Feb26-28/ 2015 Dire Dawa

Assessment on Financing Mechanisms and Cost Recovery Systems of SWM in

Ethiopia

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1.Introduction

2.Objectives

3.Conceptual Frame work

4.Results and Discussions

5.Conclusions and Recommendations

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The increase of socio economic activities and the population dynamism has created huge financial burden on the municipalities

Municipalities in most cases are looking for finances from local or regional governments to finance capital and operational activities

This in turn results in inefficient sanitation services and expansion of diseases

Identifying the options of financing therefore enables municipalities to recover their costs ,and create job opportunities for citizens.

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The methodology employed for the compilation of the assessment is of both primary and secondary sources For primary sources, 20 municipalities are identified nation wide representing all the existing categories of towns on the basis of the number of their population including Addis AbabaThe MUDHco reports and related literatures and other pertinent information are also used in the assessment.

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2.1. General objectiveThe main objective of the assessment is to assess the existing cost recovery mechanisms of SWM in urban Ethiopia.

2.2. Specific objectives are to: Review the existing cost recovery system in SWM,

Identify key challenges in cost recovery system of SWM,Forward some recommendation to improve the cost recovery system in urban centers of Ethiopia.

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ISWM

Institutional Aspect

Social AspectTechnical Aspect

Finance & Economic

Aspect

Finance & Economic

Aspect

Political Aspect

Finance and Economic AspectBudget and cost accountingResource mobilizationFinancing operating expensesCost reduction &controlEmployment& Income generation

Institutional AspectsDecentralization and distribution of powerInstitutional& sectoral integrationPlanning& managementPvt sector involvement and User participation

Social Aspects

Waste generation & disposal patternUser ParticipationSocial conditions of worker

Political Aspects

Goals and prioritiesRoles and jurisdictions legal &regulatory frameworks

Technical Aspect

Technical design &planningResource recoveryHazardous and special waste treatment

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1. Financial challengesThe findings reveal that from 20 sampled towns/cities 19 municipalities claim to be underfunded –significantlyOnly Mekelle has sufficient funds and the largest budget of ETB 6.3 MillionHawassa and Bahir Dar face 33.3 % and % 57% respectivelyAddis Ababa also faces around 68% deficit

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Out of 20 municipalities 14 municipalities households

pay Small and Micro Enterprises directly –

But levels of payment are low –Average fee is 10-20

BIRR/month

Many SMEs have ceased operating, 4 municipalities

use Property tax and 2 municipalities use surcharging

on Water Bill.

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2. Institutional ArrangementsDiffer from cities to cities, and from regions to regionsIt reduces the accountability and transparency of the municipalitiesThe Ethiopian SWM Standard recommends that creating enabling institutional arrangement promotes cost recovery system.

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3. Capacity challenges Professionals lack the necessary skills to use modern technologies and innovationsMany officers in charge of solid waste management, particularly at the local level, have little or no technical background or training in engineering or managementSystem for capacity building trainings is not established to capacitate professionalsLack of raising awareness of the publics to convince them to be part of solution the existing financial deficits.

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Results and Discussions( Cont`d)

4. Legal related challenges Proclamations, standards are not translated in to actionsProclamations have their own limitations.

The assessment reveals that there is weak enforcement of legal frame works. studies indicate that legal frame work revision and enforcement is essential to improve the existing cost recovery system.

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7.1 Conclusions Often inadequate fees charged and insufficient funds

cannot finance adequate levels of service The budget allocated to municipalities is often

aggregated with other urban services and the possibilities of being used for SWM system is minimal.

The budget could not be released on time, and the absence of exploiting the all the available financial sources has worsened the situations

From the sampled 20 cities, 19 municipalities are significantly under funded 13

14 /20 municipalities pay directly to SMEs 4/20 and 2/20 municipalities are pay through

property tax and water bill The Institutional set up functioning currently

becomes an obstacle to carry out financial related management activities-such as implementing options of financing mechanisms and cost recovery systems

Capacity is one of the critical challenges that needs to be resolved to insure sustainable cost recovery system.

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Awareness creation with regard to cost recovery system found to be inconsistent and weak.

7.2. Recommendations There must be mechanisms to improve the cost

recovery system of SWM system by implementing utility services(water, electricity, and tax on business property on weight / volume based waste generated

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The budget allocated to SWM shall be disaggregated from urban services by establishing its own finance

Institutional arrangement shall be conducted to enable cost recovery to happen effectively

System shall be established to capacitate professionals and workers,

Awareness raising program plays role to increase users to pay for SWM system.

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Thank You

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