Acting Administrator John Barsa’s Remarks at Sanitation and Water for All Finance Ministers Meeting

Speeches Shim

Wednesday, November 4, 2020

Hello everyone, it’s a pleasure to join you all today to discuss such a pressing and timely issue. As many of you know, COVID-19 is ravaging international access to water, sanitation, and hygiene.

Based on phone surveys supported by USAID in five African countries, as many as 300 million people are already facing challenges in accessing drinking water. As incomes drop, prices rise, and water is available for fewer hours, many households have less money to pay for water. And in many countries, service providers are at risk of outright insolvency because of pauses on customer fees, higher household demand, and lower industrial use of water.

Women and girls often experience the brunt of water shortages as well. They often bear responsibility for collecting water, and they are especially at risk of COVID-19 transmission when using public water points and latrines. In addition, gender-based violence, which has already increased during the pandemic, continues to be a risk during water collection and at public latrines.

Every one of us here today has a responsibility to ensure that water systems will not be as vulnerable when the next crisis hits. If we all do not make these investments in water infrastructure now, Africans across the continent will pay much more in the long term.

In order to achieve universal access to basic water and sanitation services, the World Bank estimates that we need an additional $114 billion in capital expenditures each year through 2030. Even then, this estimated resource gap does not include the cost of operations, maintenance, governance, and more. The real need is even higher.

A lack of sufficient and sustainable financing has led to system breakdowns and a loss of trust in government services. But the private sector is well-suited to strengthen these systems through technical support, maintenance, financial management, and commercial investment. Increasing private sector engagement is critical to closing the WASH sector’s financing gaps.

At the same time, national governments must provide leadership in developing sector financing strategies. Governments must dedicate sufficient public funds to water and sanitation, and ensure that funds from all public and private sources are used efficiently and transparently.

Currently, many service providers are not attractive enough to commercial investors. These providers need help to improve their performance and policies in order to secure enough financing for the sector and to increase revenue. And without enough financing, resilience will be impossible.

That’s why USAID is committed to supporting Ministers of Finance and your multi-stakeholder partners to develop financing strategies that will support sustainable water and sanitation systems, through a combination of both public and private finance.

Many governments participating today have declared water an essential service during the COVID-19 pandemic. Governments are providing free water to ensure that communities continue to have access to water that is safe to drink and use for handwashing. But this declaration has strained service providers, and it is critical that we mobilize public resources to subsidize costs in the short term.

However, short-term subsidies will not be enough when it comes to preparing for the next pandemic, financial crisis, or natural disaster. We must strengthen the entire system to advance self-reliance and resilience to future shocks.

The WASH sector requires significant and continuous public funding. And private sector finance must complement those public investments. But we recognize that private sector investment may remain low until service providers adopt stronger business models and practices.

To face this challenge head on, I’m pleased to announce today that USAID is extending our flagship WASH Financing activity until September 2022. Our country Missions will provide up to $10 million more to close financing gaps and mobilize further resources to ensure that all citizens can access adequate water, sanitation, and hygiene services.

We will ensure that no momentum is lost as we work to prevent utilities from collapsing under the strain of COVID-19, while also improving their creditworthiness for the long term.

It’s an honor to have USAID’s work featured in SWA’s Finance Ministers Handbook, as well as at today’s meeting. We’re encouraged by today’s case study from Kenya and are pleased to work with the Governments of Kenya and the Netherlands on these important issues.

Part of our shared path forward must be to address challenges of governance and institutional capacity, which create barriers to widespread commercial finance in the WASH sector. Broader financing strategies at the country level are essential for a holistic approach to the sector’s sustainability.

In closing, I’d like to pose two questions to the Honorable Ministers with us today. First, what challenges do you face in using financial guarantees to break into new markets or expand services? Second, how is this impacted by challenges created by the COVID-19 pandemic?

Again, thank you for the opportunity to speak with you all today. We look forward to continuing our collaboration to achieve universal access to clean water and adequate sanitation.