Could a new ‘Sanitation Development Fee’ improve sanitation for low-income urban Kenyans?

Themes: Public finance Research Sanitation Urban Sanitation Research Initiative Utilities
Countries: Kenya

Kenya’s National Water Master Plan envisions 80% national sewerage coverage by 2030 – ambitious, as only 35% of urban Kenyans currently have access to basic sanitation. Motivated and influential stakeholders like the Water Services Regulatory Board (WASREB), the body in charge of overseeing national water and sewerage policies and strategies, have a financial mountain to climb – the projected cost of achieving these goals is $5 billion, but the Kenyan government has so far only allocated 6% of the required funding.

With this in mind, WASREB recently convened a two day-long workshop in Naivasha alongside its partners from the Urban Sanitation Research Initiative Kenya (WASREB, the Ministry of Health and WSUP). In attendance were around 40 representatives from national ministries, County Governments and water utilities. The workshop was specifically convened to discuss a potential ‘sanitation surcharge’, or ‘Sanitation Development Fee’.

This sanitation surcharge would be a small additional payment included in utility customers’ water bills, which would raise money for utilities to improve sanitation in lower-income areas of Kenyan cities. So customers connected to water and sewerage networks would pay for the services they receive, and a bit extra – the proposed Sanitation Development Fee.

This is something that WASREB and others have been interested in developing for a while – but they needed more evidence on whether customers would be happy to pay this surcharge and if they would contribute enough to make its introduction worthwhile. So, the Urban Sanitation Research Initiative Kenya commissioned researchers to investigate further.

A street in Karagita, Naivasha

Their research is now complete, and its findings are very encouraging for WASREB and its partners in the Urban Sanitation Research Initiative Kenya. Qualitative and quantitative data collected from the customers of two utilities (NAWASSCO in Nakuru and RUJWASCO, the utility covering the towns of Ruiru and Juja) demonstrated that the median amount that customers were willing to pay per month was 100 KSh (around US$ 1) – so half of the respondents were willing to pay even more than that. You can read more about those findings in our new Policy Brief and a previous blog – and keep an eye out for the researchers’ full report, which will be published soon.

WASREB are now taking this research onto the next stage and working on translating these findings into a workable financial model. This workshop was a first step towards this, where WASREB could share findings with their peers in counties and utilities, explore interest among stakeholders for this kind of financial model, and think about what such a surcharge could look like in practice.

A lot of detail still needs to be sorted out (who would pay this charge, who would benefit, how it would be managed and what it would be called – ‘Sanitation Development Fee’ is the current frontrunner), but all the participants at the workshop agreed on the potential of such a surcharge and that it should be piloted in at least one location. For more detail, read WASREB’s report from the workshop.

The next steps will be for WASREB to share the report with the key decision-makers, and for county sanitation specialists to raise this idea with their leadership. The goal is to pilot a surcharge in at least one utility. There’s a way to go until then, but there is strong momentum behind the initiative so far!