Background
By the end of the nineties, budget support became the priority model for the Dutch development cooperation. The Netherlands minister of Foreign Affairs, Mrs. Eveline Herfkens, was one of the front runners. Budget support was not only provided to the general budget of national governments, but also to sectors for which the term Sector Wide Approach (SWAp) was used, or the equivalent Sector Wide Budget Support (SWBS). National institutions would get more ownership by having the driving seat of sector coordination and budget allocation. And donor funding would become more harmonised, efficient and at distance. In Mozambique, for example, DNA had to administer over 500 different projects in the period 1995-1999 (Ton Negenman, Mozambique case study in GON (2002)). The World Bank had already practised the model in so-called Sector Investment Programmes (SIPs) and the health and education sectors were the first in which the approach was implemented by many donors.
Preparations
In October 2000, several Dutch organisations reviewed the feasibility of this approach for the water sector for some of the water focus countries, including Mozambique (GON (2002)). It was concluded that the Water and Sanitation sector was more complex than health and education. It would require a clear leading institution to make Sector Wide Budget Support happen. As most countries, including Mozambique, could not yet fulfil the strict criteria for an effective introduction of Water Sector Budget support, the review recommended to see the modality more as a process of capacity building towards the ability to deal with a Sector Wide Budget and to lower the threshold criteria. Among the identified risks were the need for centralisation (while most countries were decentralising their national responsibilities), the loss of control over efficiency and effectiveness of use of donor funds, the loss of attention for cross sectoral and cross cutting issues (such as preventive health, IWRM, poverty and gender) and lack of ownership for the model by being seen as ‘again another donor fashion’.
Mozambique
The Netherlands had already made some steps in Mozambique towards this concept, such as the co-funding in the World Bank National Water Sector Programme for the large towns. Mozambique had also developed a kind of basket funding model for rural water and sanitation (PRONAR) and low-cost sanitation. Nevertheless, the Mozambique case study that was discussed by the review group in 2000 showed a number of weaknesses and challenges for the introduction of Sector Wide Budget Support (GON (2002); pages 23 – 34; written by Ton Negenman; former sector specialist at EKN; text from end 1999).
Forward pressure
The Netherlands Minister of Foreign Affairs was really determined about her policy changes, which had a considerable impact on the bilateral support in the water sector in Mozambique. The traditional way of project funding was prematurely phased out (such as the SAS project in Nampula). And the SWAp/Sector Wide Budget Support was developed, despite of a quite critical feasibility study and absence of other donors that were in support for this change. The later IOB sector support evaluations were questioning why such positive decision was taken (IOB 2006 no 301; IOB 2008 no 317, footnote 51 on page 112).
The time required for this change resulted in a drop of the Dutch financial support to the water sector in Mozambique between 1999 and 2003 (see graph in Timeline guide), although the Limpopo floods resulted in an increase of the overall budget support. The correct way in which Mozambique had been dealing with the funds for the rehabilitation after the Limpopo floods was an indication to the Netherlands that Mozambique was ready for this type of ‘open’ funding, for which the budget was not predetermined (oral information Ton Negenman, June 2023). Spending pressure for the ‘water budget’ at the Dutch Ministry might have been another factor.
Start in 2002
In Mozambique, the Sector Wide Budget Support is known as ASAS (Apoio Sectoral no abastecimento de Agua e Saneamento). The first agreement was signed in 2002, and it was the first for the Netherlands. In 2006 Yemen and Benin would follow. Apart from a small contribution of Helvetas, the Netherlands would remain the only donor providing this water sector budget support in Mozambique.
Challenges
The implementation has been very problematic. In 2004, the support was put on-hold because of lack of progress. In 2006, the ASAS support was prolongated despite of several ‘reservations’, but it was decided to re-introduce additional project funding (‘diversification’), such as for PRONAR support through UNICEF and CARE, and urban water supply through central PPP-funds and ORET (VEI). In 2011, a 5th phase of ASAS was approved, but ASAS-V cannot be considered as Sector Budget support. It is to be seen as programmatic support to DNA for the implementation of a five-year plan of activities that were agreed upon. The budget included a large component of Technical Assistance for studies, plans, and guidelines. ASAS-V was suspended during the course (IOB 2017, nr 418). In 2019, it was completely transformed into an IWRM support programme in which some elements of ASAS were maintained. This resulted in a type of hybrid set-up with a mixture of activities and general support to the individual beneficiary organisations, which did not lead to a coherent IWRM-programme. This was critically assessed in the Mid Term Review of this last-mentioned programme (MDF 2022).
Review 2007
The first evaluation of the Sector Wide Budget Support for the water sector in Mozambique was made in 2007 by CDP in a Mozambique case study report. The harsh conclusion was that DNA, the political will and the donor community were not ready for this aid modality and that the Netherlands could have better continued with SAS in Nampula, which could be seen as a sub-SWAp at decentral level. In its attempts for ‘repair’ (the earlier mentioned diversification), the Netherlands is bringing in more inconsistencies and de-harmonisation. An affiliation with the development of a sub-sector SWAp for rural WASH was the main recommendation.
With the lack of other donors, the water sector budget remained too small and most of the Dutch funding went into general costs for DNA, the construction of the new offices, debt serving and tax arrears. Only 25% was spent on implementation (in rural water supply), but for which it was hard to specify (count) beneficiaries and improved coverage.
The high turn-over of staff for this sector with low salaries remains one of the key problems. Moreover, TA has been too much focused on technical capacities, while there was more need for planning, administration and stakeholder relations when transforming to a sector wide approach.
Conclusion
Despite the preparatory work, the implementation of SWAp in Mozambique confirmed the (not fulfilled) conditions and risks identified by the review group during the workshop of 2000 and the specific challenges defined in the case study. The capacities of DNA, the limited political will and the lack of willingness of other donors to join should have been seen as red flags, and a better managed introduction at decentral and sub-sectoral level should have prevailed (CDP 2007).
Another side effect of the sector budget support by external donors is that the contribution from the National resources did stay behind. The IWRM budget per capita is assumed to be among the lowest in the SADC region, despite all the challenges and needs.
References
ActforPerformance (2016). Mid-Term and Value-Money study of the Apoio Sectoral ao Sector de Águas (ASAS) program (English draft Report, 30 July 2016); no URL
ActforPerformance (2016). Mid-Term Review and Value-for-Money study of the Apoio Sectoral ao Sector de Águas (ASAS)-V program (Power point June 2016); no URL
CDP (2007). Evaluation of sector approaches in the water sector. Country report Mozambique. Utrecht: CDP Utrecht and Delft: UNESCO-IHE (Woersem v., B., Zijlstra P.J. and Juizo D.)
CDP (2008). Evaluation of Sector Support and Approaches in the Water Sector (Woersem B. van, Heun J.)
GON (2002). Sector Wide approaches for water and sanitation development (including Mozambique as a case); (MFA); NICC A10388
IOB (2006). From Project Aid towards Sector Support. An evaluation of the sector-wide approach in Dutch bilateral aid 1998-2005. IOB Evaluation no. 301. The Hague: MFA (main author: Van Niekerk)
IOB (2008a) Het Nederlandse Afrika beleid 1998 – 2006 (Mozambique often mentioned, country description page 170-171); Evaluation Report 308
IOB (2008b). Sectorsteun in milieu en water; IOB Evaluation No 317; (Niekerk)
IOB (2017). Policy Review of Dutch aid policy for improved water management, 2006-2016; Mozambique country study (Turner S.); Evaluation Report No 418
MDF (2022) Mid Term Review IWRM programme; main authors: H. van Dijkhorst, D. Juizo and D. Bouman; no URL
Version management: Original text written by D. Bouman, May 2024
