Water Papers Water Papers 64895-SL July 2011 SIERRA LEONE Public Expenditure Review for Water and Sanitation 2002 to 2009 Anthony Bennett, Darrell Thompson and Meike van Ginneken Water Papers are published by the Water Unit, Transport, Water and ICT Department, Sustainable Development Vice Presidency. Water Papers are available on-line at www.worldbank.org/water. Comments should be e-mailed to the authors. waterReport Sierra Leone 3-6-12.indd 1 3/6/12 6:01 PM Approving Manager Junaid Kamal Ahmad Contact Information The paper is available online at http:www.worldbank.org/water. The author may also be contacted through the Water Help Desk at whelpdesk@worldbank.org. Disclaimer – World Bank © 2012 International Bank for Reconstruction and Development / International Development Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. 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Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. waterReport Sierra Leone 3-6-12.indd 2 3/6/12 6:01 PM CONTENTS Abbreviations and Acronyms v Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii 1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Methodology and Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Reading this Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2. Sector Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.1 Sector Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2 Legal Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3 Roles and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3. Sector Performance of Water Supply and Sanitation Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.1 Access to Improved Water Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.2 Urban water Supply Sector Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.3 Rural Water Supply Sector Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.4 Use of Improved Sanitation Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.5 Urban Sanitation Sector Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.6 Rural Sanitation Sector Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 4. Public Expenditure on Water and Sanitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.1 How much is Budgeted for Water and Sanitation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.2 How Much is being Spent? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 4.3 Sources of Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 4.4 How is Spending Allocated? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4.5 Benchmarking WSS Public Expenditures in Sierra Leone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 5. Budget Execution and Spending Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.1 Budget Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.2 Analysis of Budget Execution Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 6. Conclusion and Recommendations How can Public Expenditure Translate into Better Water and Sanitation Services? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 6.1 Running While Standing Still. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 iii waterReport Sierra Leone 3-6-12.indd 3 3/6/12 6:01 PM 6.2 Targeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 6.3 Efficiency of Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 6.4 Recommendations – Breaking the Status Quo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Annexes Annex 1: Budgets for Water and Sanitation in Sierra Leone and Expenditure 2002–2009 . . . . . . . . . . . . . . . . 36 Annex 2: GVWC revenue, expenditure, and cash flows (2002–2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Annex 3: SALWACO Revenue, Expenditure and Cash Flows 2002–2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Annex 4: Persons Met . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Annex 5: Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Figures Figure 1: Main Water Sources Used, by Region (percentage of households) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Figure 2: Access to Improved Water Supply between 1990 and 2008 and Trend Line to Reach the MDG Target (percentage of households) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Figure 3: Billing and collection ratios for GVWC, 2006–2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure 4: Type of Household Sanitation Facility Used, by Region (% of households, includes shared facilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Figure 5: Trend in Access to Sanitation and Trendline to Reach MDG and National Target (in percentage of population) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Figure 6: Water and Sanitation Sector Weight in Total Public Expenditure and GDP . . . . . . . . . . . . . . . . . . . . 19 Figure 7: Donor Spending and Government Spending between 2002 and 2009 (average percentage of total expenditures to the left and year by year absolute variations to the right) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Figure 8: Donor Expenditure 2002–2009, by Donor Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Figure 9: Public Expenditure in WSS Sector as Compared to the Health Sector . . . . . . . . . . . . . . . . . . . . . . . . . 21 Figure 10: WSS Public Expenditures in Selected African Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Figure 11: Shares of Internal and External Financing in WSS Expenditures in a Few African Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Figure 12: Budget Execution Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Tables Table 1: Trend in Access to Improved Drinking Water Sources (percentage of population) . . . . . . . . . . . . . . 9 Table 2: Use of Type of Water Facilities in Sierra Leone (percentage of population) . . . . . . . . . . . . . . . . . . . . . 10 Table 3: Time to Obtain Drinking Water (round trip) (percentage of population) . . . . . . . . . . . . . . . . . . . . . . 10 Table 4: Guma Valley Water Company Efficiency (in millions liters) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Table 5: Freetown Domestic Water Tariffs, October 2006 (US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Table 6: SALWACO Performance in Provincial Towns, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Table 7: Access to Sanitation (in percentage of population) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Table 8: Sanitation Access by Type of Facility (in percentage of population) in 2008 . . . . . . . . . . . . . . . . . . . . . 14 Table 9: GoSL Budget for the Water and Sanitation Sector between 2002 and 2009 (in Le million) . . . . . . . 17 Table 10: Public Expenditure in Water and Sanitation Sector between 2002 and 2009 (in Le million) . . . . . . 18 Table 11: Execution Rates for Priority Poverty Reducing Sectors Compared to Overall Execution Rates . . . . 22 iv | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 4 3/6/12 6:01 PM Abbreviations and Acronyms ACF Action Contre Faim (NGO) MICS Multi Indicator Cluster Survey CLTS Community-led Total Sanitation MOFED Ministry of Finance and Economic DfID Department for International Development Development (United Kingdom) MTEF Medium-Term Expenditure Framework DHS Demographic and Health Survey NGO Non-Governmental Organization DSDP Decentralized Service Delivery Project NRA National Revenue Authority EC European Commission PER Public Expenditure Review ECA Economic Commission for Africa PFM Public Financial Management EHA Environmental Health Assistant PRSP Poverty Reduction Strategy Paper EHD Environmental Health Division SALWACO Sierra Leone Water Company FCC Freetown City Council TA Technical Assistance FWSC Freetown Water and Sewerage Company UK United Kingdom GBAA Government Budgeting and Accountability Act UN United Nations GDP Gross Domestic Product UNDP United Nations Development Program HIPC Highly Indebted Poor Countries UNICEF United Nations International Children’s Fund IDB Islamic Development Bank WATSAN Water and Sanitation IFMIS Integrated Financial Management Information WHO World Health Organization System WSD Water Supply Division, Ministry of Energy and JICA Japanese Investment Cooperation Agency Water Resources JMP Joint Monitoring Program (UNICEF/WHO) WSS Water Supply and Sanitation LC Local Council LGA Local Government Act (2004) LGFD Local Government Finance Division Currency Equivalents M&E Monitoring and Evaluation (Exchange Rate Effective as of April 4, 2010) MDAs Ministries, Departments, and Agencies MDG Millennium Development Goal Currency Unit = Leone MEWR Ministry of Energy and Water Resources US$1.00 = Le 4,000 MEYS Ministry of Education, Youth and Sports Fiscal Year: January 1 – December 31 MHS Ministry of Health and Sanitation MIALGRD Ministry of Internal Affairs, Local Government, and Rural Development v waterReport Sierra Leone 3-6-12.indd 5 3/6/12 6:01 PM Acknowledgements This report was written by a team consisting of Meike van of Energy and Water Resources), Wusum Koroma, (Director, Ginneken (Task Team Leader), Anthony Bennett (Public Fi- Ministry of Energy and Water Resources, Water Services Di- nancial Management Consultant), and Darrell Thompson vision), and Francis Moijue (Executive Engineer, Ministry of (Water and Sanitation Consultant). Joachim Boko (Consul- Energy and Water Resources, Water Services Division), and tant) contributed to the analysis, specifically benchmarking Thomas Amara (Manager of Environmental Health in the Sierra Leone to other countries in Africa. This review was fi- Ministry of Health and Sanitation). The team would also like nanced by the Water Partnership Program. In Sierra Leone, to thank peer reviewers including Mike Webster, Waqar Haid- many officers and sources were extremely helpful, in particu- er, Cyrus Talabi, Diego Rodriguez, and Kwabena Amankwah- lar, Dr Eng Yassin M’shana (DFID consultant to the Ministry Ayeh. vi | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 6 3/6/12 6:01 PM Executive Summary T his review focuses on how public expenditure sources. In Freetown, 38 percent of properties have house translates into the delivery of water supply and connections, in addition to over 500 stand posts. From 2002 sanitation services in rural and urban areas in Si- to 2009, revenue collection of the Guma Valley Water Com- erra Leone. It describes the legal and institutional frame- pany (GVWC) (responsible for water provision in Freetown) work for the allocation of resources, assesses access to WSS covered 61 percent of total expenditures. From 2005 to 2009, services and past sector performance, and analyzes public only 11 percent of the water produced by GVWC was paid for expenditure in the sector, including the factors affecting the because of low billing and collection ratios. The Sierra Leone efficiency of use of resources, and makes recommendations. Water Company (SALWACO) provides services to a small per- Water supply includes the supply, distribution, and usage of centage of the population in a number of secondary towns, water for drinking, food preparation, and hygiene. Sanitation while most households get water from dug wells, which are is defined as the sanitary disposal of liquid waste and the often unprotected. promotion of hygienic practices. Access to rural water supply was 35 percent in 2008 and The review covers the period from 2002 to 2009, a pe- has not improved very much over the period of the re- riod of reconstructing after a decade of upheavals. Since view. Protected dug wells and public tap/standpipes are the 2002, democracy and a stable environment for development main access sources for rural dwellers. More than 40 percent have been re-established in the country, especially since the of the rural population draws their drinking water from sur- 2007 presidential elections. Sierra Leone remains one of the face water, exposing them to health threats. poorest countries in the world. In 2008, only 26 percent of the urban population had improved (not shared) sanitation facilities, mainly pit Access to Water and Sanitation latrines with slab. Urban sanitation has suffered from a lack Remains Low of prioritization and a lack of clear assignment of responsi- bilities. Under the Local Government Act, urban sanitation is Access to improved water sources and adequate sani- devolved to Freetown City Council (FCC) and the various city tation hardly improved from 2002 to 2008. In 2008, 50 councils in the provinces. However, the corresponding per- percent of the population had access to potable water and sonnel and budgets have been retained by central agencies. 13 percent had access to improved sanitation. Sierra Leone is unlikely to reach the Millennium Development Goal (MDG) Access to sanitation in rural areas was approximately 6 targets on halving the number of people without access to percent between 2000 and 2008. The responsibility for sani- improved water sources and sanitation by 2015. tation is devolved to local councils, with the Water and Sanita- tion Unit of the Ministry of Health and Sanitation undertaking Urban water utilities have not kept up with rapid pop- hygiene education programs and training District Sanitary ulation growth during the period of civil unrest. Urban Inspectors. The Water and Sanitation Unit lacks institutional areas are better served than rural one, with more than 80 capacity. Few local councils have a dedicated sanitation de- percent of urban dwellers having access to improved water partment or another well defined leader in the subsector. vii waterReport Sierra Leone 3-6-12.indd 7 3/6/12 6:01 PM A Changing Policy Environment and tion by 2015 vary between US$195.5 million (Water and San- itation Program Country Status Overview) and US$520 mil- Uncompleted Decentralization lion (DFID/UNICEF WASH project). Even without taking into Changes in the national water supply and sanitation account the need to finance recurrent investments, current (WSS) policy in Sierra Leone have resulted in frequent public expenditure only covers between 10 and 25 percent shifts in responsibilities and lack of capacity. Institutional of these investment needs. changes have mostly followed political changes. The chal- lenge going forward will be to fully implement the current The vast majority of sector spending is for water sup- policies while sorting out the (limited) inconsistencies with ply with only a small percentage (<10%) allocated to other pieces of legislation. It will be important that the sec- sanitation. Financing to rural water supply is estimated at tor has adequate time for implementation, to build capacity, approximately sixty percent of public expenditure in the re- and to align funding to responsibilities. view period—nearly all of it from donors. Due to limited data availability, spatial allocation of public expenditures could The devolution of water supply responsibilities as pre- not be analyzed. scribed in the 2004 Local Government Act has not been implemented due to lack of capacity in the local coun- Since 2006, the Ministry of Finance and Economic De- cil administrations, resistance of central ministries, and velopment (MOFED) has made small grants to district inconsistencies among various laws. With the ongoing councils for rural water supply, but these transfers have decentralization process, further institutional reforms are been unpredictable and have fallen short of budgets. foreseen in the framework of the new National Water and These transfers represent two percent of public expenditures Sanitation Policy (NWSP) and the Local Government Act, in the sector between 2006 and 2009. Funding has been with more responsibilities being devolved to local govern- negotiated annually depending on total government re- ments which should play an increasing role in water supply sources. Transfers have been delayed as local councils failed and sanitation service delivery. to meet release conditions. The execution rate of transfers is 71 percent. There are indications that local councils have not The 2007 National Water and Sanitation Policy (NWSP) always used tied grants for WSS expenditures. provides a basis to improve services, although the re- sponsibility for sanitation is not well-defined. This review confirms that NWSP can provide a basis to consolidate the The Majority of Funds Come from sector framework. Responsibilities for water supply are de- Donors fined, but responsibilities for sanitation are dispersed and are not well-defined, and there is no corresponding lead agency Four fifths of public expenditure in the period 2002– for sanitation. 2009 was financed by external donor financing, with the share of donor spending decreasing in recent years. This level of donor dependency is in line with oth- Expenditure Does not Cover er Sub-Saharan countries. WSS expenditures funded from Investment Needs external sources peaked in 2006. Spending from internal resources has varied between $0.6 million and $1.7 mil- Over the period 2002–2009, total sector expenditure lion a year. While a considerable part of internal financing was US$50 million over eight years, or US$6 million per has gone to recurrent expenditures, donor resources were year. Public expenditure on WSS represented 1.8 percent of mainly used to fund capital spending. Most internal sources total public expenditure and equaled 0.2 percent of Gross went to urban areas, while donor financing was more fo- Domestic Product. Both of those percentages are compa- cused on rural areas. rable to the average for sub-Saharan African countries. Many households have invested their own money to Investment needs to reach the MDGs far exceed the cur- construct on-site facilities (e.g. dug wells and pit la- rent level of public expenditure in Sierra Leone. Estimates trines) that account for the vast majority of current ac- differ widely with regard to what investment is needed to cess. Cost recovery from households for network services achieve the e national targets for access to water and sanita- has not covered operating costs. There is no formal private viii | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 8 3/6/12 6:01 PM sector financing in the WSS sector and data on expenditures crease by 80 percent, from four million to seven million. Just by informal private providers are not available. maintaining the same access rate would require provision of access to water supplies for 1.6 million additional people and to sanitation for 0.4 million additional people. Further, Budget Execution is Lower than in the years of conflict have resulted in the destruction of many other Sub-Saharan Countries facilities and caused large groups of population to move, which means that they need services in different places than Average budget execution for the Consolidated Budget before. In urban areas, during the period of civil unrest, wa- for 2002 to 2009 is 39.4 percent. The execution ratio of ex- ter supply facilities have not kept up with rapid urbanization. ternal resources and trend cannot be calculated due to data Years of conflict and neglect of maintenance have caused limitations. Execution rates have been lower in the water and infrastructure to crumble. As a result, part of public expendi- sanitation sector than in other priority and poverty reduction ture has to be used to ensure that current levels of services sectors in Sierra Leone. The budget execution rate for water are continued. The lack of cost recovery means that part of and sanitation is below the execution rate in other Sub-Saha- public expenditure is used to cover recurrent costs. ran countries, which averages approximately 60%. Progress in the water and sanitation sector in the com- The low execution rate of the planned WSS budget is not ing years will require action on multiple fronts taking in line with government policy to protect ‘poverty re- into account the limited financial, human and technical ducing’ or ‘pro-poor’ spending from budget cuts. All WSS capacities of the Government of Sierra Leone. The chal- spending was included in the definition of poverty reducing lenges of rapidly improving water and sanitation services are expenditure during the 2002 HIPC (Highly Indebted Poor enormous compared to the available resources. However, Countries) Decision Point discussions. Nevertheless, these ex- recent progress on public financial management systems, as penditures have not been protected; rather the reverse hap- well as sector policies and legislation, provide a good basis pened. In 2007, expenditures on poverty reducing programs for the coming years. reached only 57 percent of the budgeted amount while all other spending reached 72 percent of the budgeted amount. The challenge for the water and sanitation sector in Sier- ra Leone is to break the current status quo and to move Issues at various points of budget execution cause un- to a reformed sector. The clarification of the institutional predictable delays and is damaging progress in the sec- framework for public expenditures in the sector is a pre-con- tor. Delays in the release of funds occur from both the gov- dition for sharper focus in funding allocations. ernment and donors. Lack of capacity in line ministries and local councils limits sector ex ante project appraisal and ex Recommendations of this review focus on implement- post project evaluation. Another major cause of delay is lack ing existing policy frameworks rather than inventing of procurement skills and project management capacity, both new strategies: in budget agencies and in the private sector. Expenditure ar- rears are significant across government departments but the ■ Improved monitoring and evaluation amount of WSS arrears is not known. The unpredictability and ■ A sharper focus in the allocation of funding delays in the budget chain cause cost overruns and discour- ■ Improved governmental capacity to use its funds more age providers from bidding for government contracts. efficiently ■ More and better donor financing The Way Forward – Focus on Implementation Improved Monitoring is Required for Better Allocation and Implementation Maintaining current access rates have absorbed a large part of public expenditure because of population Accountability, better allocation, and achieving efficien- growth and relocation, rehabilitation needs of crum- cy in sector performance require well-functioning sys- bling infrastructure, and lack of cost recovery. Between tems for monitoring and evaluation. This means building 1990 and 2015, Sierra Leone’s population is expected to in- reporting systems that measure the efficacy and efficiency Résumé analytique | ix waterReport Sierra Leone 3-6-12.indd 9 3/6/12 6:01 PM expenditure in achieving measurable outcomes in terms sources can be targeted to the poor. Low utility tariffs are a of access, quality, and sustainability of services. Evaluations major issue. However, before making changes to the tariffs, could provide valuable information on what works and what utilities should address their low billing and collection ratios. does not, and provide information for the design of future Promoting better maintenance of existing assets can reduce programs. allocation of spending to rehabilitation and thus increase the budget available for extending access. Better measurement and monitoring starts with stan- dardizing definitions. This review was complicated by some inconsistencies in the way that different agencies Improved Capacity of the Government measure and report performance. Standardization of defini- to Use its Funds More Efficiently tions will require the development input forms, templates, and standard output reports. Capacities in WSS project cycle management should be developed at different levels of government, including The Integrated Financial Management Information Sys- procurement, disbursement, and auditing functions. tem (IFMIS) should be fully implemented. Much progress Better planned projects and improved procurements will de- has been made in a relatively short amount of time, but there crease the number of abandoned works and reduce delays. is still room for improvement. Increasing capacities in project appraisal and implementa- tion will improve budget absorption capacities at different levels of government. Project estimates should integrate A Sharper Focus on the Allocation capital construction costs, rehabilitation costs, and operat- of Funding to Extend Services to the ing and maintenance costs, since they all have to be funded. Capacity problems are especially urgent in local government Unserved authorities. Water and sanitation expenditures should be better protected from budget cuts as they are considered ‘pov- erty reducing’ or ‘pro-poor’ spending. More and Better Donor Financing to Increase Results A more explicit allocation of resources, including choic- es between rural and urban services and water supply Donors should follow the Government of Sierra Leone’s and sanitation, would improve service delivery. For wa- (GoSL) leadership and commitment to the sector. Donor ter supply, the greatest needs are in rural areas, and transfers funding is critical to supplement the internal resources al- to local councils for rural water supply could be increased ready flowing into the sector, as WSS funding needs cannot from their current levels. This should go hand in hand with be met by the government alone. Donor funding commit- decreasing central ministerial budgets as responsibilities ments for the coming years are a good start. are devolved. While sanitation facilities might be largely fi- nanced by households in the coming years, public financ- Donor harmonization and pooling of resources can ing for sanitation marketing and hygiene education provides improve efficiency of funding and optimize the use of high returns on investment. With a revised focus for resource limited GoSL capacities. Donors should increase the speed allocations, a lead agency for sanitation could be chosen, ca- and predictability of the release of funds. Pooling resources pacities built, and budget provided. is likely to be most effective when it is combined with mea- sures that generate the economies of scale of such pooling Freeing public resources will require increasing cost through harmonization of procurement, disbursement, and recovery from those who can pay. Promoting better monitoring procedures, and coordination of the different maintenance of existing assets can reduce the need donor contributions. As a first step, development partners for rehabilitation. The sector cannot develop sustainably should consider forming a sector donor group to harmonize without the wealthy paying for their services so public re- their approaches and monitoring and evaluation impacts. x | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 10 3/6/12 6:01 PM 1. Introduction IBRD 33478 SIER R A LEONE SELECTED CITIES AND TOWNS MAIN ROADS DISTRICT CAPITALS RAILROADS NATIONAL CAPITAL DISTRICT BOUNDARIES RIVERS INTERNATIONAL BOUNDARIES S ierra Leone, a West African country located be- 13°W 12°W 11°W tween Liberia and Guinea, has a total population GUINEA To Ouré-Kaba of 5.8 million, growing at an annual rate of 2.3 per- 10°N To Kindia To Faranah 10°N cent. Of this, 38 percent lives in urban areas, defined as com- Falaba t s. a M Yana go Mon ar ies W munities of more than 2,000. The country covers a total of a Kabala arc ar KOINADUGU Bendugu t Sc W GUINEA Grea Kamakwie i S el 71,740 square kilometers. Fadugu To Bagbe Kamaron Forecariah Madina Junction BOMBALI Bintimani ts. KAMBIA (1948 m) M Kurubonla cies Pendembu a Kambia m car Batkanu Lo le S Alikalia Bumbuna Litt 9°N 9°N Sierra Leone is reconstructing after a decade of up- Mange Gbinti Makeni Binkolo Kayima ana Pamp heavals, but social indicators are still very low. Over the Port Loko Tefeya Lunsar Magburaka KONO Matotoka Lungi PORT LOKO el Yengema ls R ok Sefadu Pepel T O N K O L I L I Masingbi il past years (and especially during 1990–2002) Sierra Leone ri H FREETOWN Masiaka Njaiama- Sewafe Koindu Go Yonibana Gandorhun Songo Yele oa suffered from political upheavals and a brutal civil war ac- WESTERN M To Waterloo Mongeri Kolahun Buedu AREA F.R. Kailahun Panguma Rotifunk Moyamba Dambara KAILAHUN companied by displacement of millions of people and wide- Banana Islands Yawri BO KENEMA Pendembu Bay M O YA M B A Mano Lago 8°N Bo 8°N Daru g spread destruction of infrastructure. Since 2002, democracy Sembehun Jon Shenge Blama Kenema wa Se LIBERIA LI B E R I A and a stable environment for development have been re- Kribundu a Sherbro Joru Mo Momaligi Sumbuya Turtle Sherbro Matru Islands Island Bonthe established in the country, especially since the 2007 presi- Potoru B O N TKH E ittam Pujehun dential elections. But Sierra Leone is still one of the poorest PUJEHUN Zimmi ATLANTIC OCEAN Lake Mabesi M an o Lake Fairo countries in the world. According to the UNDP’s Human De- 7°N Mape Sulima To Monrovia SIERRA LEONE velopment Index, it was ranked 180 out of 182 countries in 0 20 40 60 Kilometers 2009. Life expectancy at birth is 47 years, among the five low- 0 20 40 50 Miles This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information est in the world. Gross domestic product (in purchase power shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. 12°W 11°W NOVEMBER 2004 parity) was $809 per capita in 2009; again among the lowest in the world. In 2007, 48 percent of Sierra Leoneans were liv- ing below the poverty line. This review covers water supply and sanitation. Water supply is defined as the supply, distribution, and usage of The purpose of this Public Expenditure Review (PER) is water for drinking, food preparation, and hygiene. Sanitation to gain insights into how public expenditure translates is defined as the sanitary disposal of liquid waste and the into actual delivery of water and sanitation services in promotion of hygienic practices. Solid waste management is rural and urban areas in Sierra Leone. The review covers not included in this review.1 The review does not cover water the period 2002 to 2009. It describes the legal and institu- resource management, including hydro-power, industrial, tional framework for the allocation of resources, assesses agricultural, and recreational uses of water, and river basin access to WSS services and past sector performance, and management. analyzes public expenditure in the sector, including the fac- tors affecting the efficiency of use of resources, and makes recommendations. 1 In some cases where the mandate of agencies responsible for sani- tation covers liquid and solid waste inseparably, solid waste expendi- ture has been included—his is specified in the text. 1 waterReport Sierra Leone 3-6-12.indd 1 3/6/12 6:01 PM 1.1 Methodology and Data though 2009 entries may not be complete. This database counts water and sanitation as a single sector. However, This PER combines a review of literature and govern- some WSS expenditure is classified under other functional ment documents with interviews and consultations categories e.g. the World Bank Power and Water project is with sector actors. The methodology started with a desk categorized under Infrastructure. Where necessary, donor review. The team then worked in Sierra Leone March 14–27, data were obtained directly from the respective donor 2010, interviewing stakeholders and officials from central agency country offices. government agencies, three service providers, and six devel- opment partners, and collecting data. The PER team visited Public expenditure breakdown by subsector has been a sample of three city councils (CC) (Bo CC, Kenema CC, and tricky. Some expenditure (such as subsidies to SALWACO) Makeni CC), and three district councils (DC) (Bo DC, Kenema could easily be identified as water supply. However, some DC, and Bombali DC) and met some senior administrators, projects cover both water supply and sanitation and cannot councilors, SALWACO staff, staff from the Ministry of Energy be easily identified by subsector. and Water Resources, Water Supply Division (MEWR-WSD), Freetown City Council, and the Local Government Finance The comparison of actual expenditure with budget fore- Division (LGFD) of the Ministry of Finance and Economic De- casts is plagued by data gaps and discrepancies that velopment. Further information collection continued until have not been resolved. Only execution rates of govern- the first draft report was issued in November, 2010. The re- ment spending from internal resources could be analyzed. port went through two rounds of reviews within the World With regard to external funding, budget figures are incom- Bank, and additional work was done during the reviews to plete. The proportion that is on budget is not known. Actual incorporate the comments received. A list of people inter- expenditures from external funds are entirely omitted from viewed is attached in Annex 5. A bibliography is attached the Public Accounts. In the DAD, there are no data on donor as Annex 6. project funding before the database was set up in 2004, and The methodology aims to be comprehensive in the attempts to obtain missing data direct from donor offices sense that it tries to cover relevant budgetary and non- were only partially successful. budgetary sources of water sector spending. Budget and expenditure estimates are recorded in nominal terms for the Overall, the data collection process raised a number of period from 2002 to 2009. Some of the more detailed break- methodological issues that were addressed as carefully downs are not available for the years prior to introduction as possible. First, data availability and quality dictate to a of the Integrated Financial Management Information System large extent what type of analysis of budget allocation and (IFMIS) in 2005. IFMIS data have been preferred to LGFD or expenditure can be conducted. Second, it was important to Local Council (LC) data, as these are the basis for the official avoid double-counting of transfers from central government public accounts. Data from before 2005 are provided where to parastatals and sub-nationals by careful matching-up of appropriate. The IFMIS is not yet fully used which makes the accounts. This was especially critical as the period from identification of WSS expenditures problematic. The expen- 2005 to 2009 was a transitional period in which water sup- diture analysis includes three programs that can be directly ply and sanitation was officially devolved to local councils, identified with WSS in the IFMIS. but remained de facto very centralized. Special care was paid to indicate the quality of data and to avoid a false sense of The Development Assistance Database (DAD) has precision. been used to obtain donor data from 2004 onwards. The DAD is an on-line, open access database, managed Notwithstanding these efforts, it is important to note by the Development Assistance Coordination Office in the data limitations in Sierra Leone, a fragile state with MOFED. The DAD captures commitments and expenditure limited government capacity. The period covered in this fairly completely, although with some classification issues. public expenditure review follows the end of a devastating The DAD has been collecting aid data irrespective of proj- decade-long war in 2002. The period was also character- ect management arrangements since 2004. It is believed ized by a number of subsequent reforms, both in the water to be fairly complete in recent years, at least up to 2008, supply sector and in public financial management. 2 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 2 3/6/12 6:01 PM 1.2 Reading this Report ■ Chapter 4 identifies and classifies sector expenditures. It looks into how much is being spent and from which The rest of this report is structured as follows: sources, the allocation of spending by subsector and area, as well as the efficiency of spending. It bench- ■ Chapter 2 of this report describes the setting of the wa- marks public expenditure in WSS to that in other African ter and sanitation sector. It consists of a review of the countries and compares current expenditure to invest- sector strategy, the legal and institutional framework ment needs. and the roles and responsibilities of various govern- ■ Chapter 5 examines budget execution and analyzes the ment institutions. various parts of the budget execution chain to explore ■ Chapter 3 covers the performance of the water and the obstacles for better budget allocation and execution. sanitation sector. It looks into the level of access to im- ■ Finally, Chapter 6 sets out the conclusions and recom- proved water sources and sanitation facilities, as well as mendations coming from the analysis and answers the to sector performance in various subsectors. question of how public expenditure can translate into better water and sanitation services in Sierra Leone. Introduction | 3 waterReport Sierra Leone 3-6-12.indd 3 3/6/12 6:01 PM waterReport Sierra Leone 3-6-12.indd 4 3/6/12 6:01 PM 2. Sector Background S ierra Leone has ample fresh water resources but represent 15 percent of all deaths among children under low access to potable water and sanitation servic- 5-year in developing countries.3 Diarrheal diseases caused es. Average annual rainfall ranges between 5000 mm by lack of water, sanitation, and hygiene leads to 16 200 in Freetown (the capital, on the coast) and 2500 mm in the deaths per year in Sierra Leone, and accounts for 12 percent North East. The wet season is from May to October, and the of the burden of disease in the country.4 dry season from November to April. Total actual renewable water resources per inhabitant were estimated at 30,960 cubic meters per year in 2004. However, as in many other 2.1 Sector strategy sub-Saharan African countries, access to improved water The Millennium Development Goals (MDGs) for water and and sanitation services is very low. Indicators on water sup- sanitation are as follows: ply in Sierra Leone reveal that in 2008, 50.5 percent of the total population had access to improved drinking water; 81.3 Halve by 2015 the percentage of people without sustain- percent in urban areas, only 35.2 percent in rural areas. Ac- able access to improved water supply, taking 1990 as the cess to improved sanitation facilities is limited to 26 percent base year. In 1990, 52 percent of the population (then in urban areas and to 6.5 percent in rural areas. just under 4 million) did not have access to safe drink- ing water. So the target for Sierra Leone is to reduce The drinking water and sanitation sector is a relatively this to 26 percent, or to provide 74 percent of the small water user in Sierra Leone. There is no recent data population access to improved water supply, by 2015. on water use in Sierra Leone. However, a study done by Food and Agriculture Organization (FAO)2 indicated that the total Halve by 2015 the percentage of people without sustain- water withdrawal in 2000 was near 380 million cubic meters. able access to improved sanitation, taking 1990 as the Of this, use in agriculture through irrigation accounted for 93 base year. In 1990, 87 percent of the population of Si- percent, domestic consumption for 5 percent, and industrial erra Leone did not have improved sanitation. As such, use for 2 percent. the target is to reduce this to 43.5 percent, or to pro- vide access to improved sanitation to 56.5 percent of Increasing access to safe water supply and adequate the population by 2015. hygiene and sanitation services can reduce morbidity and mortality rate, especially among children. Diseases The successive Poverty Reduction Strategies (PRSP I and transmitted through water and excrement are the second PRSP II) recognize the importance of water supply and leading cause of death among children worldwide. Accord- ing to the World Health Organization, improved water sup- ply reduces diarrhea morbidity by between 6 and 25 per- 2 FAO. Aquastat 2005: Sierra Leone Country profile. cent, while improved sanitation reduces this morbidity by 3 WHO/UNICEF 2000: Global Water Supply and Sanitation Assessment 32 percent. Lack of access to water and sanitation causes Report. loss in productivity due to illness and malnutrition. Deaths 4 http://www.who.int/quantifying_ehimpacts/national/countrypro- from diarrhea related to poor water and sanitation quality file/sierraleone.pdf 5 waterReport Sierra Leone 3-6-12.indd 5 3/6/12 6:01 PM sanitation. It is clearly recognized that water and sanitation ■ To develop a comprehensive framework for manage- are of prime importance for economic development and for ment of water resources and sustainable development the country to reach most of the MDGs. The national goals of water supply and sanitation services within an effec- are expressed in Vision 2025 and the Second Poverty Reduc- tive legal and institutional framework. tion Strategy Paper—Agenda for Change—2008–2012. The ■ To address cross-sectoral interests in water resources PRSP says: through integrated and participatory approaches in the planning, development, and management of the water The water and sanitation sector is important, as the pro- resources vision of adequate and sustainable water and sanitation ■ To improve the provision of safe water supplies and services are central to any poverty reduction strategy. Tar- sanitation facilities in urban and rural areas through a gets set under the previous PRSP were not met, while the coordinated approach main issues of limited capacity, a lack of consistent water ■ To ensure stakeholder participation in the manage- resources data, sector programming and a comprehensive ment of water resources and in the planning, con- M&E framework remain. Sierra Leone faces increasing chal- struction, ownership, operation and maintenance of lenges of water sector management, as a consequence of community based domestic water supply schemes in the lack of water policy, organized legal, regulatory and rural areas institutional frameworks and deficiency in both urban and ■ To put in place implementation strategies for sustain- rural water supply. The objective of the government is to able development and management of water resources ensure an integrated and effective management of water in the gradual changing role of the government from a resources in order to increase access to basic water and major service provider to that of coordinator, policy, and sanitation services. In the medium term emphasis will be guideline formulator laid on water resources management and the provision of adequate water and sanitation facilities. 2.2 Legal framework The national WSS policy has changed several times over A number of laws regulate the provision of water supply the period of this PER following political changes. In and sanitation services in Sierra Leone. The most impor- 2005, a WSS policy and an implementation plan were devel- tant are: oped out of the Poverty Reduction Strategy Paper process and two national consultative forums in September 2004 ■ The Water (Control and Supply) Act, 1963, provides for all and February 2005.5 Following the change of government water in declared supply areas to be owned by the gov- in August 2007, the policy statement was superseded by ernment. The Act established the Water Supply Division the National Water and Sanitation Policy (NWSP), issued by of the Ministry of Energy and Power to oversee provin- the Ministry of Energy and Power in 2008. The 2008 WASH cial water supply services. This and other legislations are (Water, Sanitation and Hygiene) strategy was prepared with badly in need of overhaul and consolidation. Other Acts stakeholder participation and aimed for greater alignment are mainly sectoral, as follows: with the Vision 2025, PRSP objectives and the MDGs. Fol- ■ The Public Health Ordinance, 1960, which created the lowing a Cabinet reshuffle in 2009, the incoming Minister Environmental Health Division of the Ministry of Health of Energy and Water Resources commissioned a fresh ex- and Sanitation to oversee sanitation services. amination of the Policy statement. A re-edited version, dated ■ The Guma Valley Water Act, 1961, which established the March 2010, is expected to be submitted soon for Cabinet GVWC to supply water to Freetown. and Parliamentary approval. ■ The Forestry Regulation Act, 2001, which created Forest Reserves to protect water sources and catchment areas. The National Water and Sanitation Policy includes nation- al targets for water and sanitation. The NWSP adopts the MDG target to provide access to improved water supply to 74 5 GOSL and ECA (2005) Action Plan for Implementing the Water Sup- percent of the population by 2015. For sanitation, the National ply and Sanitation Policy, March. Water and Sanitation Policy sets a target of providing 66 per- 6 The NWSP definition of ‘adequate’ sanitation includes shared im- cent of the population with ‘adequate’ sanitation by 2015, as proved facilities, contrary to the MDG definition of ‘improved’ sanitation defined in the Policy.6 The objectives of the Policy include: is that excludes all shared facilities (see Chapter 3). 6 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 6 3/6/12 6:01 PM ■ The Sierra Leone Water Company Act, 2001, which estab- Water supply in urban areas is provided by two public lished SALWACO to supply water to the towns of Bo, utilities. The Guma Valley Water Company (GVWC) in Free- Kenema, Makeni, Kono, and Lungi. town was established in 1961. The company was scheduled ■ The Local Government Act, 2004, which re-established for privatization under the National Commission for Priva- local councils and devolved certain functions to them, tization Act, 2002 but this has not happened. Sierra Leone including WSS functions. Water Company was established in 2001 to provide water ■ The Local Government (Assumption of Functions) Regula- supply to other communities of 5,000 or more.8 However, in tions, 2004, established 19 local councils and set out a practice it only provides limited services in a few towns. timetable for devolving responsibilities to local councils. Environmental health, sanitation and solid waste man- Responsibilities for rural water supply are in flux due to agement were scheduled to be devolved in 2005, while ongoing decentralization. Over time, the ongoing decen- urban, peri-urban, and rural water supply were to follow tralization process in the country may significantly impact the in 2007. provision of rural water services, but it has been slow to date. ■ The Bumbuna Watershed Authority and Bumbuna Con- servation Area Act, 2008, established the Bumbuna Wa- Responsibilities for sanitation are dispersed and not tershed Management Authority inter alia to coordinate well defined. The current institutional framework creates land use in the watershed area, and ensure the physical confusion over whether sanitation responsibility should fall protection and sustainability of the Bumbuna reservoir. under the MHS, Environmental Protection Agency, the min- ■ The Environment Agency Protection Act, 2008, replaced istry responsible for Local Government, or MEWR (National the Environmental Protection Act, 2000. It established Policy, paragraph 1.7.2). The Water Supply Division in MEWR the Sierra Leone Environment Protection Agency, and em- is responsible for maintenance of the sewerage system in powered the Minister of Lands, Country Planning, and Freetown, while the responsibility for liquid waste manage- the Environment to make regulations to protect the en- ment in Freetown (pit latrines and septic tanks) lies with vironment and issue guidelines for waste management. Freetown City Council (FCC). The devolution of water supply responsibilities as pre- 2.3 Roles and Responsibilities scribed in the 2004 Local Government Act has not been Responsibilities for various activities in WSS frequently implemented due to lack of capacity in the local coun- shift and formal responsibilities are not always carried cil administrations, resistance of central ministries, and out for lack of funds, technical capacity, or political will. inconsistencies between various laws. It is worth noting From 1963 to 2001, the WSD was responsible for all water that at this point of time, none of the scheduled WSS activi- supplies outside Freetown. A Rural Water Supply Unit was ties have been devolved to the local councils. Central agen- established within the Division in 1981. Provincial urban wa- cies such as SALWACO, WSD, and MHS-EHD are decentralized ter supply responsibility was transferred to the Sierra Leone and maintain a presence in each district. Additionally, the in- Water Company (SALWACO) in 2001. Responsibility for water consistencies between the Local Government Act and other supply was officially decentralized to local governments un- legislation have undermined the devolution process. der the Local Government Act in 2004, although implemen- tation of the LGA has been slow. Further institutional reforms are foreseen under the Na- tional Water and Sanitation Policy. The WSD will become The Ministry of Energy and Water Resources7 is the a Water Department and implement the new mandate of overall authority and lead government institution on MEWR. Responsibility for delivery of services will be moved all water and water-related issues. It is responsible for to the two operating companies, and the regulatory func- the formulation of water policies, and their implementa- tion will move to the proposed Regulatory Authority. The tion, monitoring and evaluation, including drinking water for Water Department will have sections for: (i) policy, research both urban and rural populations. It is also responsible for sector coordination, cross-sectoral planning, and sourcing funds for water projects. In the future, it will implement the 7 Ministry of Energy and Power until 2009. proposed Water Resource Management Act and provide the 8 This differs from the definition by Statistics SL (population> 2,000), secretariat to the National Water Resources Board. and could lead to inconsistencies in the planning and monitoring data. Sector Background | 7 waterReport Sierra Leone 3-6-12.indd 7 3/6/12 6:01 PM and planning; (ii) urban water supply and sewerage; (iii) rural There are many NGOs active in the water and sanitation sec- water supply; and (iv) water resource management. tor in Sierra Leone. They include Oxfam GB, GOAL/SL, Con- cern Worldwide, Action Contre la Faim (ACF), Action Aid, Donor agencies play an important role in the WSS sec- Catholic Relief Services and PLAN Sierra Leone, several of tor and do not always fully align with GoSL policies. Al- which have participated in Community-Led Total Sanitation most all donors are signatories to the 2005 Paris Declaration programs and other water supply and sanitation initiatives. on Aid Effectiveness and the 2008 Accra Agenda for Action. In the earlier years of this review, donors pursued their own The domestic private sector in the sector consists al- agendas in WSS in the absence of a clear national strategy most entirely of small-scale enterprises. There is no for- and program. The introduction of the National Water and mal private sector participation in the water supply sector Sanitation Policy provides a framework for harmonization. in Sierra Leone but many households get their water supply However, this is still work in progress. Indeed, under the Sier- from small scale providers (e.g. carts, vendors) that either get ra Leone Aid Policy, the key objective is to assert GoSL lead- their water from a utility network or directly from a source ership in aid coordination, harmonization, and alignment in (private borehole, surface water source). Small scale provid- order to ensure that aid is used effectively in the pursuit of ers also play a role in the sanitation sector, including masons government priorities, to strengthen the institutions of the that built latrines and companies that empty sludge from state, and in a way that promotes an effective division of la- pits and septic tanks. bor among donors.9 Non-Governmental Organizations (NGOs) play an im- portant role in WSS service provision in rural areas, though there is no aggregated data on their activities. 9 Government of Sierra Leone (2009) Aid Policy. Issued in November. 8 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 8 3/6/12 6:01 PM 3. Sector Performance of Water Supply and Sanitation Sector T his chapter first discusses access to improved water in line with the MICS3 data from 2005). Only 7.1 percent of sources (paragraph 3.1) and the performance of Sierra households in Sierra Leone have a water connection on their Leone’s urban and rural water supply sector (paragraph premises. 3.2 and 3.3). It then continues to discuss access to sanitation (paragraph 3.4). It ends with a discussion on urban and rural Approximately 40 percent of the population in rural ar- sanitation sector performance (paragraph 3.5 and 3.6). eas gets their drinking water from an unprotected sur- face water source. In some parts of the country, for example in Kenema in the east, water is taken from streams originat- 3.1 Access to Improved Water Sources ing at high elevations, which is generally of good quality. By Access to improved drinking water sources has fluctu- contrast, in the south eastern region of the country where ated between 47 percent and 57 percent in the period the topography is relatively flat, water often comes from pol- under review (2002–2009). These fluctuations are mostly luted rivers or from standing pools. This puts the rural pop- caused by differences in measurement techniques. For in- ulation at a high exposure to waterborne diseases such as stance, the drop between the MICS2 survey (54 percent ac- cholera and typhoid. People in rural areas spent more time cess in 2000) and the MICS3 survey (47 percent in 2005) has on getting water than urban dwellers (see Table 3). been attributed to better trained enumerators and better ac- cess to certain areas, leading to more accurate data than had Water quality is a problem—mainly due to bacteriologi- been collected before. Improved water sources are defined cal contamination—but data are scarce. A country wide as those relatively free of disease-causing pathogens and study in 2008 on water quality funded by UNICEF showed include: piped water into dwelling/yard/plot, public taps/ that wells were more susceptible to bacterial contamination standpipes, boreholes or tube wells, protected dug wells, than boreholes and protected springs. It comes as no sur- protected springs, and rain water. prise that every year just after the start of the rains there is an outbreak of diarrhea-related diseases in many parts of the Access to improved water sources is considerably higher country. Borehole water samples show high concentration in urban areas than in rural areas. The 2008 Demographic of metals such as manganese and iron. There is no regular and Health Survey (DHS) found that 81.3 percent of urban or routine testing of public water supply, except in Freetown households get their water from improved sources while in where the Guma Valley Water Company (GVWC) tests its own the rural areas the figure is 35.1 percent (see Table 2. Data are supply but no bacteriological testing is performed. There is a Table 1: Trend in Access to Improved Drinking Water Sources (percentage of population) Water Supply 1990 2000 2002 2004 2005 2008 Data source Statistics SL MICS2 SOWC Census MICS3 DHS Use of improved water sources 35 54 57 53 47 50 Sources: Statistics SL, MICS2, SOWC, 2004 census, MICS3, 2008 DHS. 9 waterReport Sierra Leone 3-6-12.indd 9 3/6/12 6:01 PM Table 2: Use of Type of Water Facilities in Sierra Leone (percentage of population) Source of drinking water Urban Rural Total Improved source Piped water into dwelling/yard/plot 19.3 1.0 7.1 Public tap/standpipe 24.3 6.9 12.7 Tube well or borehole 5.9 6.3 6.2 Protected dug well 30.1 19.9 23.3 Protected spring 1.6 0.9 1.2 Total Improved Source 81.3 35.1 50.3 Non-improved source Unprotected dug wells 10.8 15.1 13.7 Unprotected spring 2.8 9.0 6.9 Tanker truck/cart with small tank 0.1 0.4 0.3 Surface water 4.3 40.1 28.3 Bottled water, improved source for cooking/washing 0.4 0.1 0.2 Bottled water, non- improved source for cooking/washing* 0.1 0.0 0.0 Total Non-improved source 18.0 64.6 49.2 Missing 0.2 0.2 0.2 Source: DHS, 2008. * Because the quality of bottled water is not known, households using bottled water for drinking are classified as using improved or non-improved source according to their water source for cooking and washing. Table 3: Time to Obtain Drinking Water Figure 1: Main Water Sources Used, by Region (round trip) (percentage of population) (percentage of households) Urban Rural Total 100 Water on premises 30.7 4.5 13.1 Less than 30 minutes 33.0 58.5 50.1 75 30 minutes or longer 32.0 28.2 29.5 50 Percentage using an appropriate treatment 16.1 4.2 8.2 25 method 0 Source: DHS 2008. East North South West Protecting spring Rain-water collection Protected well water testing laboratory located at the WSD-MEWR in Free- Tube well/borehole Public tap/standpipe Piped into yard or plot town that does occasional testing when there is a diarrheal Piped into dwelling disease outbreak. Source: MICS3 2005. National access figures hide large regional differences. The West Region, which includes Freetown, has long been favored in economic development and has higher access to services than the rest of the country (see Figure 1). The bias additional people with access to water services will be re- towards Freetown can also be seen in the analysis of public quired to reach the MDG target of providing 74 percent of expenditure. the population with access to improved water in 2015 (see Figure 2). The large access gap between rural and urban ar- Sierra Leone is unlikely to reach the MDG target on halv- eas implies that much effort has to go into improving ac- ing the number of people without access to improved cess in the rural areas. Further, it should be noted that many water sources by 2015. A steep acceleration in providing of the urban water supply systems are in a serious state of 10 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 10 3/6/12 6:01 PM Figure 2: Access to Improved Water Supply Table 4: Guma Valley Water Company Efficiency between 1990 and 2008 and Trend Line to Reach (in millions liters) the MDG Target (percentage of households) 2006 2007 2008 2009 80 70 Water production 34,504 29,631 27,267 26,321 60 Loss by leakages, theft, and non-billing 31,713 24,921 19,102 18,520 50 Water billed (million liters) 2,791 4,710 8,165 7,801 40 30 Water billed (US$000) 3,100 4,900 4,500 3,600 20 Bill collections (US$000) 1,800 2,200 2,300 2,000 10 0 Source: GVWC management reports. 1990 2000 2010 Note: Figures on losses and consumption are not reliable. No figures are available for the years 2002–2005. Note that these figures do not agree with the financial summary from the audited accounts (Annex 2). Use of improved water sources To reach MDG target Sources: Statistics SL, MICS2, SOWC, 2004 census, MICS3, 2008 DHS. taining through water tariffs and it receives no GoSL subsidy. However, over the years GVWC has failed to be financially vi- able; its revenue is severely reduced by low billing and non- disrepair and will require rehabilitation to maintain current payment of bills, combined with low tariffs. GVWC data show access figures. that for the period from 2006 to 2009, only 10 percent of the water produced was paid for (see Table 4). The cash shortfall was made up by World Bank loans, of which Le 47.4 billion 3.2 Urban Water Supply Sector (US$16 million) were written off in 2007. For more informa- Performance tion on GVWC see Annex 2. Two utility companies provide water supply and sanitation services in urban areas in Sierra Leone: the Guma Valley Wa- The billing ratio has improved from under 10 percent ter Company (GVWC) and the Sierra Leone Water Company in 2006 to 30 percent in 2009. Although billing has im- (SALWACO). proved, 70 percent of water produced is still not billed (see Figure 3). It is not possible to separate out the losses due to leakages, theft and non-billing from company records. In 3.2.1 Guma Valley Water Company 2008, leakages were estimated at 45 percent of the distri- Water supply facilities have not kept up with rapid pop- bution input.10 Stand posts in Freetown provide water for ulation growth during the period of civil unrest. In the free. Earlier payment systems (e.g. levy of water rates on capital city of Freetown, 38 percent of properties have house all households within 100 yards of a stand post, monthly connections. In addition, the Guma Valley Water Company payment cards costing Le 1,500 (US$0.55) per month) was has over 500 stand posts in Freetown. Almost no customers abandoned in 2006. Only 2,000–3,000 out of 18,000 have get a 24-hour supply. The average daily output of the Guma functioning meters and are billed on usage while the rest Dam (18 million gallons/day) does not meet all the demands are billed monthly on a fixed tariff. of the population in the city. In 2006, the rains were late and the reservoir was practically emptied. Climate change is like- Freetown tariffs are only a quarter of tariffs for similar ly to increase rainfall variability. urban water supplies in West Africa.11 The domestic tariff in October 2006 is shown below (Table 5). Over the period from 2002 to 2009, actual revenue col- lection of the Guma Valley Water Company covered only 61 percent of total expenditures. GVWC is a registered 10 Consulting Engineers Atkins (2008) Strategic Water Supply and Sani- company that maintains its accounts on an accrual basis, tation Framework. and submits annual audited accounts in accordance with 11 GVWC – Sub-Regional Comparison of Water Supply Tariffs (2006). international standards. Its financial policy is to be self-sus- Study by PWC under World Bank funding. Sector Performance of Water Supply and Sanitation Sector | 11 waterReport Sierra Leone 3-6-12.indd 11 3/6/12 6:01 PM Figure 3: Billing and Collection Ratios for GVWC, Table 5: Freetown Domestic Water Tariffs, October 2006–2009 2006 (US$) 70% Monthly demand charge, on size of connection ½“ US$ 1.69 60% ¾� US$1.91 50% 1� US$ 2.54 40% >1� US$ 5.00 30% 20% Monthly volume charge 0–9.09 m3 0.10/m3 10% 9.09–13.64 m3 0.12/m3 0% 13.64–22.73 m 3 0.19/m3 2006 2007 2008 2009 22.73–27.28 m3 0.24/m3 Billing ratio Collection ratio 27.28 + 0.33/m3 Energy-related surcharge – by area from $0.04–$0.12/m3 Source: GVWC data. Source: GVWC. Only half of the amounts billed are collected due to a low payment and bad services. Householders are unwilling culture of non-payment. At the close of 2009, arrears to pay for bad services, which are due, in turn, to irregular were almost Le 9 billion (US$3 million). An analysis as of De- power supply to the pumps and the high cost of generator cember 2008 showed that arrears by residential customers fuel for a low customer base. As a consequence, the utility comprised 30 percent, by commercial/industrial customers cannot invest in improving services. This problem is particu- comprised 57 percent, by government, 12 percent, and by larly severe in those systems that require pumping, such as other institutions, 1 percent. GVWC is trying to improve its in the town of Bo. In other towns (e.g. Kenema and Makeni) bills collection from government institutions by presenting supply is gravity fed and operating costs are lower. Tariffs are unpaid bills directly to MOFED for direct payment out of the universal across the country. Coverage varies from 1.5 per- ministries’ budget allocations. cent (Bo) to 14.9 percent (Lungi) (see Table 6). SALWACO has been under nearly constant reform ever 3.2.2 Sierra Leone Water Company (SALWACO) since its establishment in 2001. SALWACO was estab- SALWACO provides services to a small percentage of lished in 2001 as a statutory body under MEWR. During its the population in a number of secondary towns while first few years, management was contracted out. A Board of most households get water from dug wells, which are Directors was established in December 2006 and a Direc- often unprotected. SALWACO is caught in a vicious circle of tor General recruited in May 2007. Since then, an organiza- Table 6: SALWACO Performance in Provincial Towns, 2008 Number of functioning Number of stand Number of stand Town Number of houses house connections % houses connected posts posts working Bo 8,012 122 1.5% 20 Nil Kenema 8,000 850 10.6% 14 6 Makeni 3,932 141 3.6% 25 10 Lungi 2,350 350 14.9% 25 12 Koidu/New Sembelun NA NA NA NA NA Kabala NA NA NA NA NA TOTAL 22,294 1,463 6.6% 84 28 Source: SALWACO. 12 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 12 3/6/12 6:01 PM tional structure and salary structure have been established, ral WSS sub-component of the World Bank Power and procedures and manuals have been written, assets and li- Water project, despite its lack of a formal mandate. As abilities have been inventoried, and the accounts and audit of February 2010, 120 boreholes had been completed with brought up to date. Of a total staff of 178, 126 are decen- hand pumps (against a target of 200) and 145 hand-dug tralized to the regional offices in Bo, Kenema, Makeni and wells (out of 430). The completed facilities will provide safe Lungi.12 water to about 150,000 rural people in the towns of Bo, Bom- bali, Kenema, and Tonkolili. An independent review found many shortcomings in the work done, and contracts were 3.3 Rural Water Supply Sector suspended pending correction of faults. Performance Progress in rural areas has been obstructed because 3.4 Use of Improved Sanitation of the slow decentralization of responsibilities and re- Facilities sources to local councils. The WSD has a decentralized structure with about 160 staff decentralized to 13 district Access to improved sanitation is low but changes in councils to provide technical support to local councils. The definitions make it impossible to observe trends over district staff report to the MEWR head office in Freetown, not time. In 2008, only just over ten percent of households in to their respective councils. Both the LGA and the NWSP en- Sierra Leone had access to improved, not shared sanitation visage the discontinuation of WSD operations in the districts. facilities. An improved sanitation facility is one that hygieni- This implies the transfer of their operational personnel and cally separates human excreta from human contact. The budget to local councils. It is not expected that SALWACO main change in definition over time has been the inclusion and the Environmental Health Division (EHD) will devolve or exclusion of shared facilities. For instance, 29 percent of their functions or personnel. the improved sanitation reported in the MICS3 survey re- fers to shared facilities (See Table 7). This follows the NWSP There are various guidelines on the construction of wells definition of ‘adequate’ sanitation, which is described as and latrines The WSD-MEWR has a drawing of a typical well the provision and maintenance of systems or facilities of and the Ministry of Health and Sanitation (MHS) produced disposing of human excreta, waste water, and household in 2009 guidelines for the construction of wells and latrines. refuse, which are acceptable and affordable to the Sierra SALWACO has its own guidelines. The National Policy refers Leone communities. This definition includes shared fa- to the need to get stakeholders to agree on the basic level cilities where the technology is acceptable. The 2008 DHS of service for rural water supply in terms of per capita con- survey followed the UNICEF/WHO Joint Monitoring Pro- sumption, maximum distance of water points, and persons gram (JMP) definition of improved sanitation that excludes served per outlet. shared facilities of any type. These disparities among defi- nitions of access make it impossible to determine change Changing responsibilities and weak accountability over time. have hindered effective rural water supply service de- livery. From 1963 to 2001, the WSD was responsible for all water supplies outside Freetown. A Rural Water Supply Unit Table 7: Access to Sanitation was established within the Division in 1981. Rural water (in percentage of population) supplies were devolved under the Local Government Act, 2004. However, local governments were not provided with   1990 2000 2002 2005 2008 the human or financial resources to take up their new re- Data source Statistics SL MICS2 SOWC MICS3 DHS sponsibilities. WSD provides technical support to the local councils through a decentralized structure with about 160 Access to 35 63 39 29 13 sanitation staff, including 80 technical staff, decentralized to 13 district councils. Sources: Statistics SL, MICS2. SOWC. MICS3, and DHS. SALWACO has constructed rural water supply facilities in the past years as the implementing agency for the ru- 12 Philip Lansana (August 2008) An Overview of SALWACO. Sector Performance of Water Supply and Sanitation Sector | 13 waterReport Sierra Leone 3-6-12.indd 13 3/6/12 6:01 PM Access to sanitation is nearly non-existent in rural areas, Figure 4: Type of Household Sanitation Facility while one quarter of urban dwellers has access to im- Used, by Region proved sanitary facilities. In urban areas, 26.1 percent of (% of households, includes shared facilities) the population has access to improved sanitation. Only 0.1 percent of Sierra Leoneans are connected to the only sewer- 75 age system in the country—an approximately 4 kilometer- long system serving the Freetown Central Business District. 50 Others are served by on-site facilities, such as flush toilet to septic tank or pit latrine or just pit latrines. Only 6.5 percent 25 of the rural population has access to improved sanitation. This is of great concern, especially as 30.1 percent are prac- 0 East North South West ticing open defecation. Poor sanitation and lack of hygienic practices greatly increase the risk of infection by water borne Composting toilet Pit latrine with slab VIP latrine diseases (See Table 8). Flush to pit latrine Flush to septic tank Flush to piped sewer system There are huge regional disparities in access to sanita- Source: DHS 2008. tion. According to the MICS3 survey (which includes shared facilities), the highest percentage of the population using sanitary means of excreta disposal is the Western region, at 71 percent, while the lowest was the Eastern region, at 20 Despite measurement issues, it is clear that Sierra Le- percent (Figure 4) one will meet neither the MDG sanitation target nor the national sanitation target by 2015. The difference in definition between ‘adequate’ sanitation (NWSP—including shared facilities) and ‘improved’ sanitation (JMP—excluding Table 8: Sanitation Access by Type of Facility shared facilities) and the changes in measurements for the in 2008 (in percentage of population) various household surveys, together make it hard to exactly define how big the gap is to achieve national and interna- Urban Rural Total tional standards. However, Sierra Leone is not on track to Improved, Flush/pour flush to piped sewer 0.3 0 0.1 reach the sanitation targets under either of these definitions. not shared system facility Flush/pour flush to septic tank 8.0 0.1 2.7 Flush/pour flush to pit latrine 1.3 0 0.5 Ventilated improved pit (VIP) latrine 6.5 2.3 3.7 Figure 5: Trend in Access to Sanitation and Pit latrine with slab 10.0 4.1 6.0 Trendline to Reach MDG and National Target Total improved, not shared 26.1 6.5 13.0 facility (in percentage of population) Non- Any facility shared with other 47.9 21.8 30.4 70 improved households 60 facility Flush/pour flush not to sewer/septic 0.6 0 0.2 50 tank/pit latrine 40 Pit latrine without slabs/open pit 16.1 37.5 30.5 30 Bucket 0.4 0.1 0.2 20 10 Hanging toilet/hanging latrine 2.7 3.0 2.9 0 No facility/bush/field/stream/river 4.6 30.1 21.7 1990 2000 2010 Other 0.5 0.3 0.4 Use of improved to reach NWSP to reach Non-improved facility 73.9 93.5 87.0 sanitation (in percent) target MDG target Missing 1.2 0.7 0.8 Source: DHS 2008. Sources: Statistics SL, MICS2. SOWC. MICS3, and DHS 14 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 14 3/6/12 6:01 PM An—unrealistically—steep increase in the pace of providing 3.6 Rural Sanitation Sector access to sanitation will be required in both urban and rural Performance areas (Figure 5). Besides the households themselves, the Environmen- tal Health Division (EHD) of the Ministry of Health and 3.5 Urban Sanitation Sector Sanitation (MHS) is the main sanitation service provider. Performance It consists of a number of units, including the Housing and Vector Control Unit, which undertakes inspections of houses In 2008, only 26 percent of the urban population had and compounds with regard to maintenance of latrines and improved (not shared) facilities, mainly pit latrines with elimination of mosquito breeding grounds. There is also a slab. The only sewerage network service in the country is Water and Sanitation Unit, which undertakes hygiene educa- a short length of sewer in downtown Freetown for which tion programs and trains District Sanitary Inspectors, who are no one takes responsibility. Non-network services consist of responsible for monitoring outbreaks of disease and taking sludge removal. The Freetown City Council, the Army, and preventive measures. The Unit is responsible also for water Police each have vehicles for desludging septic tanks and la- quality testing, but lacks capacity. The EHD also fields Envi- trines. Apart from these, there are two or three commercial ronmental Health Assistants (EHA) at 178 Community Health operators within the City of Freetown. These tend to serve Centers. At present, there are 135 EHAs in post, though the mainly commercial, institutional and the more affluent do- National Health Sector Strategic Plan 2010–2105 estimated mestic properties because of high demand. The vehicles are the need for EHAs at some 300. second-hand and suffer frequent breakdowns exacerbated by lack of spare parts. Charges range from US$50 –US$100, Despite MHS’ overall responsibility for sanitation and depending on the size of pits and distance from the sludge devolution to the LCs, safe excreta disposal has been disposal site. There is only one site for faecal sludge disposal relatively neglected. District Health Departments preach in Freetown, located at Kingtom near the solid waste dispos- good hygiene but do not enable it, nor is there any central al site. The existing sludge disposal facilities consist of two government grant for this purpose. Sanitation is still seen parallel lagoons designed for intermittent operation. The site in terms of garbage disposal and a purely urban need. As is, however, in need of complete renovation or reconstruc- such, few LCs, if any, have a Sanitation Department. The sol- tion. The majority of latrines are cleared manually as many id waste grant which is provided to each of the LCs by the pits are unlined and prone to collapse if mechanical equip- central government is actually managed in various ways: by ment is used. Emptying is usually done by small unregulated the Health Department, Health Committee, District Medical groups. Sludge removed is buried within the owner’s com- Officer, District Health Management Team or Environmental pound. This could pose significant health or environmental Health Officer. Some LCs, such as in Bo, Kono, and Koinadu- hazard especially in the event of flooding. gu, have WATSAN Committees at the district level. Although it has no mandate in rural areas, SALWACO has constructed Urban sanitation has suffered from a lack of prioritiza- rural sanitation facilities in the past years as an implementing tion and a lack of clear assignment of responsibilities. agency for the rural WSS sub-component of the World Bank Until recently, sanitation was not a popular subject at any Power and Water project. To date, 84 institutional latrines for level and tended to be identified with the removal of solid schools, hospitals and markets have been completed (out of waste, with little attention to liquid waste. In addition, there a target of 100) and 2,000 household latrines (out of 2,240). has been confusion on whether responsibility should fall These have provided adequate sanitation facilities to 40,200 under the Ministry of Health, Environment Commission, lo- people (against a target of 50,000). Community training had cal government, or the Ministry responsible for water. Under been given to 569 persons against a target of 630. the Local Government Act, urban sanitation is devolved to the Freetown City Council and the various city councils in It is too early to measure results of the Community- the provinces. However, the corresponding personnel and Led Total Sanitation (CLTS) approach that the govern- budgets have been retained by central agencies. The exist- ment adopted for rural areas in 2008, with support ing capacity and skills, though inadequate, have not been from UNICEF and NGOs. Communities are sensitized to devolved. The lack of organizational clarity is matched by a the need for good sanitation and encouraged to build lack of performance data for this subsector. their own latrines. This approach is based on affordability Sector Performance of Water Supply and Sanitation Sector | 15 waterReport Sierra Leone 3-6-12.indd 15 3/6/12 6:01 PM by individual household and avoids subsidies, which have materials in the construction of pit latrines is also encour- proven ineffective and unsustainable. The program targets aged. The approach is supported by the 2008–2012 PRSP. whole communities, promoting the need for full com- Started in 2008, after one year 442 communities were de- munity participation in initiating latrine construction, use clared open defecation-free. However, it is too early to tell and maintenance in addition to good hygiene practices whether these results can be scaled up and are sustainable such as hand washing. The development and use of local over time. 16 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 16 3/6/12 6:01 PM 4. Public Expenditure on Water and Sanitation T his chapter inventories budgeted and actual expendi- the budget is allocated to MEWR Water Services Department ture on water and sanitation (paragraph 4.1 and 4.2). (see Table 9). A distinction is made between internal and external resources (paragraph 4.3). Paragraph 4.4 analyzes the al- The Integrated Financial Management Information Sys- location of public expenditure on water and sanitation. tem (IFMIS) is not yet fully utilized which makes identifica- This includes looking at how much is being spent in rural tion of WSS expenditures problematic. The IFMIS classifies areas and in urban areas, on water supply and on sanita- expenditures by chief ministry, department, or agency (MDAs), tion, on recurrent costs and on capital expenditure. The division of an MDA, program (mainly organisational unit within chapter closes by putting public expenditure on water and a division), source of funds, district (where expenditures can be sanitation in Sierra Leone in a broader perspective, bench- identified with particular districts), and object code (economic marking it to other African countries (paragraph 4.5) and classification). There is also room in the accounts code for a by comparing it to investment needs to achieve the MDGs classification according to the categories used in the PRSP, but (paragraph 4.6). this is not yet in use for budget execution. The expenditure analysis includes three programs that 4.1 How Much is Budgeted for Water can be directly identified with WSS in the IFMIS.13 The IF- and Sanitation? MIS categories included are: Total GoSL WSS sector budget was US$24.9 million over 13 From June 2005. Before then the Accountant General operated eight years, or about US$3 million per year. These figures the Financial Management and Accounting System, which classified include the central government Consolidated Fund (CF) expenditures by division, program and object, but not by district or managed by the Accountant General. Over 80 percent of source of funds. Table 9: GoSL Budget for the Water and Sanitation Sector between 2002 and 2009 (in Le million) Budget line 2002 2003 2004 2005 2006 2007 2008 2009 Total MEWR Water Services Department, code 16,486 3,954 4,307 10,687 4,079 5,368 5,132 6,767 56,779 406-0002 MOFED Rural Water Services Grant to Local — — — — 700 770 785 805 3,060 Councils, code 701-2019 MHS Environmental Health (Sani) & 997 1,884 631 195 232 295 611 668 5,514 Entomology, code 304-2005 TOTAL in million Leones 17,483 5,838 4,937 10,882 5,011 6,434 6,528 8,240 65,353   In US$ (000) $ 8,329 $ 2,489 $ 1,828 $ 3,765 $ 1,692 $ 2,155 $ 2,190 $ 2,424 $ 24,872 Sources: Government budgets 2002–2009 and author’s calculations. 17 waterReport Sierra Leone 3-6-12.indd 17 3/6/12 6:01 PM ■ MEWR Water Services Department, code 406-0002 ■ Ministry of Transport and Aviation, part of Meteorologi- ■ MOFED Rural Water Services Grant to Local Councils, cal Services program, 404-0202 code 701-2019 ■ MHS Environmental Health (Sanitation) & Entomology, code 304-200514 4.2 How Much is being Spent? Total sector expenditure was US$51 million over eight The expenditure analysis excludes cross-sectoral pro- years, or US$6 million per year. These figures include the grams for which WSS expenditures cannot be defined. central government Consolidated Fund managed by the Ac- WSS expenditures cannot be identified in these divisions/ countant General, funds provided by donor agencies under programs and have not been represented in the expenditure agreements to which GoSL is a signatory, and expenditures analysis. The following divisions or programs (that include a from local councils from their own revenues. General gov- relatively small number of activities relating to WSS) have not ernment spending on WSS has been increasing since 2002 been taken into account: in absolute value. ■ Ministry of Youth, Education, and Sports (MEYS) Primary, Public expenditure on WSS 2002–2009 represented 2.4 Secondary, and Tertiary Education, which include ex- percent of total public expenditure and 0.2 percent of penditures on construction/rehabilitation of WSS facili- gross domestic product. As Table 10 shows, expenditure ties in schools and other educational institutions on WSS as a share of total government expenditure peaked ■ Ministry of Health and Sanitation, Primary, Secondary in 2006 and has since stabilized at around 2.0 percent. As a and Tertiary Health Care, which include expenditures share of GDP, WSS expenditure peaked also in 2006 and has on construction/rehabilitation of WSS facilities in clinics since stabilized at around 0.2 percent (Figure 6). and hospitals ■ Sierra Leone Environmental Protection Agency ■ Ministry of Mineral Resources, part of Geological Sur- 4.3 Sources of Funding veys Division 403-02 From 2002 to 2009, approximately 81 percent of WSS ■ Ministry of Internal Affairs, Local Government, and Rural expenditures were funded from external sources. The Development (MIALGRD), part of Community Develop- Consolidated Fund15 funded about 19 percent of all sector ment Directorate 107-00 ■ Ministry of Lands, Country Planning and the Environ- 14 This Division includes units for water and sanitation (education and ment, part of Surveys and Lands program 306-0003 sensitization only), vector control and compound inspection, and med- ■ Ministry of Agriculture and Food Security, part of Land ical waste disposal. and Water Development Division 401-04 15 The Consolidated budget includes budget support received from donors. Table 10: Public Expenditure in Water and Sanitation Sector between 2002 and 2009 (in Le million) Expenditure category 2002 2003 2004 2005 2006 2007 2008 2009 Total Internal resources MEWR 3,597 3,554 3,954 1,911 2,124 1,492 2,471 3,535 22,638 MHS — — — — — 214 253 438 905 Local council expenditure* — — — — 700 82 785 787 2,354 Total internal resources 3,597 3,554 3,954 1,911 2,824 1,787 3,509 4,760 25,897 External resources NA NA 4,670 15,852 38,587 24,426 18,553 22,564 124,651 TOTAL WSS In million Leones 3,597 3,554 8,624 17,763 41,410 26,214 22,062 27,324 150,561   In US$ (000) $ 1,713 $ 1,516 $ 3,193 $ 6,147 $ 13,873 $ 8,782 $ 7,401 $ 8,036 $ 50,768 Sources: Government accounts, Development Assistance Database and donor country offices. * Actual expenditure by local councils. Since 2006, MOFED has made small grants to the 13 district councils for rural water supply. However, the expenditure of local councils on water and sanitation does not always equal the amounts of transfers provided. 18 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 18 3/6/12 6:01 PM Figure 6: Water and Sanitation Sector Weight in Government allocations to WSS have increased over time. Total Public Expenditure and GDP Government priorities, as expressed in Medium-Term Expendi- ture Frameworks (MTEFs) and annual budgets, have not always 5.0 4.5 been followed. However, there is a clear trend to increased al- 4.0 locations and expenditure on water and sanitation since 2007. 3.5 3.0 While it was below US$ 1 million before 2007, government Percentage 2.5 expenditure reached US$ 1.4 million in 2009. The MTEF 2010– 2.0 1.5 2012 indicates a continued climb in internal resources. 1.0 0.5 0.0 WSS expenditures funded from external sources peaked 2002 2003 2004 2005 2006 2007 2008 2009 in 2006. Donor spending in the sector has sharply grown be- % of total expenditure % of GDP tween 2003 and 2006 from almost nothing to US$ 13 million in 2006. After that, as the country became more stable, donor 2002 2003 2004 2005 2006 2007 2008 2009 funding was significantly reduced. On average, donor spend- % of total ing in the sector has been close to six million a year. All do- expenditure 0.8 0.7 1.6 2.9 4.5 3.3 2.0 1.9 nor funding has been grants, except for a World Bank credit to % of GDP 0.1 0.1 0.1 0.2 0.4 0.2 0.2 0.2 GVWC. This could not be repaid and the World Bank provided a $15.9 million debt relief to GVWC. It is too early to tell whether Sources: Government Accounts 2002–2009 and IMF 2009 World Economic Outlook. the drop in donor financing between 2007 and 2009 is indica- tive of a long-term trend, or whether it is an anomaly. Signifi- cant forward commitments have been made by some donors. spending with grants to local governments representing DFID was the largest donor for the period under review, less than two percent of all sector spending. Since 2007, the followed by the World Bank and UNICEF. Ten donors pro- trend has been an increasing national share, rising to 18 per- vided significant sector financing to Sierra Leone in this peri- cent in 2009, based on provisional data (see Figure 7). od, either through the GoSL or through NGOs (see Figure 8). Figure 7: Donor Spending and Government Spending between 2002 and 2009 (average percentage of total expenditures to the left and year by year absolute variations to the right) 14,000 Identi�ed WSS spending (US$ thousnds) Government 12,000 spending 10,000 8,000 Donor spending 6,000 4,000 2,000 0 2002 2003 2004 2005 2006 2007 2008 2009 Average % Total In US$ thousands 2002 2003 2004 2005 2006 2007 2008 2009 2002–2009 Government spending 1,713.4 1,515.7 1,463.9 661.3 953.5 598.8 1177.4 1399.9 18.7 Donor spending 0 0 1,728.9 5,485.2 13,027.3 8,182.8 6,223.7 6,636.5 81.3 Total WSS Spending 1,713.4 1,515.7 3,192.8 6,146.5 13,980.8 8,781.6 7,401.1 8,036.4 100.0 Sources: Government Accounts 2002–2009, Development Assistance Database and donor country offices. Public Expenditure on Water and Sanitation | 19 waterReport Sierra Leone 3-6-12.indd 19 3/6/12 6:01 PM Figure 8: Donor Expenditure 2002–2009, by Donor sector participation (PSP) in development and provision Agency of WSS services, particularly in Freetown. However, given the current operating losses of GVWC, private operators will probably only step forward if tariffs are increased or government subsidies are provided. Even then it would be more likely that a PSP arrangement in Freetown would focus on bringing private know-how rather than private capital, for instance through a management contract or an affermage. 4.4 How is Spending Allocated? Despite data problems, it is clear that water supply re- ceives the vast majority of sector spending, with only AfDB DFID EC IDB Irish Aid a small percentage (less than 10%) allocated to sanita- JICA UNDP UNICEF USA World Bank tion. While some expenditures could easily be identified as water supply, others cover both water supply and sanitation Source: DAD, and donor country offices. and cannot be easily identified by subsector. This comes as no surprise as the sanitation sector is dominated by house- hold on-site facilities (latrines, septic tanks) which are gen- erally financed from household expenditure. Sewerage and wastewater treatment (normally financed from public bud- 4.3.1 Private Sector Financing and Cost Recovery gets) are virtually non-existent. Unlike the water supply sub- Cost recovery from household network services has not sector, for which leadership and coordination responsibilities covered operating costs. Over the eight years 2002–2009, are unambiguously attached to the Ministry of Energy and GVWC collected US$30.7 million from Freetown custom- Water Supply, fragmented responsibilities and lack of clear ers, and SALWACO collected US$0.7 mi1lion in other towns. leadership among different ministries characterizes the sani- These amounts covered only part of their costs (see para- tation subsector, which may partly explain why so little fund- graph 3.2.1 above). Going forward, the NWSP (sec. 3.2.10) ing went to the subsector. It was not possible to further clas- states that tariffs will be adjusted to recover operating costs, sify WSS expenses by functional categories.16 and mechanisms established to ensure timely payment of water bills. However, increasing tariffs, billing, and collection Approximately sixty percent of public expenditure in at the same time might be politically unattainable. In rural the review period was targeted at rural water supply, areas, donor agencies have generally constructed water and nearly all of it from donors. Local council transfers for ru- sanitation facilities without cost recovery. ral water supply represented less than eight percent of the Consolidated Fund WSS budget and less than two percent However, household investments in on-site services are of total public expenditure (combined internal and exter- considerable. Considerably more households in urban ar- nal resources). A part of the Consolidated Budget spent by eas report having access to water supply in household sur- MEWR and MHS will have been spent on rural water supply, veys than the number of household connections by GVWC although it is impossible to determine exactly how much. and SALWACO. This reflects the fact that many households However, the total MEWR and MHS budget accounts for only have dug wells or built other water facilities using their own a few percentage points of the Consolidated Budget. At least resources. For sanitation, households have also made invest- ments in pit latrines and septic tanks—which account for the vast majority of current access. 16 WSS cuts across three COFOG functions and six sub-functions as follows (705 Environmental protection, including 7051 Waste manage- There is no formal private sector financing in the WSS ment; 7052 Waste water management; 7053 Pollution abatement; 706 Housing and community amenities including 7062 Community devel- sector and data on expenditures by informal private opment and 7063 Water supply, and 707 Health, including 7074 Public providers are not available. The NWSP envisages private health services) 20 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 20 3/6/12 6:01 PM 60 percent of donor financing was targeted at rural areas the poor, increasing access to water and sanitation facilities is during the review period.17 among the GoSL’s development priorities, as expressed in the 2005 poverty reduction strategy paper. While public spend- Due to limited data availability, spatial allocation of pub- ing on education and health sectors has been substantial lic expenditures could not be analyzed. However, there over the review period, the share of public resources spent on are good indications that most of the water supply subsec- water supply and sanitation remained relatively low. Figure 9 tor funding went to urban areas covered by SALWACO and compares public expenditure on WSS to that on health. Public GVWC. Per capita public expenditure is higher in the Western expenditure on health between 2003 and 2008, as a share of Region, likely because Freetown is located there. GDP, was on average seven times the public expenditure on water and sanitation. However, while health expenditure has Grants to SALWACO fund provincial town water supplies fluctuated a lot, WSS expenditure has been relatively stable. and account for 76 percent of Consolidated Fund expen- ditures for 2005–2009. Approximately 20 percent of the Execution rates have been lower in the water and sani- Consolidated Funds expenditure is on salaries. GVWC (which tation sector than in other priority and poverty reduc- supplies water in Freetown) has not been funded from the CF. tion sectors. A comparison of spending efficiency in the Subsidies from the CF were mainly used to cover operating WSS sector to that in all poverty reducing sectors shows that losses rather than being targeted at network expansion. Donor execution rates have been lower for WSS than for poverty financing was not biased towards urban areas but generally followed population spread between urban and rural areas. Most internal resources went toward recurrent expendi- Figure 9: Public Expenditure in WSS Sector as tures, while most donor financing went toward capital Compared to the Health Sector expenditure,18 which means that approximately 80 per- cent of total WSS expenditures went toward capital ex- 2.5 penditure. For internal resources, public spending analysis is 2.0 only possible for the years 2006 to 2009. For these years only 1.5 Percentage one percent of expenditures could be identified as capital 1.0 expenditure, while the overwhelming portion of expendi- tures could be identified as recurrent. For external resources, 0.5 no data are available the split between recurrent and capital 0.0 expenditures. However, given that most donor policies ex- 2002 2003 2004 2005 2006 2007 2008 clude funding for recurrent expenditures, one can assume Health expenditures WSS expenditures that most external funding went to capital. While an 80–20 split between capital and recurrent expenditures is not un- 2002 2003 2004 2005 2006 2007 2008 reasonable, the de facto division between internal resources Health for recurrent expenditure and external resources for capital expenditures 0.8 2.3 1.5 1.9 1.5 0.9 1.3 expenditure leaves the country WSS capital base vulnerable WSS expenditures 0.1 0.1 0.1 0.2 0.4 0.2 0.2 to changes in available donor resources. Sources: MoFED Sierra Leone and World Bank (2010) Sierra Leone PER 2009. 4.5 Benchmarking WSS Public 17 The 60 percent includes an unknown amount of sanitation financ- Expenditures in Sierra Leone ing. Another 25 percent of donor financing was identified as urban WSS, while 15 percent could not be identified. 4.5.1 Benchmarking WSS Sector to other Priority Sectors 18 Though the Government Budgeting and Accountability Act, 2005, requires integrated budgeting and accounting (recurrent and develop- Public expenditures on water and sanitation is consider- ment together), this has not yet been achieved, as donor agencies are ably lower than that in other priority sectors, but internal unable to report project expenditures in the IFMIS classification, which includes GFS-compliant economic and functional classifications. This is- financing resources has been relatively stable. Along with sue is being addressed in the Integrated Public Financial Management expanding basic education, health, and affordable housing for (PFM) Reform Program. Public Expenditure on Water and Sanitation | 21 waterReport Sierra Leone 3-6-12.indd 21 3/6/12 6:01 PM Table 11: Execution Rates for Priority Poverty Reducing Sectors Compared to Overall Execution Rates (in %) 2002 2003 2004 2005 2006 2007 2008 2009 Water Supply and Sanitation sector 21 61 80 18 56 28 51 58 Priority Poverty Reducing Expenditures 75 100 77 91 89 57 95 NA Overall budget NA 56 119 132 95 64 60 107 Source: Annex 1, World Bank (2010), Sierra Leone Public Expenditure Review 2009, p.32. reducing spending as a whole in every year except 2004 (see Figure 11: Shares of Internal and External Table 11). Disbursement rates for the overall GoSL budget Financing in WSS Expenditures in a few African were high, with disbursement of over 100 percent for years Countries 2004 and 2005, and of 95 percent for 2006. Central African Rep. 13.2 86.8 4.5.2 Benchmarking Sierra Leone to other African Sierra Leone 18.7 81.3 Countries Togo 46.8 53.2 Tanzania 26.0 74.0 Public expenditure on WSS in Sierra Leone as a percent- Democ. Rep. of Congo 7.4 92.6 age of GDP is comparable to other sub-Saharan African Republic of Congo 87.8 12.2 countries. Public expenditure in the Sierra Leone water and Mozambique 13.0 87.0 sanitation sector was compared with other countries for which comparable WSS public expenditure reviews were 0 20 40 60 80 100 120 also conducted, including Togo, Republic of Congo, Demo- Percentage of External Financing Percentage of Internal Financing cratic Republic of Congo, Tanzania, Central African Republic and Mozambique (Figure 10). Public expenditure on WSS in Sources: MoFED Sierra Leone and WSS PER of Togo, Tanzania, DRC, Republic of Congo, Central Sierra Leone as a percentage of total government expendi- African Rep. and Mozambique. ture was also about the average for sub-Saharan Africa. Sierra Leone is as heavily dependent on external re- ply and sanitation sector as are most other African coun- sources to finance public expenditures in the water sup- tries. The part of public expenditure (less than 20 percent on average over the period 2002–2008) for water and sanitation in Sierra Leone is financed from internal resources is about Figure 10: WSS Public Expenditures in Selected the average of the reviewed countries (Figure 11). African Countries The budget execution rate for water and sanitation is Central African Rep. 1.1 below the execution rates in other Sub-Saharan coun- 0.15 Sierra Leone 1.8 tries. A review of eight countries for which data are avail- 0.5 Togo 1.4 able showed that execution of domestically funded sector 0.2 Tanzania 3.3 expenditure averaged 66%, while externally funded expen- 0.9 Democ. Rep. of Congo 2.3 diture averaged 57%. 0.4 Republic of Congo 0.7 0.2 Mozambique 2.9 0.6 4.5.3 Comparing Public Expenditure in Sierra 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Leone to Investment Needs % of Total Gov. Expenditures % of GDP Investment needs to reach the MDGs far exceed the cur- rent level of public expenditure in Sierra Leone. Estimates Sources: MoFED Sierra Leone and WSS PER of Togo, Tanzania, DRC, Republic of Congo, Central differ widely with regard to what investment is needed to African Rep. and Mozambique. achieve the MDGs. Investment needs to meet the national 22 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 22 3/6/12 6:01 PM targets for access to water and sanitation by 2015 vary be- dam taking the lion’s share. These rough estimates translate tween US$195.5 million (Water and Sanitation Program Coun- to an annual investment requirement between US$40 million try Status Overview) and US$520 million (DFID/UNICEF WASH to US$100 million over a period of five years (from now to project). Using WSP Country Overview assumptions, but in- 2015). Even without taking into account the need to finance cluding inflation19 and gross of household and other non- recurrent investments, current public expenditure only cov- government investment, the team estimates capital needs, ers between 10 and 25 percent of these investment needs. excluding development of new supplies, rehabilitation of old systems, operating and maintenance costs, and capacity building costs, at US$397.6 million (Annex 4), or US$57 million 19 Estimates in nominal terms should include inflation (since this also a year. A DFID study has developed an investment plan and has to be funded). Inflation of domestic prices is partly offset by de- financial plan for water and sanitation in Freetown. This totals preciation of the Leone. In the team’s estimate, a discounted rate of 5 to US$328.9 million over a period of 10 years, with the Orugu percent per annum has been used. Public Expenditure on Water and Sanitation | 23 waterReport Sierra Leone 3-6-12.indd 23 3/6/12 6:01 PM waterReport Sierra Leone 3-6-12.indd 24 3/6/12 6:01 PM 5. Budget Execution and Spending Efficiency T his chapter examines budget execution (paragraph The budget execution for the grants to local councils 5.1). It then analyzes the budget execution chain to was 71 percent over the period from 2006 (initial year) to explore the obstacles for better budget allocation and 2009. This means that the budget execution rate was higher execution (paragraph 5.2). than that of the Consolidated Fund. No trend can be distin- guished in budget execution rates for grants to local councils, as they varied from year to year. It should be noted that these 5.1 Budget Execution grants are very small for now. Though the data are uncertain, local council spending on water and sanitation was 8 percent Average WSS sector budget execution of the consolidat- more than the transfers from the central government over ed fund stands at 40 percent. In every year in the review pe- the period. riod, expenditure fell short of budget, with the biggest short- falls in 2002, 2005, and 2007 (the latter an election year when The budget variance is not in line with government GoSL was unable to meet the conditions for budget support policy to protect ‘poverty reducing’ or ‘pro-poor’ spend- and did not get the expected grants from its principal donors.) ing from budget cuts. All WSS spending (grants to SAL- (see figure 12). Expenditure deviations appear to be driven WACO, WSD domestic development expenditure, grants to mainly by resource availability and a desire to protect or aug- LCs, and MHS-EHD expenditure, but not the administrative ment administrative expenses. However, the trend is towards costs of the WSD) were included in the definition of poverty lower variance. In 2009, budget variance was 42 percent be- reducing expenditure during the 2002 HIPC Decision Point low budget (ie. the budget execution rate was 58 percent). discussions. Following the re-establishment of local govern- These budget execution rates should be treated with caution ment in 2004, transfers to local councils have been included. because of data gaps, especially on external funding. Nevertheless, these expenditures have not been protected; rather the reverse. In 2007, expenditures on poverty reduc- ing programs reached only 57 percent of the budgeted Figure 12: Budget Execution Rates amount while all other spending reached 72 percent of the budgeted amount.20 Budget execution did not improve in 120 2008, as the fourth quarter transfer to local councils was 100 not made. Improvement was seen only in 2009. It has been 80 recommended that transfers to the LCs be made statutory 60 transfers that could be pegged to a share of revenue in the 40 same manner as the transfers to The National Revenue Au- 20 thority (NRA) or the Road Fund.21 0 2002 2003 2004 2005 2006 2007 2008 2009 GOSL budget execution rate (%) Execution rate budgeted grants to LCs (%) 20 This calculation omits salaries, statutory transfers to NRA and the Road Fund, interest, and externally funded project expenditure. Sources: Government Accounts 2002–2009 and author’s calculations. 21 World Bank (2010) Public Expenditure Review, p.52. 25 waterReport Sierra Leone 3-6-12.indd 25 3/6/12 6:01 PM 5.1.1 Transfers to Local Councils have not actively expressed discontent with the allocations Since 2006, MOFED has made small grants to the 13 formulae as they may be able to disregard them to some de- district councils for rural water supply. The allocation gree. The Report also found that LCs play a very minor role in is based on two criteria: the rural population (60 per cent determining budgeted allocations within sectors. weight) and the proportion without access to safe water (40 percent weight).22 During the transition period (2004–2008), Going forward, a new donor-funded program to supple- the transfer system focused on recurrent non-salary expen- ment government transfers is multiplying resources go- ditures of the services devolved to the LCs. Devolving salaries ing into rural water supply. Starting in the first quarter of and capital expenditure is still an issue. 2010, the Decentralized Service Delivery Program26 (DSDP) transfers directly to LC bank accounts a total of US$6.4 mil- The transfers to local councils do not equal pre-devolu- lion over two years as a supplement to the rural water supply tion levels of central government expenditure and central grant. Grants for education, health, and solid waste manage- government budgets have not decreased after de jure ment will also be supplemented. Transfers will be made at a devolution. The Local Government Act stipulated that from set date each quarter irrespective of the timing or amount of 2004 to 2008, the central government must provide the LCs GoSL grants, but will use the same formula as for the GoSL with tied grants that were sufficient to maintain each service grants. These funds will be commingled with GoSL funds, at its pre-devolution standard, and thereafter at “an appropri- and expended and reported-on using LC systems. The only ate standard�. The problem with this statutory obligation has conditions are: (i) expenditures must be within the plans been that the pre-devolution level of expenditure could not and budgets approved by the Councils and consistent with be determined, as ministry expenditures are not classified by national strategies/plans; (ii) transfers will depend on prior activity. A more calculable requirement is that annual changes receipt (by LGFD) of expenditure returns for the previous to total grants should be not less than changes to the budgets quarter; and (iii) expenditures must be of a recurrent nature. of the central government. This has not been respected on Though capital investments are excluded, these resources individual services. Total government expenditure has grown should enable local councils to improve the performance of at an average 16.7 percent a year from 2006 to 2009, while their existing facilities, and thus contribute to achieving na- the rural water grant has crept up only 4.6 percent per an- tional goals and the MDGs. num over the same period. It is noted that the budget of the central ministry for water (MEWR) has increased rather than decreased since devolution officially started in 2005. 5.2 Analysis of Budget Execution Chain Local council transfers are unpredictable and have fall- The Government of Sierra Leone has made significant en short of budgets, Despite the transparency of formula- improvements to its public financial management sys- based allocations, actual transfers to LCs have always fallen tem over the past few years. From 2002 to 2008, many of short and have been highly variable and unpredictable. Fund- the public reforms were targeted to the improvement of ing varies each year according to the resources allocated to budget allocation and the budget execution chain. These central government functions, and transfers are negotiated annually, also depending on total government resources. Re- lease of each quarter’s transfer is contingent on: (i) sufficiency 22 Bonthe Municipal Council is also given a small flat amount out of of overall resources; (ii) protection of this ‘priority’ expenditure the total grant, because of its size. against competing claims; and (iii) receipt by LGFD of the LC’s 23 There are differences between data from LGFD, data from the Ac- accounts for the previous quarter (and any other fiduciary countant General and data from the LCs, reflecting timing differences conditions). Where accounts are late, transfers are delayed. If in the accounting for transfers. 24 For instance, the LGFD Monitoring Report found that Makeni and a transfer is delayed into the following year, there is confusion Kenema City Councils had spent part of their solid waste grant in 2006 as to the appropriate period in which it is accounted.23 on administration. 25 World Bank Group, MOFED (2008), Recurrent Costs of Local Council WSS grants are not always used for WSS expenditures. A Service Provision (Callen Report) further disconnect from policy occurs at the LC level, where 26 The first phase of the DSDP is funded entirely by the World Bank. The grants have not always been fully used or have been used for program is designed on a sector-wide approach so that other donors other purposes.24 The Callen Report25 comments that the LCs may join later. 26 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 26 3/6/12 6:01 PM reforms were needed as more than a decade of civil war not Cost overruns are frequent in works contracts. Donor funding only destroyed infrastructure but also the human capaci- (replenishment of special accounts) typically goes through a ties of the government to properly manage its finances. The dozen signatures before funds are transferred and can take most significant of these reforms over the period are: over a month, as few signatories delegate their responsibili- ties while they are away.28 Delays in counterpart funding also ■ Enactment of the Local Government Act of 2004 which result in project slowdowns. Budgets tend to underestimate re-established 19 local councils. counterpart funding requirements. In addition, budgeted ■ Enactment of the Public Procurement Act of 2004 re- revenues and grants often fall short so that budgeted coun- placing a centralized and wasteful procurement system terpart funds cannot be provided. This can trigger a substan- ■ Enactment of the Government Budgeting and Account- tial reduction in external financing since projects are often ability Act of 2005 geared at a ratio of 3 to 1.29 ■ Adoption of the Integrated Financial Management In- formation System (IFMIS) in 2005 Internal transfers are also unreliable. The subsidy from ■ Rolling out of the IFMIS to a number of Ministries, De- MEWR to SALWACO is released piecemeal and is often very partments, and Agencies (MDAs) late. Grants to LCs are paid by the Accountant General di- ■ Establishment of new institutions such as the National rectly to the sector bank accounts in each LC. These used to Revenue Authority and Internal Audit Units in MDAs; require hundreds of signatures for each grant each quarter, ■ Adoption of the Financial Management Regulations in but a simpler procedure has recently been introduced. 2007 5.2.2 Project Cycle Management Despite the noticeable improvements in the budget execution chain over the past few years, a number of Project appraisal and evaluation are required by law. At hindering factors continue to impede efficient and ef- the central government level, the Government Budgeting fective budget execution. The most significant of them and Accountability Act (GBAA), section 42, makes the Vote are delays, low project cycle management capacities, and Controller (executive head of each ministry, department or expenditure arrears. agency) responsible for the sound evaluation of projects. The annual budget circular calls for the submission of a Medium- Term Expenditure Framework and a budget from each MDA. 5.2.1 Delays An appraisal template is provided for the submission of each Unreliable and delayed funding is damaging WSS prog- new project proposal. MDAs are required to justify the need ress. Progress of WSS development programs, as in other for the project in terms of consistency with the PRSP and sectors, is delayed by unreliable and delayed donor and gov- show that the proposed project is the most effective mo- ernment funding. Even though substantial improvements dality to implement the related policies. The template also were noted in the budget execution chain, MDAs usually requires detailed technical and costing estimates based on experienced delays and uncertainties with the timing and previous similar project performance and current market overall availability of funds for non-salary expenditures. De- prices. Local councils are required by the LGA (sections 85– lays in the approval of the budget by the Parliament ham- 89) to prepare development plans consultatively, starting at pered planning and timely spending on sector strategic ob- jectives. Over the review period, it was only in 2006 (for the 2007–2009 MTEF) that the budget was approved on time. 27 GoSL (2008) Public Financial Management Performance Assess- For the other years, budget approval what granted by Parlia- ment Report, December 2007 (Published in May 2008) ment only in the second quarter, which restricted spending 28 For example a withdrawal application to World Bank is processed abilities of MDAs.27 Donor practices are also of significant hin- by the implementing agency, project implementation unit, the Perma- drance to budget execution in GoSL in general, and in the nent Secretary and Minister in the responsible line ministry, the External water and sanitation sector in particular. Over the review pe- Affairs Division of MOFED, the Financial Secretary or Principal Deputy FS in MOFED, the Expenditure and Contract Management Committee, riod, there was significant volatility in donor disbursements, the Accountant General, and World Bank offices in Chennai and Wash- which decrease the ability of MDAs to spend. This is dam- ington. Delays in MEWR are said to be longer than delays in MOFED or aging to project efficiency and to contractor relations. Costs World Bank. rise with inflation and with stop-start resource management. 29 World Bank (2010) Sierra Leone PER, op. cit. para. 430. Budget Execution and Spending Efficiency | 27 waterReport Sierra Leone 3-6-12.indd 27 3/6/12 6:01 PM ward level. They must be consistent with national plans, but some wells cost more than others (due to remoteness or there are no formal requirements for project appraisal. difficulty of access); some contractors ran out of funds and abandoned their contracts. Mobilization advances of 30 per- Lack of capacity in line ministries and local councils lim- cent are given, but contractors find it difficult to get bridging its sector ex ante project appraisal and ex post project finance to complete their contracts. There is also a lack of evaluation as well as also project implementation. A re- technical capacity. cent UNDP report indicates that “weaknesses in human re- sources are major constraints on WSS in Sierra Leone at all 5.2.3 Expenditure Arrears levels.�30 Years of unrest have caused a flight of profession- als from the sector. Beyond the lack of skills, at all levels the Expenditure arrears are significant across government number of management and technical professionals is far departments but the amount of WSS arrears is not below the requirements. Craftsmen and operators and oth- known. Expenditure arrears are defined as expenditures ers are another category where the insufficiency of human that are due for payment, i.e. goods or services have been resources handicaps the project cycle management. The received or work has been done, and invoices have been re- biggest gaps are within the technical professionals, crafts- ceived, but they are not yet paid. This is partly because the men, and operators categories. For example, in 2005 only verification and payment process takes time, so normally 180 technical professionals (seniors and juniors) and 50 op- there will be a small stock of arrears. Of greater concern, pay- erators and others were in post, compared to a requirement ments may be deliberately delayed, usually for lack of funds. of 913 and 1,565, respectively. The effect, in a cash-based accounting and reporting system as in GoSL and the LCs, is that expenditure is understated. The World Bank 2009 Public Expenditure Review (PER) Also, late payment discourages suppliers from bidding for recommends wider training in project management, government contracts and increases contract prices over the establishment of a central agency dedicated to proj- time. It is not known how big a problem this is with respect ect appraisal, and changes to the legal framework to to the water and sanitation sector. The central government ensure that only projects meeting minimum criteria are makes transfers to the LCs and to SALWACO, but it does not included in the budget. Project proposals should be within count unpaid transfers as arrears, as transfers are not specific expenditure ceilings approved by the Cabinet for each MDA. legal obligations. The budget does not create a legal obliga- Among other things, proposals should show that they have tion to pay; it is only one condition on which payment may been through appropriate consultation with stakeholders, be made. At the level of the LC, it is illegal to make com- safeguards have been applied (such as environmental im- mitments before funds are available to pay, but late transfers pact assessment) where relevant, public and private sector from central government have commonly led to situations roles should have been considered, and proposals should be where the administration makes informal contracts with lo- accompanied by procurement plans. cal suppliers and promises to pay when funds are received. This supplier credit is not reported centrally nor monitored Poor project management and procurement contribute by LGFD, and there are no summary data. to delays in implementation. A major cause of delay is lack of procurement skills and project management capac- ity, both in budget agencies and in the private sector. For 30 UNDP 2009 Country Sector Assessments. UNDP GoAL WaSH Pro- instance, standard price contracts were given by a project gram. Governance, Advocacy and Leadership for Water, Sanitation and implementation unit to each contractor to dig 40 wells, but Hygiene. Volume 1, pp.92–93. 28 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 28 3/6/12 6:01 PM 6. Conclusion and Recommendations How Can Public Expenditure Translate into Better Water and Sanitation Services? T his review shows that despite increases in public 6.1 Running While Standing Still sector spending, access to improved water sources Part of public expenditure in the water and sanitation and adequate sanitation has hardly improved in sector has been used to keep up with population growth the 2002–2009 period. Sierra Leone is unlikely to reach the and displacement. In 1990, Sierra Leone’s population was MDG targets on halving the number of people without ac- just under four million. In 2015, total population is projected cess to improved water sources and sanitation by 2015. Ac- to be just over 7 million—an 80 percent increase. The MDG cess to improved water sources is uneven across the country, targets and GoSL targets are expressed in decreasing the pro- with urban areas being by far better covered than rural areas. portion of people without services. Just maintaining the same Access to adequate sanitation is even more critically uneven. access rate between 1990 and 2015 requires the provision of water supply access to 1.6 million additional people and pro- Total sector expenditure will have to escalate to reach vision of sanitation to 0.4 million additional people. The years the national and MDG targets on water and sanitation. of conflict have caused large groups of population to move, All estimates indicate a major gap between total needs resulting in the need for new services in different places. and committed sources of public funds. Given the huge gap between investment needs and current expenditure, In urban areas, water supply facilities have not kept up Sierra Leone will not be able to afford rapid extension of with rapid urbanization during the period of civil un- water and sanitation services without harmonized support rest. In Freetown, GVWC provides services to only part of the of donors. The Government of Sierra Leone has to be com- population and does not cover its operating expenditure. mended for its strong initiative since 2007 in formulating SALWACO, the utility for other urban centers, serves only a a National Water and Sanitation Policy with participation fraction of their population. by all the stakeholders. However, the share of its internal resources dedicated to water and sanitation is at the bot- Years of conflict and neglect of maintenance have tom end when compared to other African countries. Donor caused infrastructure to crumble—as a result, part of financing peaked in 2006 and has fallen as the country be- public expenditure has to be used to ensure that current came more stable. level of services is continued. Water and sanitation expenditures have not been pro- tected from budget cuts. In 2002, the GoSL agreed to 6.2 Targeting protect ‘poverty reducing’ or ‘pro-poor’ spending from bud- Nearly all expenditure from internal resources is for recur- get cuts as part of the HIPC Decision Point discussions. Wa- rent expenditure, which creates a strong dependency on ter and sanitation is included in the definition of ‘pro-poor’ donors for the expansion of services. The capital/current spending. Nevertheless, these expenditures have not been split divides expenditures between those where the benefits protected, rather the reverse. In 2007, expenditures on pov- erty reducing programs reached only 57 percent of the bud- geted amount while all other spending reached 72 percent 31 This calculation omits salaries, statutory transfers to NRA and the of the budgeted amount.31 Road Fund, interest, and externally funded project expenditure. 29 waterReport Sierra Leone 3-6-12.indd 29 3/6/12 6:01 PM last more than a year and those where benefits are received tion in all steps of the budget chain. Predictability of the during the year. However, these categories should be used water supply and sanitation sector is a problem, as is trace- with some caution as a part of development expenditure may ability of public expenditures. Delays are from both the gov- be operating costs (current expenditure) that are funded by ernment and donors and are due to lengthy procedures from donors or rehabilitation expenditures. each side, thus putting at risk progress in the sector. Further in the chain, obstacles include lack of sector planning, weak The lack of cost recovery from urban users means that or absent project appraisal, slow procurement, late payment part of public expenditure is in fact a consumer subsidy. of providers, and expenditure arrears. Arrears discourage A large part of consolidated budget funding (76 percent) was providers from bidding for government contracts, which de- spent on SALWACO grants while SALWACO provides services creases the competitiveness of prices. These problems might to a very small percentage of the population of Sierra Leone. increase if responsibilities are further devolved without train- ing staff of local councils. Financing for rural water supply accounted for an esti- mated 60 percent of public expenditure in the review Responsibilities for various activities in WSS frequently period—nearly all of it from donors. At least 60 percent shifted in the review period and formal responsibilities of donor financing was targeted at rural areas during the re- are not met for lack of funds, technical capacity, or po- view period. Less than five percent of internal resources were litical will. The devolution of water supply responsibilities as focused on rural areas, including the local council transfers prescribed in the 2004 Local Government Act has not been for rural water supply that represented two percent of Con- implemented due to lack of capacity in the local council ad- solidated Fund budget. ministrations, resistance of central ministries, and inconsis- tencies among various laws. For rural water supply, the ongoing decentralization process has led to confusing responsibilities, resulting The National Water and Sanitation Policy provides a ba- in a virtual standstill in the sector. Even though they are sis to consolidate the sector framework. The challenge expected to increase in the future, transfers to local councils will be to implement the policy, while sorting out the (lim- have fallen short of budget. Local council transfers for rural ited) inconsistencies with other pieces of legislation. water supply represented only seven percent of the Consoli- dated Fund expenditure. It is noted that the budget of the Responsibilities for sanitation are dispersed and not well central ministry for water (MEWR) has increased rather than defined. Unlike the water supply subsector for which lead- decreased since devolution has officially started in 2005. ership and coordination responsibilities are unambiguously attached to the Ministry of Energy and Water Supply, frag- Sanitation receives only a small part of public expen- mented responsibilities and lack of clear leadership among diture. This comes as no surprise as the sanitation sector different ministries may partly explain why so little funding is dominated by household on-site facilities (latrines, septic went to the sanitation subsector. In rural areas, the commu- tanks) that are generally financed from household expen- nity-led total sanitation (CLTS) approach might be a way of diture. Sewerage and wastewater treatment (normally fi- increasing access, but it is too early to measure results. In ur- nanced from public budgets) are virtually non-existent. ban areas, there is a need to clarify responsibilities for on-site facilities (latrines, septic tanks). These are bound to be the key to increasing access in a country as poor as Sierra Leone. Also, 6.3 Efficiency of Expenditure the responsibility for the operation and maintenance of the The fact that less than half of the Consolidated Fund Freetown sewerage network should be clarified. budget is disbursed is an indicator that budget efficien- cy requires improvement. Average budget execution of the Consolidated Fund stands at 40 percent. The budget ex- 6.4 Recommendations – Breaking the ecution for the grants to local councils was 71 percent over Status Quo the period 2006–2009. Progress in water and sanitation will require actions on The lack of capacity in sector ministries and local coun- multiple fronts taking into account the limited financial, cils is an obstacle for timely and targeted budget execu- human, and technical capacities of the Government of 30 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 30 3/6/12 6:01 PM Sierra Leone. The challenges of rapidly improving water The IFMIS should be fully implemented. Much progress and sanitation services are enormous compared to the avail- has been made in a relatively short amount of time, but able resources. However, recent progress on public financial there is still room for improvement. For instance, the system management systems as well as sector policies and legisla- allows for a PRSP activity classification, but this is not yet in tion provide a good basis for the coming years. use for budget execution. The challenge for the water and sanitation sector in Sierra Leone is to break the current status quo and to 6.4.2 A Sharper Focus in the Allocation of Funding move to a reformed sector. The clarification of the insti- Increasing cost recovery from those who can pay is over- tutional framework for public expenditures in the sector is due. Under-pricing of utility tariffs is a major issue. However, a condition precedent to a sharper focus in the allocation before making any changes to the tariffs, utilities should first of funding. address their low billing and collection efficiencies. The sec- tor cannot develop sustainably without the relatively wealthy The recommendations below focus on implementing ex- paying for their pipe-borne water so public resources can be isting policy frameworks rather than inventing new strat- better targeted to the poor. egies. These entry points are grouped into four categories: The GoSL should make a more explicit allocation of ■ Improve monitoring and evaluation resources including choices between rural and urban ■ A sharper focus in the allocation of funding service and water supply and sanitation. Transfers to lo- ■ Improving the capacity of the government to use its cal councils for rural water supply should be increased from funds more efficiently their current level. This will require decreasing budgets of ■ More and better donor financing central ministries as their responsibilities are devolved. Promoting better maintenance of existing assets can re- 6.4.1 Improve Monitoring and Evaluation duce allocation of spending to rehabilitation and main- The lack of good data not only limits the conclusions tenance and increase the budget resources available that can be drawn from this review, more importantly, it for extending access. The low levels of quality of service limits the government in planning its WSS interventions have resulted in high spending on rehabilitation and main- according to its stated policy objectives. tenance. The introduction of more transparent and perfor- mance-based transfers to water utilities is a priority. Accountability, better allocation, and achieving efficien- cy in sector performance require well-functioning sys- Water and sanitation expenditures should be better tems for monitoring and evaluation. This means building protected from budget cuts as it is a considered ‘poverty reporting systems that measure the efficacy and efficiency reducing’ or ‘pro-poor’ spending. of such programs in achieving measurable outcomes with respect to access, quality, and sustainability of services. Eval- While sanitation facilities might be mainly financed by uations could provide valuable information on what works households in the coming years, public financing for and what does not and provide information for the design sanitation marketing and hygiene education provides of future programs. high returns on investment. Relatively limited govern- ment expenditure on sanitation marketing could mobilize Better measurement and monitoring starts with stan- urban- and peri-urban households to contribute to the de- dardizing definitions. This review was complicated by velopment and implementation of the low-cost sanitation some inconsistencies in the way that different agencies mea- schemes. A lead agency for sanitation should be chosen, sure and report performance. For instance, the indicators for capacities built, and budget provided. Given scarce domes- urban and rural areas vary. There are differences between tic resources, the GoSL should promote low-cost sanitation MICS, WHO/UNICEF, and NWSP definitions of improved and technologies and schemes to allow a greater number of adequate sanitation. Standardization of definitions requires households to take advantage of public expenditures and the development of standard input forms, templates, and thus maximize the public health benefits that this can gener- output reports. ate. The example of the CLTS experience started by UNICEF Conclusion and Recommendations | 31 waterReport Sierra Leone 3-6-12.indd 31 3/6/12 6:01 PM in a number of communities should be endorsed by GoSL The National Water and Sanitation Policy and Act should and complemented with other similar schemes. be implemented fully. This review confirms that NWSP can provide a basis to consolidate the sectoral framework. It will 6.4.3 Improving the Capacity of the Government be important that the sector is given the time to implement to Use its Funds More Efficiently this policy instead of adopting more—and sometimes con- flicting—policies as in the period under review. The Freetown To increase the efficiency of public expenditure and ensure Water and Sanitation Company (FWSC) that will take over all improved access to services, the government will have to: (i) water and sanitation responsibilities in Freetown should be improve sector planning and its linkages to the budget pro- accountable to the Freetown City Council. The ambiguous cess; (ii) increase the accountability of sector agencies, and mandate and accountability of SALWACO, and the respon- (iii) improve implementation of procurement, disbursement, sibilities for water and sanitation in all urban centers outside auditing, and monitoring arrangements to ensure more ef- Freetown, should be clarified to avoid unbudgeted subsidies ficient use of resources. draining scarce public resources. Improve sector planning and its linkages to the Responsibility for sanitation should be defined clearly budget process and unambiguously. While the lead agency for water re- Increased budgetary discipline and close monitor- sources management and water supply has been defined ing of public expenditures is required to improve ef- unambiguously as the MEWR Water Department (the Water ficient allocation of public expenditure in the sector. Supply Division), there is no corresponding lead agency for In the absence of budgetary discipline, it will be hard for sanitation. The community-led total sanitation (CLTS) ap- local councils and public utility companies to effectively proach that was adopted for rural areas in 2008 is a good start. plan investments in the sector. Increased budgetary dis- cipline will increase predictability and reduce delays and Improve implementation of procurement, payment arrears. Better coordination between national and disbursement, auditing and monitoring arrangements sub-national government planning processes and the an- to ensure more efficient use of resources. nual budget formulation process is especially essential in Capacities should be developed at different levels of a decentralized environment where the responsibility for government in WSS project cycle management, includ- water and sanitation services has been transferred to local ing procurement, disbursement, and auditing func- councils. tions. Better planned project and improved procurements will decrease the abandonment of works and reduce delays. Planning and monitoring should integrate capital and Increasing capacities in project appraisal and implementa- recurrent costs. In this connection, project estimates tion will improve budget absorption capacities at different should integrate capital construction costs, rehabilitation levels of government. Capacity problems are especially ur- costs, and operating and maintenance costs, since all need gent in local government authorities. to be funded. Decrease unpredictability of financial resources Clarify responsibilities and increase accountability of Overcoming the unpredictability of financial resources sector agencies requires increasing stable revenue over the medium or The devolution of water and sanitation services to local long term, but some shorter term measures can help. As government and the corresponding decentralization of suggested by the Sierra Public Expenditure Review report, human and financial resources prescribed in the Local 2010, a number of short-term actions can be taken to reduce Government Act should be implemented fully. Decen- vulnerability to the unpredictability of financial resources, tralization is based on the proposition that local govern- especially donor financing.32 These includes better planning ments are closer to the citizens, are more informed of local that ensures that each planned project is desired by the preferences, and can respond to them more quickly and ef- MEWR and local governments, and avoid projects that are ficiently than central government MDAs. Accountability may “donor driven� to the extent they would not be implemented be strengthened also through District WATSAN Committees and other monitoring bodies such as the District Budget Oversight Committees. 32 World Bank (2010) Sierra Leone PER, op. cit. para. 1.36–1.39. 32 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 32 3/6/12 6:01 PM without donor pressure. Also, the complexity of project de- Donor harmonization and pooling of resources can im- signs should be in line with capacities on the ground, while prove efficiency of funding and optimize the use of lim- at the same time project can be used to improved institu- ited GoSL capacities. Pooling resources is likely to be most tional capacity to plan and implement projects in the WSS effective when it is combined with measures that generate sector in a learning-by-doing mode. Better planning will also the economies of scale of such pooling through harmoniza- help to reduce delays and cost escalations by avoiding ar- tion of procurement, disbursement, and monitoring proce- rears to suppliers and contractors. dures. Donors’ own performance in managing these funds can also improve, by harmonizing procurement, disburse- ment, and reporting requirements (which will alleviate some 6.4.4 More and Better Donor Financing of the capacity constraints in the different sector agencies), The GoSL should take the lead in developing an aid co- and improvements in the release of funds. As a first step, ordination platform in which concerns about donor har- development partners should consider forming a WATSAN monization and coordination should be addressed. Do- Donor Working Group to harmonize their approaches and nor funding is critical for the sector as internal resources are monitoring and evaluation machinery. This will reduce the already flowing in but funding needs cannot be fully met by risk of conflicting advice and recommendations from donors the government alone. The donor commitments for funding and reduce the transaction costs of their aid. The donors for the coming years are a good start, but commitment and should also consider the further step of bundling their sup- disbursement are two different things. Resource mobilization port into a co-financed or parallel-financed program follow- efforts should be intensified to capture donor funding. To ing a Sector Wide Approach (SWAp), as well as the use of avoid delays associated with donor procedures, counterpart output-based aid approaches to improve targeting and ef- financing requirements must be clear and be met on time. ficiency of donor programs. Conclusion and Recommendations | 33 waterReport Sierra Leone 3-6-12.indd 33 3/6/12 6:01 PM waterReport Sierra Leone 3-6-12.indd 34 3/6/12 6:01 PM Annexes 35 waterReport Sierra Leone 3-6-12.indd 35 3/6/12 6:01 PM Annex 1 Budgets for Water and Sanitation in Sierra Leone and Expenditure 2002–2009 Total waterReport Sierra Leone 3-6-12.indd 36 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002–2009 Consol Fund – Budget (Le millions) MEWR (former MEP) Water Services Prog 406-0002 US$000 Personnel 274.0 310.7 333.9 400.9 494.6 525.1 573.0 529.8 2,713.0 3,442.0 Goods/services 95.3 125.2 125.7 1,029.6 172.6 176.6 161.9 386.5 541.1 2,273.4 Grant to SALWACO 2,705.0 3,176.2 3,330.0 2,120.1 2,405.8 2,646.4 2,381.7 2,786.7 3,901.4 21,551.9 Dev’t – Gov’t 13,412.0 341.4 517.0 7,136.0 1,006.1 2,020.0 2,015.0 3,064.0 17,175.0 29,511.5 Total 406-0002 16,486.3 3,953.5 4,306.6 10,686.6 4,079.1 5,368.1 5,131.6 6,767.0 24,330.5 56,778.8 Tfrs to LCs Prog.701-2019 Rural water grant 0.0 0.0 0.0 0.0 700.0 770.0 785.4 805.0 824.0 3,060.4 MHS Prog 304-2005 Env Health (Sani) &Entomology Personnel 120.1 384.1 155.3 195.4 0.0 0.0 268.6 210.6 ? 1,334.1 Goods/services 606.9 1,097.0 276.3 ? 162.7 209.7 262.7 357.4 145.8 2,972.7 Dev’t – Gov’t 270.0 403.0 199.2 ? 69.0 85.7 79.9 100.3 ? 1,207.1 Total 304-2005 997.0 1,884.1 630.8 195.4 231.7 295.4 611.2 668.3 145.8 5,513.9 Total consol fund budget 17,483.3 5,837.6 4,937.4 10,882.0 5,010.8 6,433.5 6,528.2 8,240.3 25,300.3 65,353.1 36 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 Consol. Fund Actual Expenditure (Le millions) MEWR/MEP Water Services Prog 406-0002 Personnel 487.1 534.2 526.6 507.4 2,055.3 Goods/services 32.2 165.1 69.4 120.6 227.4 614.7 Recurrent grant to SALWACO 1,879.0 1,466.0 864.1 1,799.0 2,786.0 8,794.1 Dev’t – Gov’t 6.1 24.0 25.0 14.0 69.1 Total 406-0002 3,596.5 3,554.4 3,954.1 1,911.2 2,124.3 1,491.7 2,471.2 3,534.8 22,638.2 Tfrs to LCs Prog.701-2019 Rural water grant 0.0 0.0 0.0 0.0 687.6 114.7 592.9 787.4 2,182.6 MHS Prog 304-2005 Env Health (Sani) &Entomology Personnel 171.9 202.4 357.4 731.7 Goods/services 41.9 47.5 80.2 169.6 (Continued on next page) 3/6/12 6:01 PM Budgets for Water and Sanitation in Sierra Leone and Expenditure 2002–2009 (Continued) Total 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002–2009 waterReport Sierra Leone 3-6-12.indd 37 Dev’t – Gov’t 0.0 3.3 0.0 3.3 Total 304-2005 0.0 0.0 0.0 0.0 0.0 213.8 253.2 437.6 904.6 Total cons fund expenditure 3,596.5 3,554.4 3,954.1 1,911.2 2,811.9 1,820.2 3,317.3 4,759.8 25,725.4 Local councils Exp on rural water         699.9 81.8 785.4 787.4   2,354.5 Total genl gov’t excl donor exp (Le mns) 3,596.5 3,554.4 3,954.1 1,911.2 2,824.2 1,787.3 3,509.8 4,759.8 25,897.3 Exchange rate to US$ 2,099 2,345 2,701 2,890 2,962 2,985 2,981 3,400 Total gen’l gov’t excl donor exp (US$000) 1,713.4 1,515.7 1,463.9 661.3 953.5 598.8 1,177.4 1,399.9 9,484.0 Donor funding agency expenditures (US$000) AfDB Water supply & sanit’n study 68.1 68.1 264.4 400.6 Forthcoming project BADEA Kabala Water Supply 0.0 DFID Freetown WASH – ex’d by WB 7,736.4 124.0 202.2 148.7 8,211.3 TA projects 113254 & 104632 478.2 310.3 788.5 WASH – UNICEF 3,208.0 1,855.0 2,189.6 7,252.6 WASH Port Loko – Plan Int’l 646.5 646.5 Freetown Diarr.Prev’n-GOAL 99.7 618.1 717.8 Freetown Water &Sanit’n-GOAL 167.6 167.6 Water quality mon’g – ACF 555.2 555.2 Comm’y led diarr. disease prev’n 39.6 39.6 EC Water facility Kailahun – Oxfam 773.5 340.1 317.0 362.4 1,793.0 Spanish Red Cross – Koinadugu 250.8 100.4 93.6 51.1 495.9 Oxfam HELP Kailahun 412.2 371.2 341.8 109.8 1,235.0 IDB Rural Water Supply & Sanitation 1,728.9 1,728.9 Irish Aid UNDP 05-08 Env Sanitation Program 275.0 275.0 JICA Follow up cooperation for rural water supply 1,723.0 1,723.0 Water Supply System in Kambia District 900.0 900.0 Water supply mgt system in Kambia 683.5 683.5 UNDP Preventive Dev’t Support 74.9 74.9 UNICEF WATSAN 3,075.0 3,075.0 Water & Sanitation 3,262.0 3,262.0 Provision of Safe Water 888.2 888.2 (Continued on next page) Annexes | 37 3/6/12 6:01 PM Budgets for Water and Sanitation in Sierra Leone and Expenditure 2002–2009 (Continued) Total 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002–2009 US Embassy Ambassador’s Special Self Help Program 1.2 9.9 18.5 29.6 waterReport Sierra Leone 3-6-12.indd 38 World Bank Power and Water Project: 107.6 642.8 750.4 Rural Water supply (SALWACO) 633.4 941.7 2,233.2 1,782.0 5,590.3 Total external funds 0.0 0.0 1,728.9 5,485.2 13,027.3 8,182.8 6,223.7 6,636.5   41,284.4 Grand total us$ 000 1,713.4 1,515.7 3,192.8 6,146.5 13,980.8 8,781.6 7,401.1 8,036.4 50,768.4 Credibility of GOSL budgets (deviation/budget %) –79.4% –39.1% –19.9% –82.4% –43.9% –71.7% –49.2% –42.2% –60.6% Sources of funds $000 $000 $000 $000 $000 $000 $000 $000 $000 GOSL 1,713.4 1,515.7 1,463.9 661.3 953.5 598.8 1,177.4 1,399.9 9,484.0 Donors 0.0 0.0 1,728.9 5,485.2 13,027.3 8,182.8 6,223.7 6,636.5 41,284.4 Total 1,713.4 1,515.7 3,192.8 6,146.5 13,980.8 8,781.6 7,401.1 8,036.4   50,768.4 % breakdown of sources % % % % % % % % % GOSL 100.0 100.0 45.9 10.8 6.8 6.8 15.9 17.4 18.7 Donors 0.0 0.0 54.1 89.2 93.2 93.2 84.1 82.6 81.3 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0   100.0 38 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 3/6/12 6:01 PM Annex 2 GVWC revenue, expenditure, and cash flows (2002–2009) (in thousands of Leones) Total Operating Expenditures 2002 2003 2004 2005 2006 2007 2008 2009 2002–2009 Direct Expenses 2,893,124 3,612,638 3,773,325 4,063,022 4,596,920 4,469,935 5,467,113 4,859,248 Depreciation 857,418 1,023,560 4,708,921 4,889,311 4,765,041 4,838,697 4,694,859 5,093,952 Administrative Expenses 981,935 1,200,803 2,188,471 2,209,562 5,013,697 3,878,362 8,287,973 4,571,952 Bad Debts Provisions 1,952,473 9,777,060 11,974,997 9,039,582 1,500,462 4,720,714 8,826,118 3,388,231 Exchange Loss 915,583 — 12,215,590 2,215,388 1,652,743 129,558 2,010,611 24,745,691 Interest Payable 391,756 35,495 6,147,759 6,709,664 7,090,123 747,173 824,105 939,038 Income Tax Charge 233,801 — — — — 7,138,588 120,616 — Total Operating Expenses 8,226,090 15,649,556 41,009,063 29,126,529 24,618,986 25,923,027 30,231,395 43,598,112 Capital Expenditures 3,939,877 716,642 313,734 1,883,791 353,342 750,891 1,825,625 4,348,496 Total Expenditures 12,165,967 16,366,198 41,322,797 31,010,320 24,972,328 26,673,918 32,057,020 47,946,608 Total Expenditures (cash basis, 9,122,275 5,565,578 24,638,879 17,081,427 18,706,825 9,975,919 18,415,427 39,464,425 142,970,755 excl. income tax to GoSL) Total Revenue (received from 4,003,618 13,236,838 5,202,648 6,364,726 10,342,581 13,315,595 20,545,777 14,385,969 87,397,752 customers, cash basis) Total Revenue 1,907.4 5,644.7 1,926.2 2,202.3 3,491.8 4,460.8 6,892.2 4,231.2 30,756.6 WB Debt Relief 15,879.4 15,879.4 Sources: Audited accounts 2002–2008, unaudited draft accounts 2009. Capital expenditure is from Cash Flow Statements. Annexes | 39 waterReport Sierra Leone 3-6-12.indd 39 3/6/12 6:01 PM Annex 3 SALWACO Revenue, Expenditure and Cash Flows 2002–2009 (in million Leones)   2002 2003 2004 2005 2006 2007 2008 2009 Total 2002–2009 Revenue     636.1 298.6 337.4 332.1 386.8 279.4 2,270.4 Cost of Sales     2,023.6 470.5 167.8 129.9 516.2   3,308.0 GOSL Grant from MEWR     3,348.6 2,379.0 1,556.0 1,035.9 2,723.3 2,711.0 13,753.8 Operating Expenses     2,252.4 2,723.8 2,163.6 1,436.2 2,296.9 2,797.3 13,670.2 Interest     11.3 9.4 7.4 77.0 199.9   305.0 Net Profit or Loss     –302.6 –526.2 –445.4 –275.0 97.0 193.2 –1,259.0                   Depreciation     340.5 337.8 354.8 364.3 143.1   1,540.5 Decrease in Inventory     132.3 0.0 0.0 0.0 0.0   132.3 Decrease in Receivables     25.7 –1.4 –18.8 –7.7 –224.8   –227.0 Increase in Payables     –41.4 243.0 110.3 21.3 18.0   351.2 Capital Expenditure     179.7 29.6 81.0 38.9 106.7   435.9 Revenue on Cash Basis, Excl. Grant 0.0 0.0 661.8 297.2 318.6 324.4 162.0 279.4 2,043.4 Expenditure on Cash Basis 0.0 0.0 4,035.6 2,652.5 1,954.7 1,296.4 2,958.6 2,797.3 15,695.1 Cash Surplus/Deficit before Grant 0.0 0.0 –3,373.8 –2,355.3 –1,636.1 –972.0 –2,796.6 –2,517.9 –13,651.7 Revenue excl. Grant (US$000) 0.0 0.0 245.0 102.8 107.6 108.7 54.3 82.2 700.6 Sources: Audited accounts 2002–2008, unaudited SALWACO report for 2009 Note: Audit reports for the years 2004–2008 were prepared by PKF and audited accounts all approved by the Board in January 2010. For the years 2004–2006, the auditors did not see documentation for Le 2.3 bn expenditure, which remained unclassified in the Accounts Controls over revenue were inadequate. 40 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 40 3/6/12 6:01 PM Annex 4: Persons met Rexson L. Keingo, District Supervisor, Bo Office Augustine Tucker, District Supervisor, Kenema Office African Development Bank Andrew Moseray, Bombali District Supervisor, Makeni Office Abdul P.A. Bangura, Infrastructure Specialist Ministry of Health Bo City Council Thomas Amara, Manager Environmental Health Division Emmanuel Deoud, Deputy Chief Administrator Bankole Deen, Head, Water and Sanitation Unit, EHD Eric Moosa, Environmental Health Officer John Tommy, Head, Medical Waste Unit, EHD Bo District Council Ministry of Internal Affairs, Local Government and Rural Matthew Mannah Margao, Chairman Development Joseph Bindi, Deputy Chairman Alhassan Kanu, Director, Decentralization Secretariat Josaye Bangali, Chief Administrator S.A. Tejan Rogers, M & E Manager, Decentralization Secretariat Jonathan Kpakiwa, Capacity Building Manager, Decentraliza- Bombali District Council tion Secretariat Mohamed Osman Marrah, Chief Administrator Floyd Alex Davis, Legal and Governance Manager, Decentral- ization Secretariat Department for International Development, UK Yassin M’shana, Consultant to Ministry of Energy and Water Ministry of Finance and Economic Development Resources Hawa Musa, Development Branch Mari-Ama Gborie, Assistant Program Manager, Human De- Raymond Coker, Assistant Accountant General velopment Team Adams Kargbo, Director, Local Government Finance Division Alpha Umaru Jalloh, Senior Economist, Local Government European Commission Finance Division Ritchie Jones, Program Manager Alimamy Kabba, Local Government Finance Division Freetown City Council Oxfam Bowenson F. Phillips, Chief Administrator Emmanuel Gaima, Country Director Koroma, Accountant Sierra Leone Water Company Philip K. Lansana, Director General Freetown Waste Management Company Samuel Bangura, Finance Director Tamba Charles, General Manager Victor J.O. Hasting-Spaine, Technical Director Sheikh Sesay Operations Manager Junisa Fofana, Regional Engineer, Bo Office Komba Mara, Accountant Lloyd Becker, Project Engineer, Kenema Office A.K. Kargbo, Station Manager, Makeni Treatment Plant Guma Valley Water Company Ibrahim B. Wilson, General Manager UNICEF Bankoleh Mansaray, Deputy General Manager Victor Kinyanjui, WASH Project Manager Raymond Williams, Chief Engineer Arnold Cole, WES Specialist George Saquee, Project Manager J.J. Yilly, Ag Finance Manager World Bank Engilbert Gudmundsson, Country Manager Ministry of Energy and Water Resources, Water Services Yao Badjo, Task Team Leader Division Brendan Glynn, Decentralization Consultant Wusum Koroma, Director Francis Moijue, Executive Engineer (from Saata Assciates) Joseph D. Mahayei, World Bank Project Coordinator Andrew Musa, Word Bank Project Accountant Madu Jalloh, World Bank Monitoring and Evaluation Officer Annexes | 41 waterReport Sierra Leone 3-6-12.indd 41 3/6/12 6:01 PM Annex 5: Documents Government of Sierra Leone (2009) Sierra Leone Demo- graphic and Health Survey, July African Development Bank (2010) Aide Memoire on Pre-Ap- praisal Mission January 3–February 17 Government of Sierra Leone, Ministry of Health and Sanita- tion (2009) National Heath Sector Strategic Plan 2010–2015, DFID (2006) Project Memorandum: Support to Improved Ac- October cess to Water and Sanitation in Freetown, December Government of Sierra Leone, Development Aid Coordination DFID/UNICEF/GOSL (2007) Sierra Leone Hygiene, Sanitation Office (2009) Aid Policy, November and Water Supply Program (2008–2013), November Government of Sierra Leone, Ministry of Energy and Water DFID/UNICEF/GOSL (2010) Quarterly WASH Report, Oct–Dec Resources (2010) The National Water and Sanitation Policy, 2009 and Proposed Policy Implementation Plan, March European Commission, UNEP and others (2008) Roadmaps Government of Sierra Leone, Local Government Finance De- for Water Management in West Africa, Case Studies fom the partment, various Monitoring Reports Gambia, Guinea-Bissau and Sierra Leone Government of Sierra Leone, Detailed Revenue and Expendi- Freetown Waste Management Company (2010) Annual Re- ture Estimates 2002–2010 port for January–December 2009 Guma Valley Water Company (2008) Strategic Water Supply Government of Sierra Leone (2008) Public Financial Manage- and Sanitation Framework Summary March ment Performance Assessment Report, Revised Final Daft, December 2007, and Annex on Financial Management in the Guma Valley Water Company (2009) Strategic Water Supply Local Councils and Sanitation Framework, Part 4, Priority Investment and Financial Plan, February Government of Sierra Leone and UN Economic Commission for Africa (2005) Guidelines and Action Plan for Implement- Guma Valley Water Company (2010) Annual Audited Ac- ing the Water Supply and Sanitation Policy counts 2002–2008, and Draft Accounts 2009 Government of Sierra Leone, Statistics Sierra Leone (2007) Japanese Investment Cooperation Agency (2010) An Assess- Sierra Leone Integrated Household Survey ment of Water and Sanitation Facilities and Socio-Economic Survey of Rural Towns, Final Report Government of Sierra Leone, Statistics Sierra Leone (2008) Multiple Indicators Cluster Survey 2005 Lansana, P. (2008) An Overview of SALWACO, August Government of Sierra Leone, Ministry of Finance and Eco- SALWACO (2008) A Overview of the Sierra Leone Water Com- nomic Development (2008) Recurrent Cost of Local Council pany Service Provision (Callen Report) SALWACO (2010) Annual Audited Accounts 2004–2008, and Government of Sierra Leone (2008) Second Poverty Reduc- Draft Accounts 2009 tion Strategy Paper – Agenda for Change Water and Sanitation Program (2010) Country Status Over- Government of Sierra Leone (2009) Government Budget and view [Sierra Leone] Daft Zero Statement of Economic and Financial Policies for the Finan- cial Year 2010 UN Millennium Project (2005) Health, Dignity, and Develop- ment: What Will it Take? Task Force on Water and Sanitation Government of Sierra Leone, Statistics Sierra Leone (2009) Annual Statistical Digest 2006 42 | Sierra Leone: Public Expenditure Review for Water and Sanitation 2002 to 2009 waterReport Sierra Leone 3-6-12.indd 42 3/6/12 6:01 PM UNDP (2009) Country Sector Assessments, UNDP GoAL World Bank (2009) Decentralization, Democracy and Devel- WaSH Program, Governance, Advocacy and Leadership for opment: Recent Experience from Sierra Leone, edited by Water, Sanitation and Hygiene, Volume 1. Yongmei Zhou WHO (2004a) Water, Sanitation and Hygiene Links to Health: World Bank (2010) Sierra Leone Power and Water Project – Facts and Figures Water Supply and Sanitation Component, Progress Report for the Year Ending December 2009, and Status Report and WHO/UNICEF (2000) Global Water Supply and Sanitation As- Aide Memoire, February sessment Report World Bank (2010) Sierra Leone Public Expenditure Review, World Bank (2009) Project Appraisal Document…for a De- March centralized Service Delivery Program World Water Council (2006) Costing MDG Target 10 on Water Supply and Sanitation, March Annexes | 43 waterReport Sierra Leone 3-6-12.indd 43 3/6/12 6:01 PM waterReport Sierra Leone 3-6-12.indd 44 3/6/12 6:01 PM waterReport Sierra Leone 3-6-12.indd 45 3/6/12 6:01 PM WORLD BANK 1818 H Street, NW Washington, DC 20433 waterReport Sierra Leone 3-6-12.indd 46 3/6/12 6:01 PM