“IDENTIFYING FINANCIAL NEEDS AND CONSTRAINTS IN THE WATER SECTOR” PRESENTED DURING THE WORKSHOP ON: “INNOVATIVE WATER SECTOR FINANCING” AT SAI ROCK HOTEL,

IDENTIFYING FINANCIAL NEEDS AND CONSTRAINTS IN THE WATER SECTOR

PRESENTED DURING THE WORKSHOP ON: INNOVATIVE WATER SECTOR FINANCINGAT SAI ROCK HOTEL, MOMBASA 7TH 11TH NOVEMBER 2011

ByHellen k. Musyoki

The Kenya Water Sector Funding Needs


THE WATER SECTORThe sector has many players:According to The WSSP 2010-2015 these are actors in IWRM for long term developmentCoordination/cooperation to stop the destruction of the environment (forests, wetlands e.t.c.)Water availability/water storage developmentWater for production (irrigation and industry)Disaster risk reduction and preparedness due to climate change, e.t.cWater and Sanitation Sector Vision 2030Environment, Water and Irrigation Sector - MTEF

*The Kenya Water Sector Funding Needs


The Ministrys Objectives Include:to boost socioeconomic development by improving water availability throughout the year for domestic and productive activities;enhancing food and other crop production; and strengthening partnerships with all water stakeholders to ensure adoption of sustainable practices in the extraction and utilization of water resources.



MoWI SP 2009-2015The Plan projected that Kshs 221.49 billion will be required to finance the Plan activities between 2009 and 2012. While the source of the bulk of these funds will be from the Government, it is expected that a substantial proportion will be provided by the development partners. It is also expected that increasing amounts of Appropriations in Aid will be raised, while the Ministry will also seek to realize savings through developing innovative cost reductions and more efficient utilization of available funds.



The NWSS & NWRMSrecognizes the importance of strategies that advocate:the achievement of full cost recovery (including depreciation and financing costs) private sector participation, enhanced local private sector participation in water schemes (including those operated by communities) and the creation of pro-poor business opportunities through small-scale independent water providers *The Kenya Water Sector Funding Needs


Role of Ministry in support of Vision 2030Infrastructural Rehabilitation and Expansion to provide adequate water and sewerage services for the country to support the Economic, Social and Political Pillars.The strategic direction identified included:To provide more resources to the poor and other vulnerable sections of society;To mobilize adequate funding for investment on water infrastructure (water, sewerage and storage) in order to increase coverage; and to attain and maintain institutional financial adequacy and sustainability.



THE BUDGET PROCESS Budget Process for the County Governments(article 224)County governments to prepare and adopt their own budgets and appropriation National Government water FunctionsThe use of international waters and water resources.Protection of the environment and natural resources with a view to establishing a durable and sustainable system of development, including, in particular water protection, securing sufficient residual water, hydraulic engineering and the safety of dams; County Functions 1.Implementation of specific national government policies on natural resources and environmental conservation, including(a) soil and water conservation; and2. County public works and services, including(a) storm water management systems in built-up areas; and(b) water and sanitation services. County assemblyApprove plans and policies of county governments



Budgeting: Planning StageUnder the National Vision 2030-National plans- MTP 2008-201219 sectors - Water and sanitation sectorWater Resources ManagementWater and sanitation Services Irrigation Drainage and Land Reclamation

The ministry of water and other implementing agencies develop their strategic plans based on the national MTPExercise coordinated by the ministry of planning to coordinate the planning process



Budgeting: Formulation StageDevelopment of sector budget proposalWater Sector Working Group embark on developing sector budget proposal in line with the policies set out in the budget outlook paperMainly through consultations with line ministries and public participationAll sub units under a line ministry should participate. Development of and approval of Allocation BillsThe BPS will include draft bills indicating the proposed allocation of revenue between the levels of Government and the allocation among county governments



Budgeting: Formulation StageDevelopment of Ceiling at Accounting Unit Level. The National Treasury will develop ceilings for the accounting units based on the approved ceilings while the county Treasury will develop ceilings to the country accounting units.Preparation of Budget EstimatesThe accounting units will embark on preparation of itemized/program budgets based on the ceilings provided.Preparation of Budget EstimatesThe accounting units will embark on preparation of itemized/program budgets based on the ceilings provided.*The Kenya Water Sector Funding Needs


The Water Sector ReformsAimed at providing the basis for a long term, economically, financially, environmentally and socially sustainable impact on poverty reduction and economic growth by employing a positive pricing policy for the water regime and redefining the capacities of the water sector institutions.*The Kenya Water Sector Funding Needs


V.

Water Sector Funding SourcesRevenues and user contributions GOK Development and Recurrent budgets Development partners (DPs) Local Authorities Transfer Fund (LATF) Constituency Development Fund (CDF) The NGO and Off-budget donor support SIP 2009 *The Kenya Water Sector Funding Needs


Total Sector Funding By Source SIP 2009*The Kenya Water Sector Funding Needs

2011/122014/152026-30 (Average)%WS revenue & user contribution 10,490 15,811 34,929 *25Sanitation revenue & user investment 23,859 27,022 19,715 33Non-water sector San invest. 6,103 6,702 6,676 8WRM fees/ water user charges 413 848 2,274 1ID&LR private invest. And users 3,448 3,630 3,559 5GOK Recurrent 3,445 3,445 3,445 5GOK Development 7,884 7,884 7,884 11DP Commitments 11,225 11,225 11,225 16Estimated NGO funding 2,255 2,255 2,255 3CDF funding 2,693 2,693 2,693 4LATF funding 376 457 863 1TOTAL 72,191 81,972 95,518 100


The Ministrys budget*The Kenya Water Sector Funding Needs

Financial Year2005/6(Kshs. Million)2006/7(Kshs. Million)2007/8(Kshs. Million)2008/9(Kshs. Million)2009/10(Kshs. Million)2010/11(Kshs. Million)GOK Reccurrent2,1892,9283,5744,1713,361.63,779.9GOK Development3,9995,3184,9509,04110,730.612,016.2Donor Development2,1182,2344,3776,37512,522.320,513.5Total8,30110,48212,90119,58726,614.536,309.6


A Case of GOK funding*The Kenya Water Sector Funding Needs

Dam NameProject Cost2008/092009/102010/11 2011/12 TotalMaruba - Machkos 386 250 136 - - 386 Umaa -Kitui District 879 250 223 516 - 989 chemususu - Baringo District 5,032 200 676 857 1,380 3,113 Badassa - Marsabit District 2,472 250 124 900 1,550 2,824 Kiserian - Kajiado District 1,062 250 395 450 - 1,095


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Documents

“IDENTIFYING FINANCIAL NEEDS AND CONSTRAINTS IN THE WATER SECTOR” PRESENTED DURING THE WORKSHOP ON: “INNOVATIVE WATER SECTOR FINANCING” AT SAI ROCK HOTEL,