1. Financing Water in Tanzania: Budget Development & Analysis, MDG and Mkukuta Costing Susanne Hesselbarth DPG-Water Retreat Dar es Salaam – September 8, 2005

2. Financing Water in Tanzania Overview Budget Developments & Analysis MTEF and PER MDG and Mkukuta Costing

3. Financing Water in Tanzania Funding for the Water Sector Strong increase in the water budget over past 5 years, from Tsh. 32.4 bn (FY 00/01) Tsh. 126.4 (FY 04/05)

4. Financing Water in Tanzania Funding the Water Sector Execution of the water budget has been unsatisfactory (78% in FY 00/01, 68% in FY 01/02, 48% in FY 02/03) Individual budget components: Recurrent expenditure: 10% of total in FY 04/05 Allocations to local councils: 10% of total in FY 04/05 Total recurrent: 20% of total expenditure Sources of Funding: Donor Resources: 56% of water budget in FY 04/05 up from 51% in FY 2000/2001 Urban Focus of Development Expenditures

5. Financing Water in Tanzania MTEF: Expenditure Planning MTEF established as basic planning framework for activities in the water sector Not yet reflecting the NSGRP - Clusters Mio Tsh

6. Financing Water in Tanzania PER: Expenditure Review Since FY 2001/02, annual PER for the water sector Finding of the PER 05/06: - sector achievements in terms of policy and strategy development - increase in overall funding for the water sector in proportion to other priority sectors from 3,7% to 7,9% - lack of uniform sector wide costing

7. Financing Water in Tanzania Water Sector: Mkukuta and MDG Water MDGs widely accepted in Tanzania and reflected by NAWAPO and NWSDS Mkukuta: Increased access to clean affordable and safe water and sanitation is a core element for poverty reduction Cluster Strategies with interventions in the water sector and operational targets until 2010

8. Financing Water in Tanzania Costing Several Costings of water-related MDG targets have been carried out in previous years. Costing of the interventions for reaching the Mkutkuta operational targets are part of the Mkukuta Implementation Plan Recognized need for a comprehensive medium- and long-term MDG and MKUKUTA costing => Define the Financing Gap => Basis for Investment Programme

9. Financing Water in Tanzania MDG Costing Comparative Analysis of costings shows large variations due to different assumptions

10. Financing Water in Tanzania Mkukuta Costing Most recent costing exercise initiated in July 2005 as Part of the Implementation Plan of the Mkukuta Process led by the MoWLD Broad-based Stakeholder Workshop and Focussed Policy Dialogues Draft Costing inspired by MP methodology and informed by past costing Inclusive Approach WS, SS and WR

11. Financing Water in Tanzania Mkukuta Costing Total Cost: 3.546 Mio US$

12. Financing Water in Tanzania Mkukuta Costing

13. Financing Water in Tanzania Financing Gap

14. Financing Water in Tanzania Conclusion and Open Questions Funding Gap -> Yes Quantification -> ? Relevance -> Mkukuta Costing as basis for MTEF Next Steps-> Workshops for Discussion of Draft Costing in 09/10 - 2005 Core Issues-> Mkukuta Costing vs. Sector Investment Plan Priorization-> ?