1. 1 MDG and MKUKUTA Water Sector Costing German Development Institute in cooperation with the MoWLD and the Millennium Project Prepared by Florian Misch and Joseph Kakunda Shared with the MKUKUTA Secretariat 23rd June 2005

2. 22 OUTLINE 1.Introduction to MDG and MKUKUTA Costing 2.Review of Existing Costings in the Water Sector 3.Analytical Framework for the MDG and MKUKUTA Costing 4.Costing 5.Financing Strategy

3. 33 Introduction to MDG and MKUKUTA Costing Status of MDG and MKUKUTA Costing  Costing is part of MKUKUTA implementation – Initially water, health, education and agriculture sectors are costed  Costing will be undertaken jointly by respective sector ministry, ESRF, Millennium Project and GDI  Despite several earlier costings, there is the recognized need for a comprehensive medium- and long-term MDG and MKUKUTA costing  Time horizon for costing: – 2006-2010 for MKUKUTA – 2006-2015 for MDGs  MDG and MKUKUTA Costing has no implications for current budget process

4. 44 Introduction to MDG and MKUKUTA Costing Costing and Needs Assessments (1)  ‘realistic’ and ‘best computed’ assessment of resource needs to meet MKUKUTA Targets and MDGs  Determine the gap between resource requirements and available resources to meet MDGs and MKUKUTA targets

5. 55 Introduction to MDG and MKUKUTA Costing Costing and Needs Assessments (2)  Needs assessment is critical to develop future financing strategies (total requirements must be known)  Tanzania is well positioned to access additional (not necessarily sufficient) external resources if MKUKUTA and MDGs are costed – MKUKUTA targets and MDGs are approved by GoT and development partners – Strong governance – Supportive donor community

6. 66 Introduction to MDG and MKUKUTA Costing Guiding Principles for Costings (1)  Transparent – assumptions and methodology must be clearly visible and modifiable  Methodology adapted to Tanzanian context – Millennium Project methodology should be seen as guidance only – esp. consideration of cross-cutting as well as cross- sectoral issues and capacity constraints  Must strive for maximum disaggregated results – e.g. between urban and rural, by year  Must allow the calculation of the financing gap

7. 77 Introduction to MDG and MKUKUTA Costing Guiding Principles for Costings (2)  Costing refers to interventions needed to meet MDGs and MKUKUTA targets – Interventions are defined as investments in goods, services and infrastructure required to meet the MDGs, e.g. the construction of new water supply schemes – List of interventions based on political decisions about strategies, institutional set-up, etc.  Involvement of stakeholders – Choice of interventions – Development of methodology – Political decisions and choices influence results – Ensures that the results are broadly accepted

8. 88 Review of Existing Costings in the Water Sector  Existing studies – National Rural Water Supply and Sanitation Programme (NRWSSP) – Tanzania Country Stategy for Attaining MDGs and WSSD Targets for the Water and Sanitation Sector (MoWLD) – The Cost of Water and Sanitation MDGs for Tanzania (WaterAid) – The Millennium Project Case Study in Tanzania (preliminary only) – Country Assessment – Tanzania (MoWLD / World Bank)  Ongoing work – National Urban Water Supply and Sewerage Strategy

9. 99 Review of Existing Costings in the Water Sector CostingMoWLDNRWSSP Millennium Project WaterAid MoWLD / World Bank Costed goalsMDGs Timeframe2004/2005-2015 2003/2004- 2015 2005-20152000-2015 Geographical scope Tanzania (Dar Es Salaam partially excluded) mainlandTanzaniamainlandTanzania Rural / urbanrural and urbanruralrural and urban Areas costed Water Supply Sanitation Awareness Raising IWRM Water Supply Sanitation District Manag. Support Inst. Strenthening Water Supply Sanitation Wastewater Treatment Hygiene Education Water Supply Sanitation Water Supply

10. 10 Review of Existing Costings in the Water Sector Notes: Different definitions of rehabilitation; in prices of first year of respective costing; values may be implicit and based on own calculations; figures of WB costing include management and planning costs; NRWSSP recognizes substantial rehabilitation costs, but does not quantify them

11. 11 Review of Existing Costings in the Water Sector  MKUKUTA targets have not been considered  Scope of costing varies  Due to different results, further analysis is required – Compare and evaluate different methodologies, different assumptions and different data used – Compare interventions that are costed – Enhance analysis by interviewing stakeholders

12. 12 Analytical Framework for the MDG and MKUKUTA Costing  Costing builds upon – MDG and MKUKUTA targets – Previously identified interventions  Subdivision of the Sector – Water Resource Management – Water Supply – Sanitation

13. 13 Analytical Framework for the MDG and MKUKUTA Costing Water Resource Management Targets  MKUKUTA  Allocation of water – Domestic – Irrigation – Livestock – Industry – Energy  Pollution  Water Harvesting  Vulnerability  Disaster Management  MDGs are broader as well as more general and require interpretation (MKUKUTA can be used)

14. 14 Analytical Framework for the MDG and MKUKUTA Costing Water Supply and Sanitation Targets  MKUKUTA  Increased proportion of rural population with access to clean and safe water from 53% in 2003 to 65% 2009/10 within 30 minutes of time spent on collection of water  Increased urban population with access to clean and safe water from 73% in 2003 to 90% by 2009/10  Increased access to improved sewerage facilities from 17% in 2003 to 30% in 2010 in respective urban areas  Reduce households living in slums without adequate basic essential utilities  100% of schools to have adequate sanitary facilities by 2010  95% of people with access to basic sanitation by 2010  Reduce Cholera out-breaks by half by 2010  MDGs  Halve, by 2015, the proportion of people without sustainable access to safe drinking water and sanitation

15. 15 Analytical Framework for the MDG and MKUKUTA Costing Cross-Sectoral and Cross-Cutting Issues  Focus on gender, environment and HIV/AIDS as critical cross cutting issues – e.g. the impact of water on gender: Reduced time, health, and care-giving burdens from improved water services give women more time for productive endeavors, adult education, empowerment activities, and leisure.  Focus on sanitation as critical cross-sectoral issue – strongly related to health  Identification of additional requirements due to cross- sectoral and cross-cutting issues

16. 16 Analytical Framework for the MDG and MKUKUTA Costing Interventions  Type of interventions  Infrastructure related  Institutional strengthening  Awareness raising  Scaling-up  Identify constraints for the scaling-up of interventions  Determine pace of scale-up and  Identify Tanzanian ‘quick wins’

17. 17 Costing Refinement of methodology  Consideration of capacity constraints  Consideration of cross-sectoral and cross-cutting issues  Take into account suggestions from stakeholders  Identify critical parameters  Develop transparent model (spreadsheets)

18. 18 Costing Data and assumptions  Based on methodology, establish data requirements  Possible data sources: – MoWLD – Existing costings – Donor funded projects – International values  Fill data gaps with appropriate assumptions (e.g. for population projections, rural-urban migration etc.) as made by stakeholders

19. 19 Example: Costing the Construction of Water Supply Infrastructure Critical Parameters – Settings (timeframe and targets, geographical scope) – Demography (population, share of rural population, population growth, projected rural urban migration rate) – Coverage (current rural coverage, current urban coverage, rural target coverage, rural urban coverage) – Technology mix (current technology mix, target technology mix) – Unit Cost (rural unit cost by technology, urban unit cost by technology)

20. 20 Example: Costing the Construction of Water Supply Infrastructure  Calculation (1) Base year population X current coverage Target year population X target coverage Population using technology 1 in base year Population using technology 1 in target year

21. 21 Costing  Calculation (2) – Calculate incremental number of people using technology i: Population using technology i in target year – Population using technology i in base year – Calculate cost of technology i: Incremental number of people using technology i X per capita unit cost of technology i – Calculate total costs for rural or urban, respectively Sum of costs of all technologies – Repeat Steps for urban or rural, respectively – Total Costs Sum of urban and rural

22. 22 Costing  Presentation of Results – By year – By subsector – By type of cost – Rural / urban  Sequenced and costed intervention and investment plans as basis for a long-term strategy to attain the MDG and MKUKUTA targets

23. 23 Financing Strategy  Determine level of current financing  Government spending  Communal and private contribution  External finance  Determine the financing gap  Present options for additional resource mobilization  Future short-term financing strategies (next budget guidelines and MTEFs) can be built on resource availability and resource requirements

24. 24 Discussion Thank You!