation, compounded by climate change. Despite an annual spending of $164.6 billion in developing countries, governments allocate only 1.2% of their budgets to water, lagging behind other sectors. Sub-Saharan Africa and South Asia face the largest spending gaps, indicating 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 and prioritize water allocation, crucial steps 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 better so they can spend more on water. These measures will strengthen the sector and attract more private finance and international capital to accelerate progress. 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.