Innovative mechanisms for the financing of capital maintenance of piped systems in Ghana may not necessarily fix the problems of poor service delivery (including unreliable service). What is critical to effectively address address capital maintenance expenditure (CapManEx) relates to governance, management and financial management regimes of the Water and Sanitation Management Team (WSMTs).
|Title||Innovative financing for capital maintenance expenditure in small towns water systems in three districts in Ghana : Akatsi South, East Gonja and Kintampo South districts|
|Publication Type||Research Report|
|Year of Publication||2017|
|Authors||Kumasi, TC, Kubabom, B, Abbey, E, Nunoo, W, Konadu, O, Ayi-Bonte, V, Adomako-Adjei, T, Nyarko, KB|
|Pagination||56 p. : 2 fig., 6 tab.|
|Publisher||IRC and Community Water and Sanitation Agency (CWSA)|
|Place Published||Accra, Ghana|
The objective of this study is to identify solutions including innovative financing mechanisms to address capital maintenance expenditure (CapManEx) for improved water services (affordable, reliable and sustainable) in small towns. The study was conducted in three districts (Akatsi South, East Gonja and Kintampo South) using focus group discussions, key informant interviews and review of existing management and operations data. The study adopted a purposive sampling technique to select respondents for the interviews and the primary and secondary quantitative data obtained were analysed using Microsoft Excel whiles qualitative data analysis involved identification, examination and interpretation of patterns and themes.
The study revealed that the mechanism inherent in the National Community Water and Sanitation Strategy (NCWSS) for addressing CapManEx works for the systems that have been following it. The water systems with inadequate mechanisms to address CapManEx are characterised by limited capacity (e.g. tariff settings) and weak management (record keeping, financial management etc.). There was limited awareness and application of water sector guidelines for the management of the piped schemes by the Water and Sanitation Management Team (WSMTs) and the District Assembly (DA). Tariff settings was done arbitrarily by almost all the WSMTs; tariffs used by WSMTs were not submitted to the DA for approval. Most of the water systems were not following the NCWSS procedures of having three separate accounts with one dedicated for CapManEx.
The study did not find any innovative mechanisms of financing CapManEx for piped schemes in the three districts. The main sources of finance are tariffs, contribution from District Assemblies and in a few instance grants from donors. In addition, none of the water systems had ever approached a bank for a loan to address CapManEx. However, the financial institutions in the study districts are willing to provide loans to the piped schemes if WSMTs meet their conditions.
The concept of pool funding received mixed reactions from the DAs and the WSMTs. The majority were in support of the pooled funding concept on condition that the modalities for its implementation were clearly spelt out from the on-set. Opinions however differed regarding insuring components of the piped schemes.
The study concludes that innovative mechanisms for the financing of capital maintenance of piped systems in Ghana may not necessarily fix the problems of poor service delivery (including unreliable service). What is critical to effectively address CapManEx relates to governance, management and financial management regimes of the WSMTs to bring about the necessary change in the WSMTs in Ghana.
Incl. 16 ref.