Water supply and sanitation in Uganda


Water supply and sanitation in Uganda

Since 2000, NWSC has worked under performance contracts with the national government, each covering three years. The contracts contain precise performance indicators, which the NWSC is expected to achieve. For example, the 2003-2006 contract required NWSC to reduce NRW from 39% in 2003 to 36% in 2006. Simultaneously, inactive connections should be reduced from 21% to 13%. In order to encourage management to achieve the targets, an incentive element of 25% of the annual basic salary depended on the fulfillment of the contract. Each year the NWSC board decides the appropriate bonus rate that the NWSC management receives. [cite journal
last = The Republic of Uganda
first =
authorlink = Uganda
coauthors =
title = Performance contract between the government of the Republic of Uganda and National Water and Sewerage Corporation
journal =
volume =
issue =
pages =
publisher =
location =
date = October 2003
url = http://www.nwsc.co.ug/uploads/PDdownloads/Performance%20Contract%20btn%20GoU%20and%20NWSC.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-07
, p. 4; 10; 23
]

Results and analysis The improvement of the utility concerning access and operational performance is indisputable. Some of the achievements are:

Interestingly, the utility has been turned around without a tariff increase, except for inflation adjustments and a 10% increase to compensate the utility for a reduction in connection fees. Instead, the reform focused on increasing the number of connections, an effective computerized billing system, improving customer relations and communications, as well as better incentives and training for staff. [cite journal
last = USAID
first =
authorlink =
coauthors = ARD Inc.
title = Case Studies of Bankable Water and Sewerage Utilities
journal =
volume =
issue =
pages =
publisher =
location =
date = 2005
url = http://waterwiki.net/images/f/f1/USAID_CaseStudy_Bankable_Utilities_Aug05_Cases_Compendium.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-07-04
, p. 16 and cite journal
last = Dr. Muhairwe
first = William Tsimwa
authorlink =
coauthors =
title = Improving performance through internal reforms by the public sector. A case of national water and sewerage corporation, Uganda. Presented for: Water Week, World Bank
journal =
volume =
issue =
pages =
publisher =
location =
date = March 2003
url = http://worldbank.org/html/fpd/water/waterweek2003/Presentations/Session%208%20-%20Modes%20of%20Engagement%20of%20public%20sector%20in%20Urban%20WSS/WilliamMuhairwe-Paper.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-07
, p. 14-15 andcite journal
last = Jammal
first = Yahya
authorlink =
coauthors = Jones, Leroy
title = Impact of privatization in Africa: Uganda Water. One of Eight Papers from a Project Entitled: Assessing the Impact of Privatization in Africa .
journal =
volume =
issue =
pages =
publisher =
location =
date = October 2006
url = http://siteresources.worldbank.org/EXTNTFPSI/Resources/UgandaWater.pdf?resourceurlname=UgandaWater.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-07
p. 14 fo 1995 NRW value.
]

One factor that partially explains the drastically improved collection rates is a new government policy of paying the unpaid water bills of public entities, beginning in 1999. The significant increase in new connections is partially explained by a drastic reduction of connection charges, also in 1999, from 400,000 Shillings (US$ 274) to 25,000 Shillings (US$ 17).cite journal
last = Jammal
first = Yahya
authorlink =
coauthors = Jones, Leroy
title = Impact of privatization in Africa: Uganda Water. One of Eight Papers from a Project Entitled: Assessing the Impact of Privatization in Africa.
journal =
volume =
issue =
pages =
publisher =
location =
date = October 2006
url = http://siteresources.worldbank.org/EXTNTFPSI/Resources/UgandaWater.pdf?resourceurlname=UgandaWater.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-07
p. 1 and p. 20. The May 1999 exchange rate of 1460 USh per USD has been used.] Flexibility in technical requirements (waiving of land titlerequirements, easing construction standards, post-processing of new connectionforms) was also key to increasing water service coverage in the urban poor communities. [ [http://www.nwsc.co.ug/uploads/PDdownloads/Annual%20Report%202006%20to%202007.pdf NWSC Annual Report 2006-2007] , p. 27 ] Schwartz points out that the success of NWSC since 1998 was favored by a high level of support by international donors and lending agencies as well as national ministries, [cite journal
last = UN-Water
first =
authorlink =
coauthors = World Water Assessment Programme
title = National Water Development Report: Uganda. Prepared for 2nd UN World Water Development Report "Water, a shared responsibility".
journal =
volume =
issue =
pages =
publisher =
location =
date = 2006
url = http://unesdoc.unesco.org/images/0014/001467/146760e.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-05
, p. 93
] the leadership of top management, a highly professional staff, and strong institutional cultures. [cite journal
last = Schwartz
first = Klaas
authorlink =
coauthors =
title = The New Public Management: The future for reforms in the African water supply and sanitation sector?
journal = Utilities Policy
volume = 16
issue = 1
pages = 49-58
publisher =
location =
date = 2008
url =
doi = 10.1016/j.jup.2007.07.001
issn =
isbn =
id =
accessdate =
]

NWSC has received ISO 9001:2000 certification for nine of its service areas, including Kampala, by June 2007. The company also provides training to utilities in Tanzania, Zambia and soon in Nigeria. Building on its success, NWSC has set itself the vision "to be one of the leading water utilities in the world". [ [http://www.nwsc.co.ug/uploads/PDdownloads/Annual%20Report%202006%20to%202007.pdf NWSC Annual Report 2006-2007] ]

Legal framework

The current institutional sector framework is based on several policy reforms in the water sector since the mid-1990s. Water supply and sanitation are recognized as key issues under the national Poverty Eradication Action Plan (PEAP), prepared first in 1997 and revised in 2001 and 2004. The PEAP is the key government document for fighting poverty through rapid economic development and social transformation.cite journal
last = Republic of Uganda, Ministry of Finance, Planning and Economic Development
first =
authorlink =
coauthors =
title = Poverty Eradication Action Plan (2004/5-2007/8)
journal =
volume =
issue =
pages =
publisher =
location =
date =
url = http://www.finance.go.ug/docs/PEAP%202005%20Apr.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-07
, p. 182-188]

The 1995 Constitution of the Republic of Uganda instructs the Ugandan State to take all practical measures to promote a good water management system at all levels and defines clean and safe water as one of its 29 objectives.cite journal
last = Republic of Uganda
first =
authorlink =
coauthors =
title = The Constitution of the Republic of Uganda
journal =
volume =
issue =
pages =
publisher =
location =
date = 1995
url = http://www.parliament.go.ug/images/constitution_1995.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-06
, p. 2; 23] The current legislative water sector framework was introduced with the 1995 Water Statute, which has the following objectives: [cite journal
last = Republic of Uganda
first =
authorlink =
coauthors =
title = Uganda: Water Statute, 1995 (Statute No. 9 of 1995)
journal = Uganda Gazette
volume = 56
issue =
pages =
publisher =
location =
date = 1995-12-14
url = http://faolex.fao.org/docs/pdf/uga5251.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-06
]
*Promotion of rational water use and management
*Promotion of the provision of a clean, safe, and sufficient domestic water supply to all people
*Promotion of the orderly development of water and its use for other purposes, such as irrigation and industrial use, among others, in ways that minimize harmful effects to the environment
*Pollution control and promotion of safe storage, treatment, discharge, and disposal of waste that may cause water pollution or other threats to the environment and human health.

In accordance with the national constitution, chapter eleven, the Local Government Act of 1997 provides for the decentralization of services, including the operation and maintenance of water facilities for local governments in liaison with the ministries responsible for the sector. [cite journal
last = Republic of Uganda
first =
authorlink =
coauthors =
title = Local Government Act
journal =
volume =
issue =
pages =
publisher =
location =
date = 1997
url =
doi =
issn =
isbn =
id =
accessdate =
]

Finally, the National Water Policy (NWP), adopted in 1999, promotes the principles of Integrated Water Resources Management, a comprehensive approach to water supply. In addition, the NWP recognizes the economic value of water, promotes the participation of all stakeholders, including women and the poor, in all stages of water supply and sanitation, and confirms the right of all Ugandans to safe water. [cite journal
last = Republic of Uganda, Directorate of Water Development
first =
authorlink =
coauthors =
title = National Water Policy
journal =
volume =
issue =
pages =
publisher =
location =
date = 1999
url =
doi =
issn =
isbn =
id =
accessdate =
]

Responsibility for water supply and sanitation

Policy and regulation

The lead agency for formulating national water and sanitation policies, coordinating and regulating the sector is the Ministry of Water and Environment (MWE). [ In some sources, mostly dated before 2006, the ministry is called the Ministry of Water, Lands and Environment (MWLE). It appears to have changed its name around that time.] The Directorate of Water Development (DWD) under the MWE acts as the executive arm and provides support to local governments and other service providers. [cite journal
last = African Development Fund
first =
authorlink = African_Development_Fund#Group_Entities
coauthors =
title = Appraisal Report. Rural water supply and sanitation program, Uganda
journal =
volume =
issue =
pages =
publisher =
location =
date = March 2005
url = http://www.afdb.org/pls/portal/url/ITEM/084B449D5E817267E040C00A0C3D4328
doi =
issn =
isbn =
id =
accessdate = 2008-05-06
, p. 3
]

Economic and performance regulation. There is no independent economic regulatory body for water supply. Tariffs are proposed by NWSC and need to be approved by MWE. NWSC is regulated by contract according to a performance contract with the national government. The Performance Review Committee (PRC) under the MWE reviews the performance of NWSC according to the contract. However, the PRC is partly financed by the NWSC, which may hinder the full independence of the committee. [cite journal
last = Mugisha
first = Silver
authorlink =
coauthors = Berg, Sanford V.
title = Struggling State-Owned Enterprises: NWSC's Turnaround in Uganda
journal =
volume =
issue =
pages =
publisher =
location =
date = November 2006
url = http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1088139_code459683.pdf?abstractid=1088139&mirid=1
doi =
issn =
isbn =
id =
accessdate = 2008-05-07
, p. 22
]

NWSC regulates its local branch offices through internal contracts that are monitored by its internal monitoring and regulation department.

Environmental regulation. Environmental regulation is carried out by the DWD and the National Environment Management Authority.

Drinking water quality regulation. According to Schwartz, the Directorate of Water Development (DWD) is expected to monitor the quality of drinking water provided by NWRC. However, in practice NWRC monitors its drinking water quality internally without any complementary external monitoring. [cite journal
last = Schwartz
first = Klaas
authorlink =
coauthors =
title = Managing Public Water Utilities. An assessment of bureaucratic and New Public Management models in the water supply and sanitation sectors in low- and middle-income countries.
journal =
volume =
issue =
pages =
publisher = UNESCO-IHE Institute for Water Education
location =
date = 2006
url = http://publishing.eur.nl/ir/repub/asset/8052/PhD%20Klaas%20Schwartz.pdf
doi =
issn =
isbn = 13: 978-90-73445-15-4
id =
accessdate = 2008-05-08
, p. 133
]

NWSC's internal Quality Control Department examines whether the supplied water complies with the national standards for drinking water, which in turn follow the World Health Organization guidelines. There are a central laboratory in Kampala and satellite laboratories in the other NWSC operation areas. At several sampling points, water is controlled for pH, color, turbidity, residue chlorine, and E-coli. The results are available at the official NWSC website and mostly comply with the national standards. [cite web
last = National Water and Sewerage Corporation
first =
authorlink =
coauthors =
title = National Water & Sewerage Corporation - Home Page
work =
publisher =
date =
url = http://www.nwsc.co.ug/modules/pagewrap/
format =
doi =
accessdate = 2008-05-08
, Tab -> "Water Quality"
]

Where NWSC does not provide the service, districts are responsible for water quality monitoring. According to the MWE, this is done insufficiently and data are scarce.

ervice provision

Cities and towns. In 22 cities and large towns water supply and sewerage - where it exists - is provided by the National Water and Sewerage Corporation (NWSC), a public utility working on a commercial basis. In 2007 it provided services to 1.8 million people out of 2.5 million in Kampala, Jinja/Lugazi, Entebbe, Tororo, Mbale, Lira, Gulu, Masaka, Mbarara, Kabale, Kasese and Fort Portal, Bushenyi/Ishaka, Soroti Arua, Masindi, Malaba, Iganga, Hoima, and Mubende. The smallest town served, Hoima, has a population of only 9,000. The NWSC operates under the MWE. [cite web
last = National Water & Sewerage Corporation - Home Page
first =
authorlink =
coauthors =
title = National Water & Sewerage Corporation - Home Page
work =
publisher =
date =
url = http://www.nwsc.co.ug/modules/pagewrap/
format =
doi =
accessdate = 2008-05-06
]

Small towns. In small towns, mostly with a population of between than 5,000 and about 30,000, facilities are owned and managed by local governments, supported by the MWE. Many have created Water Authorities, which contract out services to local private operators.

In rural areas, local governments at district levels are responsible for the adequate operation and maintenance of water systems. Responsibility for sanitation promotion and hygiene education in communities and schools is vested in the MWE, the Ministry of Health, and the Ministry of Education and Sports.cite journal
last = Ministry of Water and Environment (Uganda)
first =
authorlink =
coauthors =
title = Water and Sanitation Sector Performance Report 2006
journal =
volume =
issue =
pages =
publisher =
location =
date = September 2006
url = http://www.danidadevforum.um.dk/NR/rdonlyres/94B047D5-F8C9-46C9-B56D-7A43367ED141/0/WSSperformanceReportUganda.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-13
, p. 7]

Private sector participation

Cities and large towns Besides its performance contracts with the national government and its internal contracts beginning in 2000, NWSC also had two consecutive service contracts for billing and collection (called "management contracts") with foreign companies in Kampala. The first management contract between NWSC and the German company H.P. Gauff Ingenieure started in July 1998 and ended in June 2001. The second contract with the French company OSUL (Ondeo Services Uganda Limited) ran from February 2002 and February 2004. Under both contracts, NWSC's financial and operational indicators continued to improve. However, a study by the Boston Institute for Developingt Economies concludes that the improvements were not due to private sector participation, but to overall reforms of NWSC initiated before the service contracts were signed and continued while they were being implemented.cite journal
last = Jammal
first = Yahya
authorlink =
coauthors = Jones, Leroy
title = Impact of privatization in Africa: Uganda Water. One of Eight Papers from a Project Entitled: Assessing the Impact of Privatization in Africa .
journal =
volume =
issue =
pages =
publisher =
location =
date = October 2006
url = http://siteresources.worldbank.org/EXTNTFPSI/Resources/UgandaWater.pdf?resourceurlname=UgandaWater.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-07
]

Small towns UN-Water indicates management contracts with private operators in 50 small Ugandan towns. Since the sector still receives subsidies from the national government, the service improved notably without being accompanied by major tariff increases. [cite journal
last = UN-Water
first =
authorlink =
coauthors = World Water Assessment Programme
title = National Water Development Report: Uganda. Prepared for 2nd UN World Water Development Report "Water, a shared responsibility".
journal =
volume =
issue =
pages =
publisher =
location =
date = 2006
url = http://unesdoc.unesco.org/images/0014/001467/146760e.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-05
, p. 92
]

In rural areas, mostly local private operators focus on construction, supply of parts and materials, capacity building, and consultancy. Danert et al. concluded in 2003 that private participation in the rural Ugandan water sector still faces major challenges such as inexperienced local governments and private operators, limited public spending, and poor user participation. However, he saw an improvement in the performance of private sector participation compared to three years before, which may give rise to optimism. [cite journal
last = Danert
first = Kerstin
authorlink =
coauthors = Carter, Richard C.; Rwamwanja, Ronnie; Ssebalu, Jamil; Carr, Graham; Kane, David
title = The private sector in rural water and sanitation services in Uganda: understanding the context and developing support strategies
journal = Journal of International Development
volume = 15
issue = 8
pages = 1099-1114
publisher =
location =
date = 2003-11-06
url =
doi = 10.1002/jid.1053
issn =
isbn =
id =
accessdate =
]

Other functions

Besides the MWE, several other national ministries play a role in the sector. The Ministry of Finance, Planning and Economic Development coordinates funding and donor support. The Ministry of Local Government is expected to support decentralized government systems, which manage their own water facilities. The Ministry of Gender, Labour and Social Development is responsible for the promotion of gender-responsive development and community mobilization. The Ministry of Agriculture, Animal Industries and Fisheries oversees water use for irrigation.

Concerning sanitation, the Environmental Health Division (EHD) under the Ministry of Health is in charge of an integrated sanitation strategy for the country, and the Ministry of Education and Sports is responsible for health, sanitation, and hygiene in schools. All the abovementioned ministries, together with the Ministry of Public Service, development partners, and civil society, form the Water and Sanitation Sector Working Group, which meets quarterly. [cite journal
last = African Development Fund
first =
authorlink = African_Development_Fund#Group_Entities
coauthors =
title = Appraisal Report. Rural water supply and sanitation program, Uganda
journal =
volume =
issue =
pages =
publisher =
location =
date = March 2005
url = http://www.afdb.org/pls/portal/url/ITEM/084B449D5E817267E040C00A0C3D4328
doi =
issn =
isbn =
id =
accessdate = 2008-05-06
, p. 3-4
]

Economic efficiency

As described above, the NWSC has substantially improved its operational and financial performance since it was reformed. Indicators show that economic efficiency is also improving in small towns, where the systems are owned by local governments. However, it is difficult to find data on the issue in rural areas.

Non-revenue water

According to the NWSC, the average share of NRW in all operating areas of NWSC was 32.5% as of June 2007. While in Kampala it was 38.5%, in the other 21 towns it averaged 18.2%. The NWSC explains the high share of NRW in Kampala with the poor condition of the existing infrastructure. To improve the network and thus reduce NRW in Kampala, the Kampala Network Rehabilitation Project was launched in 2002. Although NRW increased from fiscal years 2005/2006 to 2006/2007, in the longer term a remarkable reduction took place. In 2002-2003, the share was 44.5% in Kampala and 26.7% in the remaining areas. [cite journal
last = National Water and Sewerage Corporation
first =
authorlink =
coauthors =
title = Annual report 2006 to 2007
journal =
volume =
issue =
pages =
publisher =
location =
date = 2007
url = http://www.nwsc.co.ug/uploads/PDdownloads/Annual%20Report%202006%20to%202007.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-08
, p. 3; 24-25
] Concerning small towns, the MWE in its 2006 sector performance report indicates that NRW decreased slightly from 24.4% in June 2004 to 22% in June 2006.

There is no agreement on appropriate levels of NRW among professionals. However, Tynan and Kingdom propose a best practice target of 23% in developing countries. The study uses data from 246 water utilities, half of which are in 44 developing countries. The utilities range from small ones serving fewer than 125,000 people to large ones serving more than 500,000. All regions and within coutries all income levels are included. In each of the five categories (NRW, labor productivity, service coverage, water prices, and connection costs and continuity of service), at least 30 utilities from developing countries and 30 from developed countries are included. The best practice targets for developing countries are based on the performance of the top 25 of developing country utilities. The study uses data from the World Bank's Water and Sanitation Utilities database and the Asian Development Bank. cite journal
last = Tynan
first = Nicola
authorlink =
coauthors = Kingdom, Bill
title = A Water Scorecard. Setting Performance Targets for Water Utilities
journal = Public Policy Journal
volume =
issue = 242
pages =
publisher = The World Bank Group
location =
date = 2002-04-01
url = http://rru.worldbank.org/documents/publicpolicyjournal/242Tynan-040802.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-19
] Except for Kampala, NRW in large and small Ugandan towns, according to the available figures, complies with this target.

Labor productivity

In 1998, on average 36 NWSC employees worked per 1,000 connections. [cite journal
last = Mughisha
first = Silver
authorlink =
coauthors = Berg, Sanford V.; Dr. Muhairwe, William T.
title = Using Internal Incentive Contracts to Improve Water Utility Performance: The Case of Uganda’s NWSC
journal = Water Policy
volume = 9
issue = 3
pages = 271-284
publisher =
location =
date = 2007
url =
doi = 10.2166/wp.2007.010
issn =
isbn =
id =
accessdate = 2008-05-08
, p. 6
] This figure has been significantly reduced to 11 employees in 2003 and 7 in 2007. [cite journal
last = National Water and Sewerage Corporation
first =
authorlink =
coauthors =
title = Annual report 2006 to 2007
journal =
volume =
issue =
pages =
publisher =
location =
date = 2007
url = http://www.nwsc.co.ug/uploads/PDdownloads/Annual%20Report%202006%20to%202007.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-08
, p. 33
] The MWE indicates an improvement of labor productivity in small towns from 47 employees per 1,000 connections in June 2004 to 28 in June 2006. Tynan and Kingdom propose a best practice target of 5 employees per 1,000 connections in developing countries.

Financial aspects

Tariffs and cost recovery

Although Uganda's official policy is to promote tariffs that cover all costs, the NWSC tariff actually only covers operation and maintenance costs. The second performance contract between the Government of Uganda and NWSC provides for a tariff policy which in the long term covers operation, maintenance, and a part of the future investments. [cite journal
last = The Republic of Uganda
first =
authorlink = Uganda
coauthors =
title = Performance contract between the Government of the Republic of Uganda and National Water and Sewerage Corporation
journal =
volume =
issue =
pages =
publisher =
location =
date = October 2003
url = http://www.nwsc.co.ug/uploads/PDdownloads/Performance%20Contract%20btn%20GoU%20and%20NWSC.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-07
, p. 21
] Although the current tariff structure does recover operation and maintenance costs, the tariffs are not high enough to finance system expansion, leaving system improvement and extension investments to the national government and international donors. According to UN-Water, full cost recovery tariffs including investments would require a significant rise of tariffs. [cite journal
last = UN-Water
first =
authorlink =
coauthors = World Water Assessment Programme
title = National Water Development Report: Uganda. Prepared for 2nd UN World Water Development Report "Water, a shared responsibility".
journal =
volume =
issue =
pages =
publisher =
location =
date = 2006
url = http://unesdoc.unesco.org/images/0014/001467/146760e.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-05
, p. 82-83
] Dr. Muhairwe in a presentation held in 2006 concludes that full cost recovery in least developed countries is a myth. [cite journal
last = Dr. Muhairwe
first = William T.
authorlink =
coauthors =
title = Cost Recovery Mechanisms: The Success of the NWSC-Uganda and its Relevancy for Other African Countries. Presentation at the Experts’ meeting on "Access to Drinking Water and Sanitation in Africa", Paris.
journal =
volume =
issue =
pages =
publisher =
location = Paris
date = 2006-12-01
url = http://www.oecd.org/dataoecd/49/57/37787219.ppt
doi =
issn =
isbn =
id =
accessdate = 2008-05-08
] According to him, tariffs would have to increase by 90% to provide full cost recovery. [Citation
last = Mbatau wa Ngai
first =
author-link =
last2 =
first2 =
author2-link =
title = NWSC turns to bond market for financing
newspaper = Daily Monitor
pages =
year = 2008
date = 02-26
url = http://www.monitor.co.ug/artman/publish/business_power/NWSC_turns_to_bond_market_for_financing.shtml
accessdate = 2008-05-08
]

In fiscal year 2006-2007, the NWSC tariff for domestic use was US$0.64 per m³. Taken from a public standpipe, the tariff was US$0.42 per m³ or less than US$0.01 per jerrycan. The average commercial tariff was US$1.00 per m³.1 Uganda Shilling = US$0.0006061 (2007-06-30); source: oanda.com] For commercial users, a rising block tariff structure is used. If a customer is connected to the sewerage system, an additional charge of 75-100% must be paid. Although water is cheapest at standpipes, UN-Water reports that in this case users usually have to pay the costs of operating a stand tap and thus in the end pay more. [cite journal
last = UN-Water
first =
authorlink =
coauthors = World Water Assessment Programme
title = National Water Development Report: Uganda. Prepared for 2nd UN World Water Development Report "Water, a shared responsibility".
journal =
volume =
issue =
pages =
publisher =
location =
date = 2006
url = http://unesdoc.unesco.org/images/0014/001467/146760e.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-05
, p. 83
] A cross subsidy arrangement enables NWSC to keep in operation systems which do not even cover operation and maintenance costs.

Investment and financing

Current investments. According to the MWE, the total budget for Ugandan water supply and sanitation was 149 billion Uganda Shilling or US$90 million in fiscal year 2006-2007, of which US$73 million were actually spent. This corresponds to US$2.37 per inhabitant. The NWSC received a budget of US$56 million. Out of the remaining funding of US$34 million, 54% was allocated to rural water and 29% to urban water. In addition, NGOs and Community Based Organizations (CBOs) reported investments of US$5 million in 2006, and NGO and CBO members of the WASH cluster, who provide emergency water supply and sanitation in Northern Uganda, reported investments of US$15 million from January 2005 to August 2006. Total sector investments in 2006 thus can be estimated at roughly US$85 million.

Investment needs. Since water supply and sanitation are recognized as key elements of the PEAP, the plan provides for long-term investments in the sector with priority to rural areas. The document indicates that in order to reach 95% coverage by 2015, from 2001 to 2015 investments of about US$956 million and US$417 million are needed for rural and urban areas, respectively, corresponding to a total of about US$100 million per year or only US$15 million more than current investment levels.

Financing. According to UN-Water, around the year 2000 donor financing accounted for up to 75% of the total sector funding. The sector benefited significantly from the Poverty Action Fund (PAF) under the framework of the PEAP.cite journal
last = UN-Water
first =
authorlink =
coauthors = World Water Assessment Programme
title = National Water Development Report: Uganda. Prepared for 2nd UN World Water Development Report "Water, a shared responsibility".
journal =
volume =
issue =
pages =
publisher =
location =
date = 2006
url = http://unesdoc.unesco.org/images/0014/001467/146760e.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-05
, p. 26-28] Uganda became the first country wthat qualified for debt relief under the Heavily Indebted Poor Countries initiative. Debt relief contributes about US$80 million per year to the PAF. [cite journal
last = WaterAid
first =
authorlink = WaterAid
coauthors =
title = National water sector assessment, Uganda
journal =
volume =
issue =
pages =
publisher =
location =
date = May 2005
url = http://www.wateraid.org/other/startdownload.asp?DocumentID=87&mode=plugin
doi =
issn =
isbn =
id =
accessdate = 2008-05-07
, p. 1
]

Financing conditions differ between urban and rural areas. In the case of the NWSC, concessional debt contracted from international financial institutions had been passed on by the government to the utility in the form of debt. However, in February 2008 the government agreed to convert the NWSC's 153.5 billion Shilling debt into equity. This was done with the objective to increase the NWSC's ability to borrow from the local capital market. A week later the NWSC announced that it intends to borrow 30 billion Uganda Shilling on the bond market to finance, on a fast-track basis, the construction of water intakes and offshore pipelines for the towns of Kampala, Jinja, and Entebbe in order to mitigate the impact of Lake Victoria's receding levels on water supply. The NWSC expects to be able to borrow in local currency at lower interest rates and for longer maturities compared to borrowing from commercial banks. The World Bank is assisting the NWSC in structuring the bond issue. [Citation
last = Mbatau wa Ngai
first =
author-link =
last2 =
first2 =
author2-link =
title = NWSC turns to bond market for financing
newspaper = Daily Monitor
pages =
year = 2008
date = 02-26
url = http://www.monitor.co.ug/artman/publish/business_power/NWSC_turns_to_bond_market_for_financing.shtml
accessdate = 2008-05-08
]

Concerning rural areas, investments are financed primarily by grants. According to the 2000-2015 Rural Water and Sanitation Strategy and Investment Plan, Uganda's principal investment document for rural water supply and sanitation, financing for the rural sector will continue to be provided by external donors, the national government, and NGOs. [cite journal
last =
first =
authorlink =
coauthors =
title = Rural Water and Sanitation Strategy and Investment Plan 2000-2015.
journal =
volume =
issue =
pages =
publisher =
location =
date =
url = http://siteresources.worldbank.org/INTPRS1/Resources/383606-1201883571938/Uganda_Rural_WSS.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-08
, p. 29
]

Overall, funding by the national government was expected to increase from 25% in 2000 to 75%.

External cooperation

Uganda receives external support from several donor agencies. In 2002, the Sector-Wide Approach (SWAP) for the water and sanitation sector was adopted this is a mechanism under which the national government and its development partners agree on a common approach to improve sector performance. [cite journal
last = Ministry of Water and Environment (Uganda)
first =
authorlink =
coauthors =
title = Water and Sanitation Sector Performance Report 2006
journal =
volume =
issue =
pages =
publisher =
location =
date = September 2006
url = http://www.danidadevforum.um.dk/NR/rdonlyres/94B047D5-F8C9-46C9-B56D-7A43367ED141/0/WSSperformanceReportUganda.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-13
, p. 5
] The SWAP ensures the full participation of all stakeholders in all stages of the programs. Most development partners have agreed to channel its financing through the national budget. According to UN-Water, the SWAP has led to the increased confidence of development partners and has proved to be the most appropriate mechanism for resources mobilization and implementation. [cite journal
last = UN-Water
first =
authorlink =
coauthors = World Water Assessment Programme
title = National Water Development Report: Uganda. Prepared for 2nd UN World Water Development Report "Water, a shared responsibility".
journal =
volume =
issue =
pages =
publisher =
location =
date = 2006
url = http://unesdoc.unesco.org/images/0014/001467/146760e.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-05
, p. 25-27
]

African Development Fund

In 2005, the African Development Fund decided to contribute US$61 million to the rural water supply and sanitation program. Another US$118 million are provided by the Government of Uganda, and US$39 million are financed by NGOs, several other development partners, and directly by the communities. The program, which lasts for 4 years, aims to rehabilitate existing water supply schemes and provide new ones in rural areas. Furthermore, it seeks to provide new sanitation facilities in public places, schools, and health centers. These physical efforts are accompanied by environmental assessments, mitigation, and monitoring, as well as community development and capacity building. Finally, the program provides for institutional support for the central ministries in order to enable them to efficiently carry out their tasks. [cite journal
last = African Development Fund
first =
authorlink = African_Development_Fund#Group_Entities
coauthors =
title = Appraisal Report. Rural water supply and sanitation program, Uganda
journal =
volume =
issue =
pages =
publisher =
location =
date = March 2005
url = http://www.afdb.org/pls/portal/url/ITEM/084B449D5E817267E040C00A0C3D4328
doi =
issn =
isbn =
id =
accessdate = 2008-05-06
]

Joint Water and Sanitation Sector Programme Support

The Joint Water and Sanitation Sector Programme Support is aligned to the PEAP sector objectives and its pillars 2 (Enhancing production, competitiveness, and incomes) and 5 (Human development). Altogether, US$150 million are to be spent under the program, which started in 2008 and is expected to run for five years. The major development partner involved in the program is the Danish International Development Agency (DANIDA), which alone provides US$66 million. The other partners are the African Development Bank (US$27 million), the Austrian Development Agency (ADA) (US$19 million), the Swedish International Development Cooperation Agency (SIDA) (US$14 million), the Department for International Development, United Kingdom (DFID) (US$10 million), the European Union (US$9 million) and the German Deutsche Gesellschaft für Technische Zusammenarbeit and KfW (US$6 million).

The program aims to support the achievement of the sector targets. It intends to serve about 1,410,000 people in rural areas, 373,000 people in rural growth centers (RGCs) (communities with a population between 2,000 and 5,000 people [cite journal
last =
first =
authorlink =
coauthors =
title = Rural Water and Sanitation Strategy and Investment Plan 2000-2015.
journal =
volume =
issue =
pages =
publisher =
location =
date =
url = http://siteresources.worldbank.org/INTPRS1/Resources/383606-1201883571938/Uganda_Rural_WSS.pdf
doi =
issn =
isbn =
id =
accessdate = 2008-05-08
, p. 17
] ), and 155,000 in small towns directly with water and to give them access to basic sanitation and hygiene facilities. Besides the extension of water supply and sanitation in rural areas, RGCs, and small towns, the program includes components (i) water resources management, (ii) sector program support for capacity building, and (iii) sector reforms and water for production. [cite journal
last = Republic of Uganda
first =
authorlink =
coauthors = GTZ/DED, Germany; Ministry of Foreign Affairs, Denmark; Austrian Development Agency, Austria; African Development Bank; European Union Water Facility, European Union; Swedish International Development Cooperation Agency, Sweden; Department for International Development, UK
title = Joint Water and Sanitation Sector Programme Support (2008 – 2012). Programme Document.
journal =
volume =
issue =
pages =
publisher =
location =
date = July 2007
url = http://www.danidadevforum.um.dk/NR/rdonlyres/4DD703F6-91CD-493D-8437-114470091C64/0/FinalJWSSPSwithannexes25July2007.doc
doi =
issn =
isbn =
id =
accessdate = 2008-05-14
]

European Union

The European Union contributed US$22.5 million (€17.5 million) to the Mid-Western Towns Water and Sanitation Project, while the national government of Uganda provided US$1.6 million (€1.25 million). [1 Euro = US$1.28307 (2006-08-31); source: http://oanda.com] . Under the project, which was commissioned in August 2006 and was expected to end in August 2007, water supply and sanitation facilities in the towns of Masindi, Hoima, and Mubende districts were rehabilitated and extended. [cite web
last = The European Commission's Delegation to Uganda
first =
authorlink =
coauthors =
title = EU Newsletter in Uganda
work =
publisher =
date = September 2006
url = http://www.deluga.ec.europa.eu/en/newsletter/september06/government_eu.html
format =
doi =
accessdate = 2008-05-14
]

World Bank

The World Bank has been active for decades in Uganda. For instance, the Bank approved its seventh Poverty Reduction Support Credit (PRSC) in 2008, under which it will provide US$200 million from May 2008 to September 2009, supporting Uganda's third Poverty Eradication Action Plan (PEAP). [cite web
last = World Bank
first =
authorlink = World Bank
coauthors =
title = Uganda - Overview
work =
publisher =
date =
url = http://web.worldbank.org/external/projects/main?Projectid=P101231&Type=Overview&theSitePK=374864&pagePK=64283627&menuPK=64282134&piPK=64290415
format =
doi =
accessdate = 2008-05-14
]

Uganda Water Small Towns and Rural Growth Centers

This Output-based aid (OBA) project is carried out in 6 selected small towns and 4 Rural Growth Centers, where new water connections and public water points for about 45,000 poor beneficiaries are planned. The connections will take the form of household yard taps and public standpoints. The private sector participates through management contracts in small towns and design-build-operate contracts in RGCs. In order to ensure sustainable access, a part of the subsidies will not be paid until the connections are constructed according to agreed standards. The World Bank approved the project in February 2007 and is financing the total project cost of US$3.2 million. The project is expected to end in February 2010. [cite web
last = World Bank
first =
authorlink = World Bank
coauthors =
title = OBA in Water Supply in Uganda's Small Towns and Rural Growth Centers
work =
publisher =
date =
url = http://www.gpoba.org/activities/details.asp?id=39
format =
doi =
accessdate = 2008-07-05
and [http://www.cowi.com/cowi/en/menu/projects/society/welfareeconomicsandservices/outputbasedaidforwatersupplyinuganda.htm COWI:Output-based aid for water supply in Uganda] and [http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2006/08/22/000090341_20060822144924/Rendered/PDF/37023.pdf World Bank Project Information Document OBA]
]

Water Supply Project

From 1990 to 1998, the Water Supply Project was carried out under the framework of an urban water program. Its objectives were to improve public health, enable increased production of goods and services, prevent environmental pollution, and ease women's burden through the expansion and improvement of water supply and sanitation facilities. In Kampala, Jinja, Masaka, Mbara and Mbare, the project supported physical and institutional components in order to expand the system and strengthen the NWSC. In addition, water meters were installed to prevent water waste. The World Bank contributed US$60 million to the project. [cite web
last = World Bank
first =
authorlink = World Bank
coauthors =
title = Projects - Uganda : Water Supply Project (02)
work =
publisher =
date =
url = http://web.worldbank.org/external/projects/main?Projectid=P002969&Type=Overview&theSitePK=40941&pagePK=64283627&menuPK=64282134&piPK=64290415
format =
doi =
accessdate = 2008-05-14
]

References

External links

* [http://www.dwd.co.ug/ Directorate of Water Development (DWD)]
* [http://www.nwsc.co.ug/ National Water & Sewerage Corporation (NWSC)]
* [http://www.uwasnet.org/ Uganda Water and Sanitation NGO Network (UWASNET)]


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