The Impact of Foreign Aid Allocation on Access to Social Services in sub-Saharan Africa: The Case of Water and Sanitation

The Sustainable Development target of ensuring access to water and sanitation for all by 2030 has far-reaching implications for the achievement of the other SDGs. However, achieving this target remains a major challenge for sub-Saharan Africa, and the ability of governments in the region to expand access is constrained by limited financial resources. This paper investigates whether targeting foreign aid to the water and sanitation sector can help achieve the goal of expanding access to water and sanitation services in sub-Saharan Africa. The analysis is based on panel data estimation techniques controlling for country-specific effects and potential endogeneity of regressors. The econometric results suggest that increased aid targeted to the supply of water and sanitation is associated with increased access to these services, although the relationship is non-linear. The evidence in this study makes an important contribution to the scholarly debate on aid effectiveness. It also has important practical implications for aid policy: specifically, it suggests that in addition to scaling up aid disbursements to sub-Saharan African countries, donors need to increase aid allocation to water and sanitation as well as other areas where the region lags behind. There is also a need to identify structural constraints that may limit access to water and sanitation, and utilize foreign aid so as to alleviate these constraints.