Transcript Document

Vivien Foster & Cecilia Briceño-Garmendia
World Bank
Africa Infrastructure Country Diagnostic:
a multi-stakeholder effort
Banque Africaine de
Developpement
African Union
Agence Française de
Développement
Development Bank of Southern
Africa
Department for International
Development
European Union
The Infrastructure Consortium for Africa
Kreditanstalt für Wiederaufbau
The New Partnership for Africa’s
Development
Public-Private Infrastructure Advisory
Facility
Sub-Saharan Africa Transport Project
The World Bank
Water and Sanitation Program
Key Message #1
Water spending needs
are US$32 billion a year,
(of which US$22 billion
for WSS MDGs)
An illustrative water investment agenda
for the next decade
 Water supply – meet MDG target by 2015 (and
rehabilitate existing systems to ensure sustainability)
 Sanitation – meet MDG target by 2015 (and rehabilitate
existing systems to ensure sustainability)
 Irrigation – develop all viable large and small scale
irrigation opportunities amounting to 7 million has.
 Water resources – develop all water storage associated
with feasible hydro-projects (of at least 35 GW)
Overall price tag of US$32 billion annually
– mainly MDG related
US$ billion pa
Investment
Rehabilitate
Expand
O&M
TOTAL
Total
22.2*
WSS MDG Targets
 Water
4.2
6.9
11.1
5.5
16.6
 Sanitation
2.8
1.3
4.1
1.5
5.6
Water Resources
10.1
 Irrigation
0.6
2.1
2.7
0.6
3.3
 Storage
-
6.8
6.8
-
6.8
7.6
17.1
24.5
7.6
32.3
TOTAL
* Assuming medium level of service
How investment needs here are different from
previous estimated?
 Analysis expands existing methodologies:
 Includes non-standardized infrastructure costs, reflecting
country-specific patterns of demography and geography and
differences in levels of technological innovation and local
market development
 Assumes that the relative prevalence of water and sanitation
supply modalities will remain constant from 2006 to 2015
 Estimates rehabilitation needs based on the specific status of
assets and rehabilitation backlog of each country
 Allows running sensitivity analysis on different parameters
(quality of service, costs, timeframe) and exploring
affordability issues
Equa.Guinea
Gabon
Mauritania
South Africa
Botswana
Cameroon
Swaziland
Zimbabwe
Chad
Nigeria
Namibia
Senegal
Lesotho
Burkina Faso
Mozambique
Ghana
Cote d'Ivoire
Uganda
Guinea
Rwanda
Mali
Zambia
Benin
Malawi
Sudan
Tanzania
Niger
Ethiopia
Kenya
CAR
Madagascar
Eritrea
Gambia
Sierra Leone
Liberia
DRC
Togo
LIC-Fragile
LIC-Non Fragile
MIC
Resource Rich
SSA
Percentage of GDP
18 countries (many fragile) would need to spend
more than 5 percent of GDP to achieve MDG in WSS
35
Investment
Assuming medium level of service
O&M
30
25
20
15
10
5
0
Key Message #2
First step towards
achieving water security
is to develop priority
hydro-power schemes
Achieving full water security is an
unquantified challenge
 Africa’s hydrological legacy is particularly challenging
 High rainfall variability within and across years
 60 international rivers
 Extreme hydrological events (droughts/floods) have major
macro-economic impacts
 Ethiopia, Kenya, Mozambique all losing 1% GDP annually
 Africa’s per capita water storage capacity is 200m3 versus
at least 1,000m3 in other developing regions
 Cost of increasing storage by these multiples would be
prohibitive in economic terms
 Raising Ethiopia’s storage to RSA levels would cost US$35bn,
Major development of hydro-power over next
decade particularly with regional trade
Power generation capacity (MW)
Trade
stagnation
Central Africa
Eastern Africa
Southern Africa
Western Africa
Total
* Simple average
3,567
4,170
10,797
14,845
33,379
Trade
Expansion
4,847
10,675
16,764
17,620
49,546
Water storage
millions m3
m3 per-capita
30,383
0.32
65,444
0.25
21,121
0.11
18,667
0.08
135,615
0.19*
Key Message #3
Potential to viably double
existing irrigated area but
crucially sensitive to costs
About 7 million hectares of new irrigation
potential – predominantly small scale
IRR threshold of 12%
Small scale schemes
Large scale schemes
Total new schemes
Rehabilitating existing schemes
Total
Agricultural area
Investment Internal Rate of
Return (%)
(millions hectares) (US$billion pa)
5.4
1.8
26
1.4
0.3
17
6.8
2.1
25
1.7
0.6
Na.
8.5
2.7
25
Irrigation is mostly viable only for cash or high value food
crops (horticulture) with revenues >US$2,000/ha/yr
Small scale gives much higher returns,
but potential area much more sensitive to cost
Hectares as percentage of base case
250%
200%
Large
scale
schemes
150%
100%
Small scale
schemes
50%
0%
0
5,000
Cost (US$ per hectare)
10,000
Spatial extension of large and small scale
irrigation potential identified
Irrigation potential concentrated in some
15 countries, most notably Nigeria
Note: Graphs show all countries with more than 50,000
hectares of potential for large or small scale irrigation
Key Message #4
Access stagnant and
inequitable, main action
at lower end of ladder
35%
2.0%
30%
Annual increase in
percentage covered
25%
1.5%
20%
1.0%
15%
10%
0.5%
5%
0%
Traditional latrines
Cell phones
Electricity
Boreholes
Landline
Flush toilet
Landline
Stand posts
Piped water
Electricity
1996-2000 2001-2005
Improved latrines
1990-95
Flush Toilet
0.0%
Piped Water
Percentage of households
Access trends stagnant at best, fastest
growth takes place on lower rungs of ladder
Second best solutions as inequitably
distributed as first best solutions
Sanitation presents a number of different
typologies that drive policy choice
Prevalence of open defecation
Septic tank
Improved
latrine
Prevalence of unimproved latrine
Septic tank
Unimproved
latrine
Open
defecation
Prevalence of improved latrine
Septic tank
Improved
latrine
Improved
latrine
Unimproved
latrine
Open
defecation
Bimodal pattern
Septic tank
Unimproved
latrine
Open
defecation
Improved latrine Unimproved latrine
Open defecation
Key Message #5
Existing spending on
MDG targets at US$7.6
billion a year more than
previously thought
Spending of US$7.6 billion annually
Investment
US$billion pa
O&M
NonHouse
Public
OECD Private hold
Public TOTAL
ODA
Total
Sector
financi sector selfSector
ers
finance
Middle income
0.2
0.1
0
0
0.3
0.5
2.2
2.6
Resource rich
0.7
0.2
0.1
0
0.8
1.6
0.2
1.7
0.3
0.8
0.1
0
0.8
1.5
0.3
1.8
0
0.1
0
0
0.3
0.3
0.1
0.5
1.1
1.2
0.2
0
2.1
4.6
3.1
7.6
Low income Non-Fragile
Low income Fragile
TOTAL
South Africa
Namibia
Cameroon
Cote d'Ivoire
Chad
Nigeria
Kenya
Malawi
Uganda
Senegal
Burkina Faso
Madagascar
Ghana
Tanzania
Lesotho
Mozambique
Rwanda
Niger
Zambia
Benin
Cape Verde
Ethiopia
LIC-Fragile
LIC-NoFragile
Resource-Rich
MIC
SSA
Percentage of GDP
16 countries are already spending more
than 2 percent of GDP
6
O&M
Investment
5
4
3
2
1
0
LICs heavily dependent on donor capital,
households play key role in sanitation
Public
ODA
Non-OECD
HH Self Finance
percentage of GDP
0.41
0.05
0.43
0.33
0.08
0.08
0.03
0.06
0.32
RR
0.22
MIC
SSA
0.16
0.27
LICNF
0.19
0.04
0.11
0.05
LICF
0.03
0.24
0.71
Key Message #6
There is a ‘funding gap’ of
US$11.4 billion a year for WSS,
even after the US$2.9 billion
‘efficiency gap’ is recouped
What do we mean by an efficiency gap?
 Water tariffs recover less than 2/3 of the full capital
cost of the service (60%)
 Operating inefficiency of utilities creates a drag
 Non-revenue water of 34% versus best practice 10%
 Revenue collection of 72% versus best practice 100%
 Low number of connections per employees (259
connections/employee on average)
 Low public sector budget execution ratios lead to
unspent resources (US$0.2 bn)
There is a funding gap of $11.4 billion a
year – even after recouping inefficiencies
US$billion pa
LIC –
Fragile
LIC Resource
NonRich
Fragile
MIC
SSA
(4.8)
(7.6)
(6.1)
(3.6)
(21.9)
Spending
0.4
1.8
1.7
2.3
7.6
Efficiency Gap
0.4
0.6
0.7
1.3
2.9
Capital Execution
0.0
0.0
0.2
0.0
0.2
Operational Inefficiencies
0.1
0.2
0.3
0.3
1.0
Cost Recovery
0.2
0.3
0.2
1.0
1.8
Financing Gap
(3.9)
(5.2)
(3.7)
(0.0)
(11.4)
Needs
Zambia
Ghana
Malawi
Madagascar
Senegal
Cote d'Ivoire
Mozambique
Cape Verde
Lesotho
South Africa
Cost Recovery
Niger
Kenya
Burkina Faso
Rwanda
Namibia
Ethiopia
Capital Execution
Nigeria
Benin
Tanzania
Resource-Rich
MIC
LIC-NoFragile
1.4
LIC-Fragile
SSA
Percentage of GDP
A number of countries have an efficiency
gap in excess of 0.5 percent of GDP
Operational Inefficiencies
1.2
1.0
0.8
0.6
0.4
0.2
0.0
South Africa
Cameroon
Ghana
Namibia
Chad
Nigeria
Lesotho
Burkina Faso
Mozambique
Senegal
Rwanda
Uganda
Zambia
Cote d'Ivoire
Malawi
Benin
Niger
Tanzania
Ethiopia
Kenya
Madagascar
LIC, Fragile
LIC,Non-Fragile
MIC
Resource Rich
SSA
Percentage of GDP
A number of countries have a funding gap
in excess of 2 percent of GDP
12
O&M
Investment
10
8
6
4
2
0
Key Message #7
Cost recovery could be
improved without major
detrimental poverty impacts
6
5
6
6
LICNF
LICF
RR
MIC
Congo
Madagascar
Cote d'Ivore
Chad
Ethipia
Nigeria
Niger
Senegal
Mozambique
Kenya
Lesotho
South Africa
Rwanda
Ghana
Sudan
Benin
Zambia
Borkina Faso
Namibia
cape Verde
SSA
22
23
25
36
37
38
39
43
47
50
52
53
63
74
76
42
43
59
115
128
Effective residential tariffs per m3 at 10 m3/year (US cents)
309
On average water tariffs cover less than two
thirds of full capital costs of US$1.00/m3
Piped water subsidies are highly regressive
in their distributional incidence
0
0.2
0.4
0.6
Measure of distributional incidence
0.8
PROGRESSIVE
REGRESSIVE
Senegal
CAR
Gabon
Congo
Nigeria Kaduna
Togo
RDC
Nigeria FCT
Cameroon
Côte d'ivoire
Niger
Chad
Cape Verde
Burundi
Malawi Blantyre
Ghana
Guinea
Uganda
Malawi Lilongwe
Burkina
Rwanda
1
Cost recovery tariffs would be affordable
to MICs and LIC populations with access
Cost recovery tariffs would be affordable
to MICs and LIC populations with access
LOWER BOUND
LOWER BOUND – subsistence consumption defined as six
cubic meters at $1 each or 10 cubic meters at $0.60 each
Cost recovery tariffs would be affordable
to MICs and LIC populations with access
LOWER BOUND
Cost recovery tariffs would be affordable
to MICs and LIC populations with access
UPPER BOUND
LOWER BOUND
UPPER BOUND – subsistence consumption defined as
ten cubic meters at $1 each (full capital cost recovery)
Cost recovery tariffs would be affordable
to MICs and LIC populations with access
UPPER BOUND
LOWER BOUND
Key Message #8
Improving efficiency has a
tangible impact in sector
performance
Detrimental impact of utility inefficiency
on service expansion and quality
90
Percentage of sample
passing chlorine test
Average annualized
increase in access
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
85
80
75
70
65
0.0%
Employees per Hidden cost
connection
Above average
Below average
Employees per
Connection
Below average
Hidden Costs
Above average
SOE
corporatization
yes
High regulation
200
High governance
Unbundling
Private sector
management
Decentralization
Hidden Costs as percentage
of utility revenue
Mixed evidence on impact of institutional
reforms on improving efficiency
no
150
100
50
0
Key Message #9
Considerable cost
savings could be made
by adopting alternative
technologies
Adopting lower standards can reduce costs of meeting
MDG by 6 percent of GDP for fragile states
Zero scenario
14
Base scenario
12
10
8
6
4
2
LIC - Fragile
LIC - Nonfragile
MIC
Resource Rich
0
SSA
Percentage of GDP of country grouping
16
Key Message #10
Some countries may
simply need more time
to reach MDG targets
Time needed to meet MDG targets with
today’s budget envelopes
Years taken to reach MDG target
(counting from 2006)
MIC
RR
LICNF
LICF
Existing spending only
10
>30
>30
>30
Existing spending plus efficiency
gains
<10
20
20
>30