Government Contributions

Government contributions include financial and non-financial resources, which are covered by local, regional or central governments to solve water and sanitation problems.

(Adapted from SIJBESMA et al. 2008)

Government contributions can be of several types:

• Grants and subsidies: By definition, grants are transfers of resources that do not require repayment or compensation. These can take the form of budgetary allocations or subsidies from the central or local government. Recipients can be communities, neighbourhood associations, single households or small-scale entrepreneurs. The grant can be for various purposes, such as setting up a microfinance scheme for sanitation related investments, covering connexion costs, or the implementation of a small-scale sludge service for pit latrines.
• Loans: In contrast to grants, loans have to be repaid to some extent (depending on their specific characteristics). The amount of loan and the interest rate also depend on the decision of the respected government and the type of loan.
• Central government transfers: These are budgetary appropriations that are a common way for governments to finance services out of taxation. These transfers to local government bodies at the intermediate level are designed to serve specific purposes of which sanitation services could be one.
• Local revenue sources for municipalities: Ideally, municipalities in a decentralised setup should be able to get resources from citizens to provide essential services. However, this is normally not the case for municipalities in developing countries. Some mixed schemes which combine central government transfers and local municipality revenues are being used to a limited extent for sanitation.