Validation of the UNICEF fiscal diagnostic tool for SDGs 6.1 and 6.2 in East and Southern Africa using the analytical hierarchy process (AHP)

Abstract

The UN High Level Panel on Water notes that a total annual capital expenditure (CAPEX) of $114 billion and operation and maintenance expenditure (OPEX) of $129 billion is required globally to meet the safe drinking water and sanitation targets 1 and 2 of Sustainable Development Goal 6 (SDG 6). In Sub-Saharan Africa, $36 billion is required and UNICEF estimates $15 billion is required to meet these targets in 21 countries in East and Southern Africa. Currently, only 15% of the financial investments in the sector are accounted for, which falls significantly short of delivering SDG 6. Consequently, innovative finance tools that maximise taxes, tariffs and transfers (3ts) are required to mobilise finances for the region's sector. This paper presents a diagnostic methodology for identifying bankable and blended finance projects in East and Southern Africa's water and sanitation sector. Potential projects were identified in Malawi, Mozambique and Ethiopia. Findings from applying the AHP (analytical hierarchy process) analysis recommend the use of the decision-making tool for prioritisation and selection of water and sanitation projects in the context of multiple projects requiring blended finance. The methods are applicable to other parts of Sub-Saharan Africa to enhance project pipelines whose collective cost and revenue mitigate investment risk.