FEDERAL REPUBLIC OF NIGERIA

FEDERAL MINISTRY OF WATER RESOURCES

NATIONAL WATER SUPPLY AND SANITATION POLICY

Department of Water Supply and Quality Control

FIRST EDITION - JANUARY, 2000

NATIONAL WATER SUPPLY POLICY FIRST EDITION -JANUARY, 2000 INTRODUCTION: General: Water, next to air, is the most important need of man. In spite of the considerable investment of Governments in Nigeria over the years in this essential human requirement, a large population still does not have access to water in adequate quantity and quality. It is estimated that only 48% of the inhabitants of the urban and semi-urban areas of Nigeria and 39% of rural areas have access to potable water supply. In spite of these low figures the average delivery to the urban population is only 32 litres per capita per day (lpcd) and that for rural areas is 10 lpcd. The quality in most cases is suspect. Various reasons responsible for this situation include amongst others, poor planning, inadequate funding, insufficient relevant manpower, haphazard implementation, and above all the lack of a national policy for water supply. Historical Perspective Public Water Supply started in Nigeria early this century in a few towns under the management of the lowest administrative level. Amongst the early beneficiaries of these facilities were Lagos, Calabar, Kano, Ibadan, Abeokuta, Ijebu Ode and Enugu. The schemes were maintained with revenue from water rate collection with virtually no operational subvention from government. With the creation of Regional Governments in the early 1950s the water supply undertakings continued to maintain the schemes but the financial and technical responsibilities for developing new water schemes were taken over by the Regional Governments who also assigned 'supervisory high level manpower (Water Engineers and Superintendents) to the water supply undertakings. For the period of the assignment, all the allowances and part of the salaries of these officers were paid from revenue generated from their water rate, while these officers still retained their employment and seniority in the Regional Service. However, with growing demand and increasing cost, it became necessary for the Regional Governments to secure loans. The Regions were requested to set up independent bodies i.e. Water Corporations/Boards to develop, operate and manage the water supply undertakings. Hence, the first Water Corporation was formed in 1966 by the then Western Region with all the public water supply undertakings in the region, including their staff, assets and liabilities taken over by the Water Corporation. The staff of the Water Division of the Ministry of Works were also transferred to the new corporation. Today, all the thirty-six (36) States of the Federation and the Federal Capital Territory have Water Boards/ Corporations or Public Utilities Boards managing their public water supply undertakings. Their efforts are supplemented in many cases by Local Governments who supply water to small villages in their areas of jurisdiction. The Federal Government, in 1976, got involved in water supply when the Federal Ministry of Water Resources and the eleven (11) River Basin Development Authorities (RBDAs) were created to manage the water resources of the country and to provide bulk water, primarily for irrigation and water supply. The Federal Ministry also undertakes basic Hydrological Data Collection and Storage for National Planning purposes. Other agencies involved in public water supply, as aid and loan programmes, are the United Nations Children's Fund (UNICEF), United Nation Development Programme (UNDP), and a number of other bilateral, multilateral and External Support Agencies. Water Resources Geography Nigeria is divided into six main Hydrological basins. Geographically, in the far south are low-lying swamp forests, followed in a northerly direction by generally flat dense rain forests, hilly shrub lands in the middle belt, relatively flat savannah grasslands, and semi-arid areas in the far north. The central part of the country is marked by crystalline rock outcroppings and gently rolling hills. Hydrology

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The average rainfall is about 500 mm/year in the north (occurring April, through September), increasing to about 3,000 mm/year in the south (occurring March through October). The country is noted for its two major river systems: the Niger entering the country from the northwest, and the Benue entering from the Northeast which together with their many tributaries drain half the land area of the country. The two rivers meet at Lokoja, then move in a southerly direction into an extensive delta before discharging into the Atlantic Ocean. Other rivers flow directly into the Ocean or into Lake Chad. Many rivers in the north are intermittent, having water in them only in the rainy season, but the majority of the rivers in the south are perennial, flowing all year round, and are important sources of drinking and irrigation water. Hydrogeology About 60% of the country is underlain by crystalline rocks, 20% by consolidated sedimentary materials, and 20% by unconsolidated sedimentary materials. Static water levels in water wells range between zero in parts of the coastal alluvium to 200 metres in some sedimentary areas. In crystalline rock areas found in many parts of the north, well yields are unpredictable; where sufficient depth of weathering exists the area may be suitable for operation (minimum yield of 10 litres per minute), but only at specific localities where deep weathering and underlying fractures coincide are yields likely to be sufficient for motorized schemes. Groundwater quality in the country is good. Only in some areas are iron, nitrate or fluoride concentrations above recommended WHO levels. The corrosiveness of groundwater is also an important consideration in choosing materials for water supply equipment. Using pH as an index of corrosion potential, about 20% of the country is underlain by highly corrosive ground water (pH < 6.5), 40% by moderately corrosive groundwater (pH 6.5 to 6.8), and the remaining 40% by non-corrosive ground water (pH > 6.8). WATER SUPPLY Present Situation Nigeria is one of the signatories to the United Nations International Drinking Water Supply and Sanitation Decade whose objective was to supply water to all citizens of the country between 1981 and 1990. In spite of the efforts of various Governments at all levels, the water supply coverage in the country appears to be decreasing and deteriorating. One of the reasons for this deterioration is the enormous socioeconomic rate of development which far outstrips the level of water supply development. Other reasons include low investment level in operation and maintenance which accounts for frequent breakdown of the production facilities, and lack of proper management of the nations water resources. Rural water supply About 71% of those living in rural communities do not have access to safe water supply or adequate sanitation. Many entities involved in rural water supply include the following: the Federal Ministry of Water Resources, State Water Agencies, River Basin Development Authorities, Local Governments, and External Support Agencies such as UNICEF, UNDP, World Bank, JICA, CIDA and ZONTA International etc. These institutions employ their own implementation strategies and involve individual communities and LGAs to varying degrees. In most cases, however, services have been introduced with little or no community involvement. Urban and semi-urban water supply For the urban and semi-urban population only about 42% of the population have access to safe water supplies and adequate sanitation. The urban and semi-urban water supplies are being handled mainly by the State Water Agencies. The existing Water Works for urban and semi-urban water supplies often have problems associated with their designs, operation and maintenance and lack of integrated management planning. Because of the lack of proper water management mentioned above, many existing water works are now supplying less water than they were designed for. Lessons from the water Supply and Sanitation Decade During the Water and Sanitation Decade of the 1980's a number of lessons were learnt. a) The most important one was that the sustainability of rural water and sanitation investments is dependent on the degree to which communities are involved in the decision making, funding and operation of the facilities. Rural mechanized schemes are usually the responsibility of the State

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Water Agencies which in the past have provided fuel, operators, watchmen and repair services, but which increasingly are relying on the beneficiary communities to supply these. Tariffs for such schemes normally are not charged because the cost of revenue collection exceeds the revenues that can be collected and logistical problems associated with revenue collection are generally overwhelming. Since these rural systems cannot be operated on a commercial basis, water supply agencies minimize their financial losses by limiting their services. b) The problems experienced in achieving adequacy in the rural areas prompted the Federal Government to commence a decentralization programme. This is designed to make LGAs more autonomous, more responsive to local needs, and technically and financially capable of providing services. The programme is intended to end dependency on the central government and "top down" planning. This is being achieved by giving the country's 774 LGAs primary responsibility for planning and administration of their own development programmes, increasing their budget allocations, and requiring communities to take the lead in decision making and implementing development projects based on their particular needs. Several recent developments are helping LGAs to assume their increasing responsibilities: (i) the Federal Government Rural Development Policy update and Poverty Alleviation Programme are expected to provide a major capital injection into the water supply sector; (ii) the recently implemented Scheme of Service of Local Government Staff will allow LGAs to attract and keep qualified staff at all levels and in all areas of specialization; and (iii) direct LGA funding is increasing (the LGA share of the Federation Account has been raised from 10% to 20%) .

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SANITATION Present Situation Household sanitation facilities are fairly common in all parts of the country. Most households have one or two traditional pit latrines inside their compound. However, there is need to improve hygiene by introducing better latrines. Demand for improved latrines depends to a large extent on their cost, convenience and aesthetics. To date sanitation efforts have primarily been based on demonstrating twin-pit VIP latrines (ventilated improved pit latrines) designed for urban houses and multicompartment public latrines. Their high cost has meant limited demand. Affordable household latrines are key to improved sanitation practices. It would be necessary as a result of present situations to reintroduce hygiene education in schools. With the growing number of mega cities and increasing sizes of existing large cities, the issue of liquid and solid waste disposed into water bodies continue to receive little or no desired sanitation. Many sewage plant, where they exist, do not function efficiently. Also there are too many agencies claiming ownership for sanitation but its not responsibility. ORGANIZATIONAL STRUCTURE Present Situation Under the present dispensation, the following agencies have been used as operators in the urban, semi-urban and rural areas:-

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water

supply

policy

The Federal Ministry of Water Resources is charged with the responsibilities of policy advice and formulation, data collection, monitoring and co-ordination of water resources development (of which water supply is a component) at the National level. The River Basin Development Authorities are charged with the development, operation and management of reservoirs for the supply of bulk water for water supply amongst other uses in their areas of jurisdiction. The State Water Agencies are responsible mainly for urban, semi-urban and rural water supplies. In some States separate agencies exist for rural water supplies and urban and semi-urban water supplies.

The Local Government Authorities are responsible for the provision of potable water to rural communities in their areas of jurisdiction. However, because of the lack of funds and the gross shortage of manpower this function has not been effectively carried out in some local government areas of the country. 15 PRESENT FUNDING ARRANGEMENTS The State Governments fund water supply schemes through budgetary allocations to State Water Agencies. The funds are for capital projects, operation and maintenance. The SWAs are expected to generate enough money through water rate collection at least for operation and maintenance. Invariably, they do not collect enough revenue because they have not been allowed to charge economic water rates by Government. The FCT Water Resources Agency is funded by the Federal Government through the Ministry of FCT. Another source of funding of water supply is through commercial loans either from local sources or through International Lending Agencies like the World Bank and African Development Bank. Rural Water Supply is also partly financed by the Federal Government, International Agencies and some donor countries. NEED FOR POLICY The inadequacies outlined above in the Nigerian Water Supply and Sanitation industry call for a well articulated approach to water supply and Sanitation towards a systematic development of the industry over a defined period of time. The approach therefore should define an acceptable National Policy that will set up a planning process, research and manpower development, institutional structure, legal framework and financing strategy that will meet the socio-economic requirements of the country. POLICY Policy Objective: The centre-piece of Nigeria's water supply and sanitation policy, shall be the provision of sufficient potable water and adequate sanitation to all Nigerians in an affordable and sustainable way through participatory investment by the three tiers of government, the private sector and the beneficiary. Targets (i) The initial target is to meet the national economic target of improving service coverage from 40% to 60% by the year 2003. (ii) Extension of service coverage to 80% of the population by the year 2007. (iii) Extension of service coverage to 100% of the population in the year 2011. (iv) Sustain 100% full coverage of water supply and wastewater services for the growing population beyond the year2011.

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Consumption standards Separate water supply and sanitation considerations are made to match the three socio-economic profiles of the population as follows: Rural water supply guaranteed minimum level of service 30 liters per capita per day within 250 meters of the community of 150 to 5,000 people, serving about 250-500 persons per water point. Semi-urban (small towns) water supply represent settlements with population of between 5,000-20,000 with a fair measure of social infrastructure and some level of economic activity with minimum supply standard of 60 liters per capita per day with reticulation and limited or full house connections as determined by the beneficiaries / Government. Urban water supply 120 liters per capita per day for urban areas with population greater than 20,000 inhabitants to be served by full reticulation and consumer premises connection.

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Components of the Policy objective The elements of the policy objective include but are not limited to the following. (i) Increase service coverage for water supply and Sanitation nationwide to meet the level of socio-

economic demand of the nation in the sector. (ii) (iii) (iv) (v) (vi) (vii) (iix) (ix) Ensure good water quality standards are maintained by water supply undertakings. Ensure affordability of water supply and sanitation services for the citizens. Guarantee affordable access for the poor to sanitation services. basic human need level of water supply and

Enhance national capacity in the operation and management of water supply and sanitation undertaking. Privatise water supply and wastewater services (where feasible) with adequate protection for the poor. Monitor the performance of the sector for sound policy adjustment and development for water supply and sanitation. Legislations, regulations and standards for water supply and sanitation. Reform of the water supply and sanitation sector to attain and maintain internationally acceptable standards.

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Policy strategies In order to achieve the policy objective the following strategies are enumerated relative to each of the elements of the policy objective. Increase service coverage for water supply and sanitation nationwide to meet the level of the socioeconomic demand of the nation on the sector. (i) Undertake water supply and sanitation feasibility survey for all the States and the FCT to acquire baseline data for proper investment planning. (ii) (iii) (iv) (v) (vi) Rehabilitation and modernization of existing water supply works to restore them to their optimum operational capacity. Expansion of existing urban water supply works to enhance capacities to meet over grown demand. Distribution network repair and renewal for all urban water supply schemes. Comprehensive metering of all water supply schemes from abstraction through distribution to consumer connections. Maintenance of strict plumbing standards and codes for all consumer property and premises. Ensure dedicated connections to the electricity utility facilities for water supply works and pump station. Solar driven pumps to be given highest priority where applicable in the rehabilitation and construction of bore hole based water supply systems.

(vii) (viii)

(ix) (x) (xi) (xii) (b)

Construction of new water supply schemes to serve the segments of the population that is not served. Promote improvement of traditional sources of community water supply (protected spring orifices, protected hand dug well, rain water harvest, etc.). Promote improvement of sanitation (domestic and human waste disposal) facilities especially in the urban and semi-urban areas. Promote construction of sewage system in urban areas.

Ensure good water quality standards are maintained by water supply undertakings. (i) The WHO drinking water quality standards shall be the baseline for the national drinking water quality standard. (ii) (iii) (iv) (v) (vi) All water works serving 5,000 citizens and above to be equipped with a functional water quality laboratory of appropriate capacity. Maintain a national water quality reference laboratory network. Monitor and protect the quality of raw water sources for drinking. Monitor the output of water supply undertakings for conformity with drinking water quality standards. Traditional water supply sources shall be protected and traditional water quality practices promoted.

(c)

Ensure affordability of water supply and sanitation services for the citizens. (i) Water supply service cost reduction measures shall be pursued without compromising the quality of service. (ii) Improved management practice (financial management, operation and maintenance, abstraction and treatment techniques and control of water sources pollution) shall be institutionalised to keep the cost to the minimum. Institutionalise efficiency improvement techniques by water supply undertakings to reduce cost. All water supply undertakings shall be subjected to performance monitoring and evaluation program. Tariff policy shall protect the consumer from bearing the additional cost of the inefficiency of the water supply undertaking. All consumers shall be metered starting with Industrial and commercial consumers to communal outlets down to domestic consumers. Tariff policy shall guarantee cross subsidy to accommodate free supply of basic human needs level for the poor. Tariff policy shall ensure that the time for the return on investment provides adequate comfort for the consumer.

(iii) (iv) (v) (vi) (vii) (viii)

(ix) (d)

Research and development of appropriate affordable and low cost technologies for the disposal and recycling of all waste.

Guarantee affordable access for the poor to basic human need level of water supply and sanitation services. (i) Government shall sponsor capital investment for rural water supply. Token community contribution shall be to foster a sense of ownership, a necessary ingredient for sustainability. (ii) (iii) (iv) The rural communities shall take full ownership of water supply facilities provided by the Government. Cross subsidy shall be implemented to accommodate the needs of the urban poor. Government shall subsidise for the poor where cross subsidy is not applicable.

(e)

Enhance national capacity in the operation and management of water supply and sanitation undertaking. (i) Foreign water supply operators shall be encouraged to form joint ventures with Nigerian companies when operating in the country. (ii) (iii) Local manufacture of water supply equipment and treatment chemicals shall be promoted. Government shall support Technology transfer arrangements for the local manufacture of major water supply machinery and equipment (pumps, trunk main and distribution pipes, valves and meters). Government shall strengthen the National Water Supply Training Network (which is at its infancy) of the National Water Resources Institute to support the training of water supply operatives. Provide technical support for capacity building at State and Local Government levels for the construction of waste disposal facilities. Encourage rapid manpower development through adequate funding of existing relevant training institutions such as NWRI, Universities, Polytechnic, Technical and Vocational Colleges and in-house training capabilities of the existing agencies. encourage within the nation's industrialisation policy, local manufacture of water supply equipment and water treatment chemicals: Establish water supply agencies to operate on commercial basis: Encourage and fund research, development and studies in the water supply sub-sector.

(iv)

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(vii) (viii) (ix)

(f)

Privatise water supply and wastewater services (where feasible) with adequate protection for the poor. (i) The Federal Government shall create the enabling environment for private operators to participate in water supply and wastewater services in Nigeria.

(ii)

The Federal Government shall establish a body to be charged with the responsibility of regulating the activities of water supply and wastewater undertakings in a sector permissive of greater private participation. The Federal Government shall promote private sector participation in the water supply industry to attract resources for lasting development of the sector. The Federal Government shall formulate laws to regulate the activities of the private operators in the water supply and wastewater services to guarantee adequate protection of consumers as well as fairness to the service provider.

(iii) (iv)

(g)

Monitor the performance of the sector for sound policy adjustment and development for water supply and sanitation. (i) Maintain a national monitoring network for water and sanitation at the Federal, State and Local Governments. (ii) (iii) (iv) (v) Institutionalise monitoring at three tiers of Government. Promote community participation in monitoring and evaluation. Maintain a national water supply and sanitation database. Ensure feedback of information to promote proper planning and policy adjustment.

(h)

Legislations, regulations, standards and laws for water supply and sanitation. (i) To develop standards on design procedure and material quality for water supply services. (ii) (iii) Regular review of all legislations and laws relevant to water supply to ensure that they meet modern day requirements for adequate water supply delivery. Implementation of the provisions of the policy.

(i)

Reform of the water supply and sanitation sector to attain and maintain internationally acceptable standards. (i) Commitment to carryout profound reforms in the way the water supply and sanitation sector is managed in the country. (ii) The reform agenda will be developed based on the following uiding principles: a. Water is an economic good: Universal and sustainable provision of water supply and sanitation services is possible only if water is recognized as an economic good, subject to the relation of supply and demand. Thus peoples demand for water is a function of the price of water. Their willingness to pay for water is influenced by the level of service they desire and the quality of the service they receive (people will pay if services are good). As the price of water depends on the cost of systems, appropriate technologies that conform to consumers demands and willingness to pay should be adopted. Treating water as an economic good enhances financial viability, by ensuring that tariffs cover the costs of investments and operation and maintenance. b. Equity and poverty alleviation: The poor suffer the most from lack of access to services and often pay the most for water. Government subsidies to the sector have in the past benefited the rich disproportionately. In addition, women bear an unfair burden, not only in performing household water tasks, but also in coping with water-borne disease in their families, particularly children. Thus, reforms in the sector should aim to provide access to water and sanitation in an equitable manner, while balancing economic and social considerations. Appropriate arrangements should be made, for instance target subsidies, to ensure access for

the poorest segments of the population c. Autonomy of Water supply and sanitation services providers: This principle recognizes that water supply and sanitation can be most efficiently and effectively delivered if service providers operate as businesses. As such, utilities, whether public or private, should be autonomous and free from political interference. While subject to appropriate economic and service quality regulation, utilities should have autonomy in their managerial, financial, technical and personnel functions. This principle promotes enterprises that operate along commercial lines and have the incentives to provide adequate services that respond to customer demands and expectations. Additional sources of finance are also possible when water enterprises are perceived to be viable commercial enterprises. Management at the lowest appropriate level: Water should be managed at the lowest appropriate level (appropriate being key and a function of the specific conditions in the concerned areas and communities). This principle promotes consumer appreciation for the value of water and sanitation investments. If local conditions and demand are taken into account in the planning, financing, implementing and operation of water supply and sanitation systems, the sense of ownership and willingness of communities to share in the cost and operations and maintenance will be greatly enhanced, thereby increasing the sustainability of the systems. Participation: Increasing the coverage and quality of services to ever growing populations will require the involvement of important segments of society that have been traditionally excluded. The private sector (operators, commercial banks, consultants), communities, as well as NGOs have a critical role to play in the planning, design, financing, implementation and operation of water supply and sanitation systems. Their potential for additional finance and technical expertise should be tapped. Other benefits inherent in participation are greater transparency, efficiency, accountability to the consumer, and self-sufficiency. Policy making and regulatory role of government: This principle reaffirms the fundamental role of the State as a facilitator, setting macroeconomic and sector policies that create an enabling environment, ensuring coordination among stakeholders and overseeing the performance of utilities, to accomplish its social and economic development objectives. At the same time it precludes its intervention in the actual delivery of services, which are more efficiently accomplished by autonomous entities, operating along commercial practices and enjoying incentives to perform efficiently and to increase coverage. This principle requires that the roles and responsibilities of government, utilities and other stakeholders be clearly spelled out.

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Policy Instruments The instruments for the operation of water supply and sanitation policy shall be the various Federal, State and Local Government laws and bye-laws establishing the RBDAs, State and Local Government Water agencies and their respective water supply regulations and water quality standards. EXISTING LEGISLATIVE PROVISIONS At the Federal level there is a Decree for Water Resources, the Decree No. 101 that vests rights and control of water in the Federal Government which took effect from 23rd August 1993. There are also decrees establishing the River Basin Development Authorities and the National Water Resources Institute - the training arm in the sector. At the State Level, the various State Water Boards and State Rural Water Supply and Sanitation Agencies have enabling Acts setting them up to supply potable water to the inhabitants of their respective states. However, for some reasons, these Acts have not been effectively enforced.

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At Local Government level, the various laws setting them up define rural water supply as one of their primary functions. DEFINITION OF URBAN/SEMI-URBAN AND RURAL AREAS IN TERMS OF WATER SUPPLY For the purpose of this policy; (a) A rural water supply scheme is defined as a simple scheme serving a population of less than 5,000 people. (b) A semi-urban water supply scheme is defined as a scheme providing water to population between 5,000 to 20,000 people. (c) An urban water supply scheme is defined as that providing water to a population larger than 20,000 people. (d) Basic service means a protected, year-round supply of 30 litres per capita per day in line with against the 30 litres basic minimum utilized by UN Agencies preferably within 250 metres of the community and not exceeding 500 metres, serving about 250 persons per outlet. Higher levels of service are encouraged, but communities must pay for the added cost. OPERATING AGENCIES AND INSTITUTIONAL RESPONSIBILITIES The Federal Ministry of Water Resources shall be responsible for policy advice and formulation, data collection, resources and demand surveys, monitoring, evaluation and co-ordinating of water supply development and management, studies, research and development including the following; (i) Establishment and operation of the National Water Quality Laboratories and Monitoring Network and water quality standards. (ii) Maintenance of database on water supply and sanitation facilities and performance. (ii) Mobilisation of national and international funding and technical support. Promote and coordinate other collaborative activities by other government and Non-governmental agencies in the sector. (iii) Provide technical support and assistance to the State and Local Government Water Supply and Sanitation Agencies and the Community water supply and sanitation committees. (iv) Creation of an enabling environment for meaningful private sector participation in the sector. (v) (vi) Provision of a framework for the regulation of private sector participation in water supply and sanitation. Under Decree 101, formulate laws for private initiatives in the water supply industry. Assist individual agencies, and be responsible for the maintenance of the hydrological primary network

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The River Basin Development Authority shall be responsible for the establishment and supply of bulk water. The National Water Resources Institute shall be responsible for manpower training, research, development and studies under the National Water Supply Training Network in the water supply sector. The State Water Supply Agencies shall be responsible for the establishment, operation, quality control and maintenance of urban and semi-urban water supply systems. They shall also be responsible for licensing and monitorine of `rivate water supply and monitor the quality of water supply to the public. The States will also provide technical assistaNce tn the Local Government rural water supply units. The Local Governments shall be responsible for establishment, operation and maintenance of rural water supply schemes, in conjunction with' the benefiting communities. This shall be through the establishment of a unit that shall be technically equipped, adequately funded and manned. MANPOWER DEVELOPMENT In view of the present inadequacy of manpower, it shall be the responsibility of the three tiers of Government to provide adequate training programmes to meet manpower requirements. To achieve this

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goal, 5% of the annual personnel and overhead costs for water supply shall be allocated to manpower development at each tier of Government. 32. FUNDING In order to meet the policy objectives stated above it has been estimated that 404.522 billion Naira will be required to address the absolute demand gap and will increase annually by an average of about 25 billion Naira per year to meet up with the additional increase in capacity of the existing water supply systems and establishment of additional ones. In view of the magnitude of this amount and the fact that the provision of adequate water supply to the population is the most important ingredient of any human and economic development, it is expected that the 3 tiers of government shall accord the attainment of this objective the highest ranking in priority through allocating adequate and reasonable funds to enable raising the urban and rural coverage for water supply to a national average of 60 percent from the present 40%. Capital Projects Consequently the following funding principles shall apply for capital projects a) (b) (c) (d) Agency The Federal, State, Local Governments and beneficiary communities shall share cost of capital investment in water supply and wastewater projects. The funds shall be raised through budgetary allocation, loans from financial institutions, raising bonds, contribution from communities by rates and levies, and external loans. Banks shall be directed to loan money to the water supply sector as they are now lending to the agricultural sector. Cost sharing for capital investment Rural Supply water Small Towns Water Supply 50% Urban Supply Water

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Fed Govt State Govt 25% 30% 60% Local Govt Community

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30%

20% 5%

15% 5%

10% nil

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Operating Costs The principle of sustainability ensures that little or no subvention from Government is required to support operation and maintenance. (a) For rural water supply operation government intervention will be in the form of technical assistance in the training of local private tradesmen and community mobilization.

(b) (c) (d) Agency Fed Govt State Govt Local Govt Community

For small towns water supply O & M is to be funded though tariff paid to private operator where the community retain ownership of the facility. For urban water supply appropriate tariff structure should cover the cost of production, operation ad maintenance as well as replacement. Cost distribution for Operation and maintenance Rural WSS Nil 10% 20% 70% Small towns WSS Nil Nil Nil 100% Urban WSS nil 100%-Tariff nil nil

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Channelling of External Grant Assistance: External grant assistance will be needed to supplement Local, State, and Federal funding for the implementation of the RWS/S Programme. These funds can be channelled through the Federal Government to State and LGA Construction Grants Accounts as done for external loans. A project management unit at the state level linked to the State RWS/S Agency may be established to provide technical assistance and to recommend to the Federal Government disbursement from the grant funds. To ensure overall coordination of external inputs at the State level; ESAs should collaborate and plan their assistance through the FMF, NPC and FMWR. The State RWS/S Director and FMWR would be expected to report periodically on the status of disbursements of grant funds to the relevant ESA. Channelling of External Loans: External grants/soft loans for RWS/S will be negotiated at the Federal level and on lent to the State Governments. The FMWR, through the FMF, should act as the central recipient agency for lending in the sector. As external-financing agencies will generally require specific accounting, disbursement, and auditing procedures to enable them to monitor the use of loan/ funds, a separate domiciliary account should be opened for this purpose. It may be possible in some cases that the Federal Government would be implementing the project directly. Whichever agency is implementing (State or Federal) should be responsible for producing the counterpart funds. Peri-Urban Water Schemes: The Peri-urban areas are the unplanned urban slums where marginalized urban poor live. Funding of water supply in these areas would be as follows: (a) Federal Government to provide basic water supply facilities (water sources and storage) while the benefiting communities in association with the ESAs and NG0s would provide the distribution network. The communities would also collect water fees for operation and maintenance. State Government provision of basic water supply facilities (water sources and storage) while the benefiting communities in association with the ESAs and NG0s would provide the distribution network. The communities would also collect water rates for operation and maintenance. Federal and State Governments to provide the basic water supply facilities with the NG0s mobilizing the benefiting communities in providing distribution network and collecting of water fees for operation and maintenance of the systdms.

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(b)

(c)

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Recurrent Expenditure: The ectablishment of water supply scheme is one aspect while the continuous operation and maintenance is much more demanding in terms of financial outlay. Moreover, water has often mistakenly been taken to be a free commodity for which the consumer should pay very little or nothing. In view of the enormous capital and recurrent outlay in water supply sector, this impression must be reversed. Consumers, depending on level of income and consumption, shall be made to pay appropriate rates for recurrent cost and in some cases, capital cost recovery. The water supply systems shall therefore be operated on the following basis; Urban Water Supply Schemes: (i) Industrial and commercial consumers shall be metered and charged economic rates, which shall cover recurrent costs and full capital recovery components. Domestic consumers and non-profit making institutions shall be charged to cover recurrent and 50% of capital costs. (ii) Semi-Urban Water Supply Schemes: Industrial and commercial consumer shall be charged rates which will make up for recurrent and 50% capital recovery while domestic consumers and non-profit making public institutions will pay rates to cover the recurrent costs only.

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Rural Water Supply Schemes: Rural water supply is social service oriented and tied to health care delivery and poverty alleviation. Rates shall be charged to cover operation and maintenance costs. No capital recovery cost shall be charged as incentives for rural developments. Tariff Structure: In view of the need to ensure efficient operation and maintenance of the water supply system, the water supply agencies shall review tariff structures as the need arises to ensure recovery of operation and replacement costs. (iii) Conditions of Service: Government should recognize the commercial orientation and essential service nature of water supply industry and approve staff remuneration that reflects the demands of the industry. INTER AGENCY RELATIONSHIP Federal Level: The Federal Ministry of Water Resources (FMWR) shall formulate National Policy and coordinate the activities of all the Water Supply Agencies (WSAs) in the country. The Ministry, through its Department of Water Supply and Quality Control shall give policy advice to the States on water supply activities, on issues concerning expected levels of service (quality and quantity), standards for equipment and materials, guidelines on loan sourcing and other technical information necessary for planning and effective operation. The River Basin Development Authorities (RBDAs) shall report to the Ministry on the quantity of water harnessed, sold and/or released for water supply and other relevant data on their dams, storage and appurtenances. External Support Agencies shall clear their programmes, including loans and grant proposals with the Federal Ministry of Water Resources before embarking on their implementation. Records of such ensuing arrangements shall also be made available to the Ministry. These information will be sent in biannually. State Level: The State Water Agencies (SWAs) shall provide all basic information on their existing and proposed projects to the FMWR, such information would include, water supply sources, volume of water pumped, quantity of chemicals, data on water quality, pipe types, sizes and lengths and any other relevant information that would be required by the FMWR. The SWAs shall also provide technical support to the LGAs in the areas of planning, design and supervision of their water supply schemes. The SWAs shall be autonomous and self-accounting. However, for fast and effective decision making there shall be a supervisory outfit which shall be headed by a personnel higher than the General Manager of the SWA. The

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45.

46.

personnel shall have direct access to the State Chief Executive and/or the State Executive Council, and should preferably also act as the chairman of the Board of the SWA. The head of the special outfit shall coordinate all water supply activities in the State, including rural water supply. 47. LGAs. Local Governments shall be responsible for water supply to the rural areas in conjunction with the benefiting communities. Records of their water supply activities including their operational outfit shall be maintained and copies made available to the State Supervisory Outfit on a bi-annual basis.