The U.S. Government's water programming is also guided by its overall Foreign Assistance Framework. Over the past year, the U.S. foreign assistance process has been reformed to:

This process does not highlight specific sectors, but rather works to prioritize resources to those areas that the U.S. believes will promote and sustain long-term country progress. The new foreign assistance framework is organized to support five objectives: Peace and Security, Governing Justly and Democratically, Investing in People, Economic Growth, and Humanitarian Assistance. Each of these objectives is divided into several thematic areas through which the objective is to be achieved, and in turn, each area is composed of several "elements," or types of activities that will be implemented in pursuit of the thematic area.

Most water and sanitation activities fall under the "Investing in People" and "Economic Growth" objectives. Within the "Investing in People" objective, the area of health contains activities to increase access to safe water and basic sanitation and to improve hygiene and safe water handling at the household level. Specific activities include:

Within the "Economic Growth" objective, the area of environment includes the following activities:

In addition, meeting basic water and sanitation needs as well as water needs for food security is fundamental in disaster or conflict situations to the "Humanitarian Assistance" objective. Activities that use water as a means of building trust and promoting cooperation among countries are included under the "Peace and Security" objective. Finally, water activities such as the formation of user groups and mechanisms that strengthen public participation in decision-making support the "Governing Justly and Democratically" objective.

USAID's total FY 2006 funding for water activities in Africa was $91.6 million, of which $82.3 million was for water supply and sanitation activities. Of the water supply and sanitation funding, $59.7 million was from the International Disaster and Famine Assistance (IDFA) account. Details of USAID funding levels for different water activities in sub-Saharan Africa over the last five years are provided in the following table.

Table 1: Estimated FY 2002-2006 USAID Water Obligations in Africa (in $ millions)

As shown, USAID's water program in Africa has focused and continues to focus primarily upon increase access to, and the effective use of, safe water and sanitation to improve human health - although important programs are being implemented in water resources management and productivity improvement. In addition, funding invested by USAID in FY 2006 in sub-Saharan Africa for "drinking water supply projects and related activities" was the most of any USAID region, amounting to 41% of the Agency's total worldwide obligations in this sector.

More detail about the distribution of these activities by type and country in FY 2006 is provided in the attached Table 2, "Estimated Actual FY 2006 USAID Obligations for "Water Supply Projects and Related Activities" by Country and Region." As shown in that table, approximately $60 million of the regional total came from the International Disaster and Famine Assistance (IDFA) account. These IDFA-funded disaster response activities were obligated in response to humanitarian crises in 13 countries, with the majority of those funds utilized in Sudan. The non-IDFA-funded activities were implemented in 26 countries, through 10 regional and 2 bilateral programs. Their primary emphasis was on the provision of mostly rural water supply and sanitation infrastructure - boreholes and pumps - as well as hygiene education.

One particular strength of USAID's water programs in FY 2006 was its leveraging of significant private charitable funding. USAID invested in regional partnerships with the Hilton Foundation (West Africa Water Initiative), the Coca Cola Company (Community Watershed Partnerships Program), and the Case Foundation, together with the Office of the Global AIDS Coordinator (the PlayPumps Alliance). All of these partnerships brought at least 1:1 matching resources, in addition to ingenuity and other assets. I'd like to elaborate on the last and newest of these three alliances, by way of illustrating the tremendous promise that such partnerships hold.

The PlayPumps Global Development Alliance is a $60 million public-private partnership between USAID, the Case Foundation, the Office of the Global AIDS Coordinator, the South African company, PlayPumps International, and other public and private, local and international partners to provide clean water in 10 sub-Saharan countries by installing 4,000 PlayPumps in schools and other community locations by 2010. The PlayPump water system includes innovative pumping technology - a merry-go-round that pumps water as children play, and a water tower with billboards for public service announcements and private advertising space. Innovative cost recovery and sustainability is achieved by selling advertising space on the PlayPump water tower, allowing PlayPumps International to offer a 10-year operational guarantee on each PlayPump water system. Additionally, the system promotes improved sanitation and hygiene behaviors and a reduction in the spread of HIV/AIDS through public awareness campaigns; provides valued play equipment; and spurs economic progress through the development of manufacturing, distribution, and parts supply and maintenance services associated with the pump technology.

More details about USAID's FY 2006 water activities in Africa and other regions will be provided shortly in the Agency's annual report to Congress, "USAID Investments in Drinking Water Supply Projects and Related Water Resources Activities, FY 2006." This report is scheduled for submission before the end of May.

USAID's FY 2007 water program demonstrates the Agency's continued high prioritization of water supply and sanitation activities, with approximately $30 million in non-IDFA-funded water supply and sanitation activities planned -- almost $8 million more than in FY 2006. This program will continue its investments in regional partnerships, and will maintain a heavy emphasis upon the provision of community water supply and sanitation infrastructure and hygiene education.

Three promising areas of increased focus of USAID's FY 2007 water activities include: 1) programs that will improve water utility governance and regulation at local, national and regional levels; 2) programs that will mobilize private domestic financing to bankable water supply projects; and 3) programs that improve household practices and the household dimensions of water quality, personal hygiene, and sanitation.

Utility governance and reform efforts will build on experiences developed through USAID activities in Asia and the Near East. USAID's focus in sub-Saharan Africa is on developing pilot projects that demonstrate solutions to key water and sanitation issues, and on spearheading a regional learning network to share lessons learned among the leaders of water utilities. While there have been fewer opportunities to work on sanitation services to date, USAID seeks to expand the role of utilities in providing sanitation services to cities and towns.

In many developing and transforming countries, domestic capital is available to invest in public goods such as water and sanitation; the challenge is finding good "bankable" projects and connecting these with sources of financing. There are a range of innovative financing tools developed in the United States, Europe and elsewhere which can reduce risks and create incentives for the investment of local capital into the water and sanitation sectors. These activities not only increase cash flows for infrastructure, they also help strengthen and build local capital markets. One such proposed pilot project is in Uganda, building on the success of Uganda's National Water and Sewerage Corporation (NWSC). The NWSC has been contracting for municipal services for over six years. The Ugandan government has now requested USAID's help in developing a water revolving fund to help both private contractors and potentially small municipalities make capital investments to improve and expand water services.

Recognizing that it is important to address the near- to medium-term direct health consequences of inadequate service, USAID's health programs have been working to expand the emphasis on household hygiene measures to ensure the safety of drinking water, promote handwashing, and increase the use of effective sanitation within the context of maternal and child health as well as care and support activities for people living with HIV/AIDS. For household water safety, USAID has worked to expand programs for point-of-use (POU) water disinfection, most often chlorination, in collaboration with public and private sector partners, such as Procter & Gamble and the social marketing firm PSI. USAID has long supported such efforts in Zambia and Madagascar, with more recent initiation of work in Nigeria and Mozambique. Over the past year, these efforts have expanded to also include Ethiopia, Kenya, Malawi, Burundi and Rwanda, and we soon anticipate beginning support of POU programs in the Democratic Republic of the Congo and Benin. USAID also provided support for a POU response to the cholera outbreak in Angola last year. Successful household water disinfection programs typically reduce diarrheal disease rates by 30-50%, definitely a quick win from the health perspective.

Coordination within the U.S. Government

Under the current U.S. Foreign Assistance Framework, USAID and the State Department collaborate closely in the planning and implementation of all foreign assistance activities in Africa and worldwide, including water programs. Programming decisions are made on a country-by-country basis, with both USAID and State Department funding sources programmed together. Washington-based staff at the State Department and USAID, as well as the USAID missions and U.S. Embassies in the field, represent views from multiple programs and technical sectors, with each organizational part playing its appropriate role in making programming decisions that best meet overall U.S. foreign policy objectives.

In addition, the Senator Paul Simon Water for the Poor Act has created the opportunity for still closer collaboration between USAID and the Department of State on water programming, under the umbrella of a common U.S. water strategy. The development of this strategy was a process coordinated by the State Department, but conducted in close collaboration with USAID, and with the support of other federal agencies involved in the international water sector.

Linking access to water with water management

As stated in the Senator Paul Simon Water for the Poor Report to Congress, June 2006, USAID strongly supports internationally endorsed principles of sound and sustainable water resources management as well as water supply, sanitation, and hygiene programming for human health outcomes. Improving water resources management includes optimizing the benefits of water among competing uses while ensuring human needs are met and environmental resources are protected. It also includes minimizing the use of and increasing the productivity of water used in industrial, agricultural and consumptive sectors, as well as supporting pollution prevention programs that reduce water losses in domestic water systems.

Clearly, effective water resources management increases the likelihood of long-term success from interventions in the water sector, and the water resources management environment is therefore one element evaluated in prioritizing the funding of activities to promote increase access to clean water. All other factors being equal, including need, a country with a better water resources management policy framework would in theory be a higher priority for funding.

Prioritization of clean water and sanitation programming

As noted above, USAID has steadily increased funding for water activities in Africa over the last five years. Within a constrained budget, however, expenditures for water activities must be balanced with critical needs in other sectors.

The new Foreign Assistance Framework has focused U.S. foreign assistance planning on a single goal: to help build and sustain democratic, well-governed states that respond to the needs of their people. Access to clean water and sanitation is a critical need of all people, and one which, over the long term, must be met by well-governed states. The programming of water activities within the Foreign Assistance Framework relates, therefore, to the extent to which such activities can contribute to achieving U.S. goals and objectives in any given country compared to other interventions.

Luckily, the United States is not the only donor focusing on Africa and water issues. The African Development Bank, UN Agencies and other bilateral donors have been focusing greater priority on African development needs over the past several years, and water and sanitation has been an area of particular focus. For example, in 2005, the United Kingdom pledged to increase development assistance to Africa by $3.870 billion annually by 2010, from $3.260 billion in 2004 to $7.130 billion. In the area of water supply and sanitation, the United Kingdom will double its support for improved access to water and sanitation in Africa to £95 million (US$174 million) over the next three years.

The water problem in Africa is a difficult one, with no easy answers. As one looks deeper into the water problem, it becomes clear that the challenge is much more than drilling boreholes. I want to highlight a few some of the critical elements that must be in place for the water challenges in Africa to be surmounted:

Commitment. African governments often don't make water a priority; meeting the basic water and sanitation needs of people must become a high priority in national development and poverty reduction plans; without national leadership, these issues cannot be addressed effectively.

Good governance. Good governance is the key to ensuring basic human needs are met; the proper legal and regulatory frameworks, along with reduced corruption, are critical for creating a healthy investment climate and promoting economic growth.

Money. Some experts predict that the developing world will need anywhere from $80 to $170 billion annually to meet its water needs. The total Official Development Assistance (ODA) is less than $100 billion. Even if all the official development assistance from all the developed countries went only to water - that means none for health, none for energy, none for agriculture - it wouldn't be enough.

Ensuring sustainable water supply cannot be achieved through ODA but must be achieved through cost recovery and sustained investment from both the public and private sectors - this takes us back to sound water management, good leadership and good governance.

Cooperation. Governments must work together to manage shared water resources. We need to work to strengthen regional institutions, improve their capacity to manage water resources, facilitate joint planning and resolve disputes.

Integrated Water Resources Management (IWRM). We need to work towards integrated water resources management (IWRM), in which local communities, civil societies, national governments and all stakeholders participate fully in water management and in water allocation decisions among competing sectors (domestic water users, industry, agriculture, ecosystems and others) to ensure equity in water use and sustainability of water resources for the benefit of all.

These elements of a long-term solution to water issues in Africa are hard to come by, but there are signs of progress, and hope for the future. For example, strong political commitment in South Africa and Uganda at the national level has led to increased access to water supply and sanitation, and USAID has been a partner in helping the government in both countries develop sustainable water service provision.

This is critical: host country governments in Africa must make water a higher priority. When USAID and the State Department meet with African government representatives to receive their input into our planning, water is not often near the top of their priority list. It is up to the host country partners to establish the enabling conditions for the water activities that we support to be successful, and to create the policy conditions for water service provision to be sustained in the long run and to assure that water resources are well managed.

That said, we at USAID are committed to a sustained effort, in partnership with host governments and communities, the private sector, other donors, and intergovernmental organizations, to promote increased access by Africans to water supply, sanitation and hygiene, to improved water resources management, and to strengthening cooperation between African nations on shared waters.

Thank you for this opportunity to testify before this subcommittee on behalf of USAID. I would be pleased to answer any questions you may have.

Table 2: Estimated Actual FY 2006 USAID Obligations for "Water Supply Projects

and Related Activities" by Country and Region

(Dollars Millions)