Research Finds Water Sector Corruption A $75 Billion Problem
By Sara Jerome,
@sarmje
A big chunk of cash disappears down the drain each year due to corruption in the water sector.
According to Transparency International, a nonprofit based in Germany, about a tenth of water sector investment is lost to corruption. The nonprofit cited a new research paper from the watchdog group known as the Water Integrity Network.
How much money is being lost altogether?
“Although there are no reliable estimates of total losses, illustrating the need for better research and data, every 10 percent of investment that is lost corruption implies annual losses to the sector in the excess of $75 billion; some guesstimates put potential losses many times higher,” the research paper said.
Two top examples of corruption were in Malawi and Benin, according to Transparency International:
- In 2013, Malawi’s reformed public financial management system was misused to divert US$5 million in public funds to the private accounts of officials.
- In 2015, an audit of the €70 million phase II national water program in Benin, which included €50 million from the Netherlands, revealed that €4 million had vanished. Dutch development cooperation with the Benin government was suspended thereafter to safeguard additional funds.
The report said its aim is to highlight “how institutional fragmentation and corruption undermine resources and services. It demonstrates how integrity and good governance have become international and national priorities and outlines tools and techniques that make improvements achievable. It makes recommendations for action by governments, sector actors, the private sector and civil society bodies.”
The report pointed to money lost to corruption as one of the impediments to universal water and sanitation service. For instance, more than 2.5 billion people worldwide, one third of the total population, living without access to proper toilets, the United Nations News Center has reported.
To read more about management of money in the water sector visit Water Online’s Funding Solutions Center.