How much funding is the WASH Sector forecast to receive in 2022?
Funding to the Water, Sanitation and Hygiene (WASH) sector is forecast to be between $488m and $928m in 2021. Our central estimate is $782m. For reference, the WASH sector received $653m in total last year.
This forecast is based on our 95% probability range. In other words, we are 95% sure that funding will be between $488m and $928m. Below are the other forecast ranges for the WASH sector. As we become less sure about our forecast, the range narrows. So for example, we think there’s a 50% probability that funding will be between $690m and $860m.
But we need to put this into context. What does the forecast mean in terms of reaching the funding that is required for the sector (also known as the funding requirement)? The total funding requirement globally is determined by how much is needed in each context. Given that we don’t have the information yet we have projected the funding required for 2022 and compared that to the funding forecast. If you hover over the donut below you’ll be able to see the chances of reaching 25%, 50%, 75%, and 100% of the funding that is required.
We think that there’s a realistic possibility that the WASH sector will receive 25% of funding required, with a remote chance of reaching 50% of what is required. Bear in mind that the sector only reached 22% of what was required in 2021.
How does the 2022 forecast compare to previous years?
The funding needed for the WASH sector has nearly trebled in the past six years, from $1.2bn in 2016, to $3bn in 2021. This is equivalent to a year-on-year increase in the funding required of 19%. The 2021 funding requirement was $3bn, and it is anticipated that there will be another increase in the funding required in 2022.
Yet, at the same time that the WASH sector was asking for more in 2021, funding to the WASH sector is actually below 2018 and 2019 levels – down from a high of $699m in 2019 to $646m
Despite the poor performance of the last couple of years, funding hasn’t declined substantially when we compare it to 2016 and 2017 levels. Indeed, if we take 2016 and 2021, funding increased across the period at a rate of 6% per year (compound annual growth rate, or CAGR).
Nevertheless, a 6% growth rate across the period doesn’t compensate for a growing funding requirement. The funding gap increased to 78% in 2021, up from 60% only two years previously. This is the worst funding gap in the whole 2016-21 period. This funding gap has real world implications, and means many affected populations will not be receiving the WASH services they need.
With the funding gap increasing year-on-year, that means WASH is already in a real humanitarian recession. In this story, we’ve defined a real humanitarian recession as two consecutive years of a growing funding gap. WASH has already experienced three years of a growing funding gap. So what are the odds of the sector staying in recession?
We think that it is likely that the WASH sector will growth in 2022. This means it is likely that the funding gap will close this year. However, the chance of a ‘real recession’ (a growing funding gap) shouldn’t be discounted.
How does the 2022 forecast compare to other sectors?
The WASH sector is forecast to rank 6th out of all humanitarian sectors. This places WASH firmly in the ‘top-half’ of sectors which tend to have $400m+ in funding received and $1bn+ funding requirements.
The current state of things
Funding to the WASH sector in 2021 reached $653m. This is in a similar region to the three previous years (between $600m and $700m), suggesting that the WASH sector has settled at an equilibrium.
It could be that the WASH sector in 2022 falls into a similar pattern as previous years. By the end of June 2022, the sector had received a record $272m. But this magnitude of funding isn’t without precedent. By the end of June in 2018, the sector had received $250m. The sector appears to be tracking previous years – albeit at the upper bound of the range, and we’ll have to wait and see whether the pattern continues throughout the year.
Features of the WASH sector in 2021
Despite the success of the WASH response in Lebanon Emergency Response Plan and the oPt Flash Appeal, other contexts weren’t so successful in raising funding for WASH. In fact, only five other responses received more than 50% of their funding ask. These were Mozambique (67%), the Madagascar Flash Appeal (66%), the Kenya Flash Appeal (64%), Guatemala (54%), and Afghanistan (52%).
The average WASH sector response was only 24% funded in 2021, and this means that the average WASH response didn’t get around 3 out of every 4 dollars that it asked for in 2020. Having said that, the median across all sectors is 24%, which shows that this is not just an issue for WASH, but also more broadly.
We’ll try to measure just how unequal the sector is in the future with the creation of an ‘Inequity Index’, and to benchmark against other sectors as well. We’ll also try to explain the causes of the inequity. Could it be due to the size of the funding requirement, donor preferences, under reporting, how recent the emergency is, or other factors?
The WASH sector is quite diverse in terms of its funding sources. The US Government is the largest source of funding, contributing 22% of all funding, followed by the Central Emergency Response Fund (CERF) (10%), UNICEF (9%), ECHO (7%), the Governments of Germany (6%) Japan, (4%), and Sweden (4%). These seven donors contribute 61% of all funding to the WASH sector. However, there are also many other donors contributing to WASH funding – 87 in total in 2021.
We can measure the diversity of a sector using the Herfindahl Hirschman Index. On a scale of 0 to 10,000, a sector is unconcentrated and competitive with a score under 1,500. The WASH Sector had a HHI score of 848 in 2021, meaning that the sector was diverse.
In terms of the organisations receiving funding, UNICEF receives 44% of all WASH funding. This is perhaps unsurprising as UNICEF are the cluster lead agency for WASH. However, there were also 153 other organisations that also received WASH funding, including 48 other organisations receiving over $1m. Most of these organisations are international (either UN agencies or INGOs), including: IOM, Solidarités, OXFAM, NRC, Mercy Corps, ACF, ACTED, UNHCR, and World Vision, who all received over $10m in 2021 for WASH.
Last year’s forecast can’t yet be judged against what the reality was as the 2021 numbers aren’t ‘final’ yet, despite it being 2022 already. It varies year-to-year, but there is still a non-trivial amount of funding that is logged after the end of the year. Therefore, we can’t really judge last year’s forecast until some point later in 2022. It’s at this point that we’ll do a post-mortem on our 2021 forecasts and see how well we did.
The usual health warning: FTS doesn’t capture everything. It is a platform that relies on voluntary reporting by organisations. But it is the most comprehensive source of data for humanitarian funding.
To find out methodology and sources for other things on this page which aren’t the forecast, click here.