The Minister of Finance, National Planning and Budget, Mrs. Zainab Ahmed, yesterday said the federal government was considering opportunities embedded in green bond and other sources of green finance to fund access to water, sanitation and hygiene (WASH).
Green bond is a financing instrument used in funding projects that have positive environmental benefits. Proceeds from such bonds are earmarked for green projects. The federal government had in 2017 issued a sovereign bond in that direction.
She spoke yesterday during Africa’s Finance Ministers’ Meeting (FMM), which was virtually hosted by the Save Water for All (SWA) in collaboration with the World Bank, the UNICEF and the African Development Bank (AfDB).
Zainab, who expressed the federal government’s commitment towards improving investment in water and sanitation, said: “We see opportunity in green bonds. We are also vigorously trying to access other sources of green financing ideal for the development of our water sanitation sector.
“We also saw an opportunity, through the COVID-19 pandemic to educate not just the people but both the executive and the parliament to understand the wisdom of investing more and more in the WASH sector since investment in water and sanitation are actually an investment in health, education and the economy.”
She added that the government has exhibited its commitment to improve access to safe water when it collaborated with state and local governments and development partners to declare a state of emergency in the water sector in November 2018.
“This declaration was quickly followed by a launch of a national action plan that indicated a strong political leadership toward reaching universal access to safe water.
“This action plan gives us an opportunity to strengthen the political leadership and also create and sustain existing partnerships and also mobilise the community to participate so that behaviour can change,” Ahmed said.
According to her, “access to clean water in Nigeria is still a daily challenge for many of our people. This problem is particularly acute in the Northern part of Nigeria. It contributes to the very high prevalence of water-borne diseases and threatens lives and livelihood especially of small holders’ farmers.”
She added that her ministry “is a major stakeholder in this endeavour. And we are working with the Federal Ministry of Water Resources to continuously increase our investment in water and sanitation, recognising the fact that investing in WASH is actually investing in human capital development and direct investment into the economy.”
The Chief Executive of SWA, Ms. Catarina De Albuquerque, in her welcome address, noted that “smart investment in water saves lives and helps the economy to recover and is making a difference all around the world.”
She added that water, sanitation and hygiene initiatives in Nigeria has continued to have a positive impact on education.
The Acting Vice President of AfDB, Ms. Wambui Gichuri, said investment in WASH would not only provide employment opportunities but create opportunities for youths.
Gichuri noted that the annual investment requirement in Sub-Saharan Africa to meet SDG 6 is $35 billion while North Africa needed $4 billion.
She said: “This is many times more than what that has been historically invested. The AfDB will continue to prioritise the water sector. The bank has invested over $6 billion in WASH. It is also mobilising $160 million green climate finance to fund water and sanitation. We are also placing emphasis on private sector participation as an option for a lot of players to afford and expand sustainable management of financing.”
The Executive Director of UNICEF, Ms. Henrietta Fore, said it was strategic that the meeting took place at a moment the world was faced with the challenges of COVID-19, which has exposed the weaknesses and inequalities associated with poor funding of WASH in dramatic ways.
Fore, however, noted that the government would be under enormous fiscal pressure and might not be able to fund social programmes as COVID-19 is deepening global recession.
This, she said, represented a huge threat not only to development progress but to social stability.
She, therefore, challenged the finance ministers to come out with lasting policies for financing WASH through policies that would maximise value from existing national funding and mobilise additional funding to close the gap in water and sanitation by gathering more partners around the world, including the private sector.
“So let us work together to develop and deploy investments and solutions to ensure safe water and sanitation and handwashing a smart and necessary investment,” she said.
Also, the Deputy Executive Director of UNICEF, Mr. Omar Abdi, said the international agency was discussing on how to improve WASH financing during and after COVID-19 era.
Abdi described water and sanitation as a human rights needs that could have catalyst impact on other sectors of human life and the economy.
“Water scarcity threatens more and more communities each year. We are witnessing increased competition for the scarce water resource. This situation demands new solutions and new approaches, including better water governance and efficient management in the face of changing climate.
“Sanitation is a public good and requires public funding to ensure equity and safe management of waste. Quite too often these investments are not being made. We believe that inaction will bring greater costs measured in lost productivity and rising healthcare challenges and pollution.
“A recent report estimated that Sub-Saharan Africa collectively needed to spend 2.5 per cent of its GDP to extend safe sanitation. A substantial aspect of this must be targeted to reach the most vulnerable and the poor. This is an investment we must make. Let us work together to make this vision a reality for everyone, every community and every family and every child,” Abdi said.
The Director-General of the World Health Organisation (WHO), Dr. Tedros Ghebreyesus, also stated that investing in water is critical in preventing the outbreak of diseases like cholera.
Ghebreyesus said all humanity is at risk when some segments of the population are unprotected, noting that underinvestment has left 800 million Africans without safe water and more than 700 million without basic sanitation or the means to wash their hands.
Similarly, the World Bank’s Managing Director for Development Policy, Ms. Mari Elka Pangestu, said that finance ministers would appreciate the evidence that investing in WASH is critical to health and economic growth by helping to create and sustain millions of jobs.
Pangestu said a dollar investment in WASH would create four dollar returns “Water is a critical input for productive activities including agriculture, SMEs and large industries. Indian solution has shown the world that a large scale supply of safe water could be delivered in a short period of time,” she said.
In his contribution, the SWA High-Level Chair and former Prime Minister of Australia, Mr. Kevin Rudd, made the social, political and economic case for investing in WASH.
Rudd said: “My argument is that even in this crisis, acting now for sanitation is excellent politics for each African government bearing in mind that a lot of economic and political loss comes as a result of not investing in water. Globally, we lose $260 billion every year in economic growth through inadequate investments in sanitation. Non-performance in sanitation takes 1.5 per cent from your GDP.”