The Absorption Capacity of Official Development Assistance: A Key Driver for Improving Access to Water and Sanitation in Africa

Abstract

This article sheds light on the issue of financing the African water sector by trying to answer the following question: How does the absorption capacity of ODA affect the improvement of access to water and sanitation in Africa?. We adopted a quantitative methodological approach consisting of a correlation analysis to estimate the ODA absorption rate and the correlation between disbursments and coverage rate. The article recalls the theoretical basis of ODA through a literature review on the theoretical importance of ODA to an economy in need of financing with an emphasis on the big-push theory. Then, it presents an overview of the WASH sector financing structure highlighting the very important financial needs to achieve the SDG 6 objectives in Africa. We carried out a correlation analysis between the variables: coverage rate and disbursements of ODA to the African WASH sector. The period considered runs from 2002 to 2015. The results of this correlation analysis show a strong dependence between the two aforementioned variables with a very significant statistical validity. This leads us to conclude that the absorption capacity of ODA measured by disbursements is a key driver for improving access to water and sanitation in Africa. The limited capacity of African countries would indicate inadequacies relating to both the aid transfer mechanisms and as well as the terms of implementation and management of this aid. This study sets the milestones for the continuation of other more in-depth research on the capacity absorption of ODA dedicated to African WASH sector.