1. Feb26-28/ 2015
Dire Dawa
Assessment on Financing Mechanisms
and Cost Recovery Systems of SWM in
Ethiopia
1

2. 1.Introduction
2.Objectives
3.Conceptual Frame work
4.Results and Discussions
5.Conclusions and Recommendations
2

3.  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.
3

4. 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
Ababa
The MUDHco reports and related literatures and other
pertinent information are also used in the assessment.
4

5. 2.1. General objective
The 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.
5

6. 6
ISWM
Institutional
Aspect
Social AspectTechnical
Aspect
Finance &
Economic
Aspect
Finance &
Economic
Aspect
Political
Aspect

7. Finance and Economic Aspect
Budget and cost accounting
Resource mobilization
Financing operating expenses
Cost reduction &control
Employment& Income generation
Institutional Aspects
Decentralization and distribution of
power
Institutional& sectoral integration
Planning& management
Pvt sector involvement and
User participation
Social Aspects
Waste generation & disposal pattern
User Participation
Social conditions of worker
Political Aspects
Goals and priorities
Roles and jurisdictions
 legal &regulatory frameworks
Technical Aspect
Technical design &planning
Resource recovery
Hazardous and special waste treatment
7

8. 1. Financial challenges
The findings reveal that from 20 sampled towns/cities
19 municipalities claim to be underfunded –
significantly
Only Mekelle has sufficient funds and the largest
budget of ETB 6.3 Million
Hawassa and Bahir Dar face 33.3 % and % 57%
respectively
Addis Ababa also faces around 68% deficit
8

9.  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.
9

10. 2. Institutional Arrangements
Differ from cities to cities, and from regions to regions
It reduces the accountability and transparency of the
municipalities
The Ethiopian SWM Standard recommends that
creating enabling institutional arrangement promotes cost
recovery system.
10

11. 3. Capacity challenges
 Professionals lack the necessary skills to use modern
technologies and innovations
Many officers in charge of solid waste management,
particularly at the local level, have little or no technical
background or training in engineering or management
System for capacity building trainings is not established to
capacitate professionals
Lack of raising awareness of the publics to convince them
to be part of solution the existing financial deficits.
11

12. Results and Discussions( Cont`d)
4. Legal related challenges
 Proclamations, standards are not translated in to
actions
Proclamations 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.
12

13. 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.  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.
14

15.  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
15

16.  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.
16

17. Thank You
17