irrigation in 2009 show that non-revenue water in urban areas varies between 55% in dar es salaam and 25% in tanga. it is estimated that non-revenue water is higher in small and district towns. labour productivity. on average, there were 10 staff members per 1000 water connections in the large water utilities as of 2007. the lowest number in tanzanian uwssas is 6 employees per 1000 connections, obtained in tanga, mbeya and arusha. this is close to the average for sub-saharan africa which is 5 employees. financial aspects tariffs and cost recovery the national water policy nawapo identifies utilities as commercial entities that provide an economic and social good. it thus promotes operational and maintenance (o&m) cost recovery as basis for sustainable services. rural water and sanitation authorities are expected to meet full o&m costs and 5% of capital costs. urban water and sanitation authorities are divided in three categories according to their performance in cost recovery: category a: authorities that cover all o&m costs, including staff wages, energy costs and some contributions to investment; category b: authorities that meet o&m costs, share energy costs with the government and are able to pay full salaries to permanent employees; category c: authorities that require government support to meet their energy costs and to pay out salaries to permanent employees. lindi is one of two cities in tanzania where the water utility does not collect enough revenue to meet energy costs and to pay salaries, despite having the highest water tariffs in the country. this system was designed to act as an incentive for utilities to improve their performance. according to mowi, 14 out of the 20 regional uwssas fall into category a, 4 are classified as b while utilities in babati and lindi are in category c. the results of a study by tobias a. swai of the university of dar es salaam, however, indicated that category a uwssas are the least efficient although they are self-sustaining. ewura data also point out that two out of the twenty regional utilities have an operating cost coverage ratio significantly higher than one, which means that they can sustain the current service level. seven other utilities only just manage to keep their current operations running. tariff levels are set at the local level, but need to be approved by the national-level regulatory agency ewura. in urban areas, uwssas determine tariffs according to their funding requirements and the category in which they operate. in water supply schemes run by local government authorities, tariff levels are determined by the respective district council, but without specific targets of cost coverage. tariffs are generally low and have not been revised in the last years. in dar es salaam the average water tariff in 2008 was 599/= or us$0.46 per m3. lindi had the highest average water tariff: 833/= or us$0.64 per m3. the average urban water tariff was 437/40, equivalent to us$0.34 per m3. uwssas carry out water metering. in arusha, dodoma, moshi, mwanza and tanga 100% of household connections are reported as metered. the figures are above 50% in eleven other cities, with lindi performing worst with 26% of metered connections. as of 2008 there were in total over 331,000 metered household connections in the territory served by regional utilities (the figure almost doubled compared to 2007 - about 169,000 metered connections). the maintenance of water meters and the associated costs have been identified by mowi as one of the pressing problems for urban water suppliers. concerning affordability, an analysis of the 2007 household budget survey shows that the wealthiest quintile of tanzanians spends more than tsh 4,000/= (us$3.10) per month for water, corresponding to about 1 per cent of their income. those in the poorest quintile spend only about 1,000/= (us$0.77) per month for water, but this represents 4.5 per cent of their income. one of the reasons why the poor spend less in absolute terms on water is that they fetch water for free from wells and streams. the data are not differentiated between rural and urban areas, although it is likely that the urban poor who have no access to free water sources pay much more for water than those in rural areas. investment and financing investment. according to the ministry of water and irrigation, the total budget for the water and sanitation sector in fiscal year 2008-2009 was tsh 286.5 billion, equivalent to us$220 million. of these, us$175 million were actually spent. the budget approved for fiscal year 2009-2010 is tsh 309.6 billion, or us$238 million. 40.1% has been allocated to rural water and sanitation and 43.9% to urban water and sewerage. water resources management and institutional development and capacity building have been allocated 8.5% and 7.4% of the budget respectively. the un water country brief for tanzania, however, shows an estimate for average annual drinking water and sanitation expenditures in the period 2002–2011. according to that report, government investment expenditures were only us$30 million per year plus official development aid disbursements of us$82 million per year, about seven times less than the government figures for fiscal year 2008–09. expenditures fluctuated substantially from year to year, with a peak in 2008–09. the public expenditure report of the water sector provides a detailed analysis of the patterns of budget spending. it appears that in the water sector large part of the budget is made up of development expenditures and only 15% are recurrent expenditures (compared to the 55% share of development expenditures in the total government budget). moreover, as a result of the decentralization policy of the government, the budget allocated to local government authorities and regions has increased rapidly. in fiscal year 2008-2009 lgas had a share in the total water sector budget of about 25%, while the figure was 20% for regions. conversely, an increasing part of central government budget is devoted to feasibility studies: this reflects the co-ordinating and policy setting role to which mowi is shifting. financing. tanzania is one of the largest recipient countries of foreign aid in sub-saharan africa. this includes assistance in the form of grants, concessional loans and debt relief. aid management in tanzania is guided by the joint assistance strategy (jast) approved in 2006 and aimed at implementing the principles of the paris declaration on aid effectiveness. jast advocates the integration of all development funds into the government budget, fosters national ownership and promotes a "division of labour" between donors. the public expenditure report however suggests that not all spending in the water sector is included in the government budget. a comparison between oecd and ministry of finance data on bilateral aid shows that there is a gap between the two sources. this indicates that there has been off-budget financing of about 26% of total bilateral aid in the past five years. according to data published by mowi, of the funds budgeted for the water and sanitation sector for fiscal year 2009–2010, about 88% will be provided from foreign transfers. external cooperation tanzania receives external support from several donor agencies. they are organised in the development partners group (dpg) which aims to improve donor harmonisation and aid effectiveness. sector dialogue between dpg and the ministries responsible for water is carried out through four thematic working groups that cover water, sanitation and hygiene issues. the five major donors in the tanzanian water and sanitation sector are: the african development bank, the european commission, germany, the netherlands and the world bank. within the scope of jast, the government of tanzania the world bank, germany, and the dutch government contribute to the wsdp basket fund which is a form of a sector-wide approach (swap). other donors include: french afd, japanese jica, belgium, switzerland, uk (dfid), usa (usaid and mcc). african development bank the african development bank (afdb) is present in the tanzanian water and sanitation sector with three projects. dar es salaam water supply & sanitation, initiated in 2001, focuses on improving the accessibility, quality and reliability of water supply and sanitation in dar es salaam. the monduli district water supply project was approved in 2003 with the aim of securing adequate and sustainable access to safe drinking water to the population of eighteen villages in monduli district. afdb provided a grant of about us$10 million that covered 90% of the project costs. since 2006, the afdb together with other donors is contributing to the rural water supply and sanitation program. the program aims at improving rural communities' access to water and sanitation services and improving institutional capacity - both at district and government level - to carry out demand based rural water and sanitation projects. european commission the european commission provides support to the tanzanian water and sanitation sector through the resources of the european development fund national indicative programme (nip) and the eu water initiative. at the end of 2008, thirteen projects co-funded by the water initiative were under implementation, for a total of €20.08 million. eu cooperation in the water and sanitation sector focuses on poor populations in urban and peri-urban areas. between 2003 and 2007, the eu committed round €33 million to the water supply programme to regional centres, jointly financed by german financial cooperation. the main objective of the programme was to improve the access to sustainable quality water supply and wastewater management services in the three regional centres of mwanza, iringa and mbeya. further funds of about €6.6 million were provided for the mwanza sewerage rehabilitation project between 2000 and 2004, whose aim was to prevent the overflow of raw sewage from mwanza to lake victoria. rural water and sanitation is supported through the eu general budget line for co-financing ngos in developing countries. germany mbeya is a town where german development cooperation supports improved access to water supply and sanitation. since the 1970s, germany has been cooperating with the government of tanzania in its attempts to improve the water supply and sanitation situation in the country. german development cooperation is carried out mainly by kfw and giz. between 2007 and 2009, kfw provided eur17.25 million for the water basket. in addition, kfw is active in several national and regional projects in tanzania. for example, in 2003 kfw provided 21 million euros for the project supporting regional center's water supply and sewerage in the rapidly growing towns of mbeya and mwanza. a feasibility study and investment plan were also prepared for iringa, where implementation begun in 2006. the objective of the project was to improve the water supply, sanitation and sewerage services by strengthening the capacity of autonomous urban water supply authorities. to achieve this, water supply facilities have been extended and rehabilitated, sanitation facilitates have been upgraded and capacity building measures have been carried out, including improvement of it systems used for billing. giz develops local capacities in the sector, including in the ministry, ewura and in commercial service providers, such as those in tanga and in kilimanjaro region. india in 2012 the indian government provided a us$178 million loan for the implementation of water projects to alleviate water scarcity in dar es salaam "by 2014". the loan will finance an increase in the capacity of the upper ruvu plant to 196,000 cubic meters from the current 82,000 cubic meters a day and to construct a new transmission line from the plant to the city. as of 2012, some parts of the city received water twice a week while others did not get any. the netherlands the government of the netherlands provided funding for the wsdp water basket (through a mandate to kfw). in addition, the netherlands development organisation (snv) provides support in three main areas of the water and sanitation sector: (a) improving the functionality of existing water points through water point mapping (carried out in cooperation with wateraid), (b) support to water, sanitation and hygiene activities in schools, and (c) capacity building in iwrm. united states the us provides a us$66.3 million grant to finance the expansion of the lower ruvu plant that supplies dar es salaam with water from 180,000 to 270,000 cubic meter per day, as well as to reduce non-revenue water and to rehabilitate two treatment plants in morogoro next to dar es salaam. additionally, usaid/tanzania funded a 3-year $15 million tanzania integrated water supply, sanitation and hygiene (iwash) program which included complementary support from the water and development alliance (wada) partnership between usaid