Financing the Millennium Development Goals for domestic water supply and sanitation

The publication addresses the major issues relating to financing for the water sector, including the implications of the MDGs and the financing gap. It also proposes strategies for how overseas
development assistance (ODA) and other forms of finance could be improved, drawing on examples from a variety of developing countries.
The MDG targets can only be achieved if water supply and sanitation (WSS) resources are both used more effectively and increased. Some extra resources could come from ODA. Other broad strategies should include: directing resources towards the greatest need and targeting them more effectively; improving cost-effectiveness, for instance by choosing low-cost technologies and ensuring sustainability of systems; allocating a bigger share of ODA and domestic public sector finance to WSS; improving WSS-related governance; integrating WSS into poverty reduction strategies and national sustainable development plans; using resources to lever other forms of financing, e.g. local microcredit schemes; developing pro-poor cost recovery mechanisms; working in partnership with civil society and communities to build on their commitment, resources and skills.
Much of the current debate about WSS financing concerns the involvement of the international private sector. This report states that lack of access to WSS is bound up with poverty on many levels, from state to household. Using public finance to boost international private sector investment is not necessarily the best way to serve the interests of poor people.