Water, sanitation subsidies fail to reach the poor

Subsidies that are implemented effectively can help achieve access to adequate and equitable water and sanitation.

Governments across the globe, except China and India, have alloted a combined $320 billion a year for water and sanitation subsidies and yet the funds have remained inaccessible to the people who need it most — the people living in poverty.

According to a World Bank report titled “Doing More with Less – Smarter Subsidies for Water Supply and Sanitation,” government subsidies have largely benefitted the upper-income groups and don’t sufficiently help poor households

Consequently, impoverished families are left without much-needed support.

Across the 10 lower and middle-income countries studied by the World Bank, 56 percent of subsidies end up in the pockets of the richest 20 percent and only 6 percent find their way to the poorest 20 percent.

Th annual fund, according to the study, is equivalent to about half a percent of these countries’ combined gross domestic product (GDP).

“That’s over $300 billion of public money which makes up the difference between how much it costs to provide water and sanitation services and the money that comes in from users,” the report read.

“These subsidies cover operations expenditures such as staffing costs, maintaining existing infrastructure, and infrastructure rehabilitation and expansion.

The World Bank said water and sanitation subsidies can accumulate a substantial portion of a country’s public financial resources.

The majority of subsidies go to water, urban and networked services. A better balance across water and sanitation, rural and urban, and different types of service are thus needed to make subsidies work harder.

For instance, in a number of countries — including Colombia, India, Kenya, Morocco, the Philippines, and Uganda — water and sanitation subsidies are triggered when water and sanitation facilities are provided for the poor.