Capital investment needs for new infrastructure and rehabilitation of existing assets are estimated at $9.7 billion a year, 1.5 percent of the region’s gross domestic product. Maintenance requirements stand at $5.3 billion a year, 0.8 percent of the region’s GDP. For a handful of countries—including Democratic Republic of Congo, Kenya, Madagascar, Benin, and Niger—the cost of meeting the MDGs would be in excess of 7 percent of GDP, well beyond what could be feasibly attained. If these countries are to make any headway in meeting the MDGs, they may need to consider adoption of lower-cost technologies, such as standposts and boreholes, which would substantially reduce the cost of meeting the target.
African countries already devote $3.6 billion a year to meeting the MDG targets; 60 percent of this is domestically funded (see table). Recovery of the $2.7 billion lost each year to operational inefficiencies and poorly targeted subsidies would add to the public investment pool. With regard to capital investment, donors have a big role to play, particularly in low-income countries. Financiers from outside the Organisation for Economic Co-operation and Development also play a role in the low-income countries, while private finance for water supply infrastructure is negligible.
Even taking existing financing and recovery of inefficiencies into account, about half of the financing needed to meet the MDG for water is lacking.
Existing financial flows to water supply and sanitation