Water for Resilience Programme (W4R), Somalia

Situation

'The Swiss agency for Development and Cooperation (SDC) is legally compelled to use the funds and assets allocated in an orderly, effective, cost-efficient, and economical manner, compliant with the respective project objectives” (Financial Budget Act). Hence, the SDC needs to demonstrate project results, including benefits to primary stakeholders; cost awareness and value-for-money considerations are important elements in assessing whether the investment in an intervention will be, is, or was justified. EFA of projects intends to assess whether: (i) it is worth investing, and (ii) the investments are directed towards relevant and socially acceptable interventions. In this context, SDC has introduced Economic and Financial Analysis (EFA) as a mandatory step to assess the costs and benefits of all projects worth CHF 6 million or more. EFA is part of SDC’s overall results-based management system and is used to assess a project’s efficiency in contributing to national economic and social welfare, a process known as economic analysis. Examine the financial return for different project stakeholders (e.g., the target population, the project entity, public and private institutions, and governments) to identify financial incentives or impending factors for participants, a process known as financiais analysis.