We must apply the lessons we have learnt to galvanise the sanitation economy

Themes: Container-based sanitation Faecal sludge management Finance Market development Public finance Public/shared toilets Regulation Sanitation Sewerage Urban Sanitation Research Initiative Utilities WASH
Countries: Global

By Kariuki Mugo, Director of WASH Sector Support

The WASH sector (water, sanitation and hygiene) is slow-acting and slow-learning. This fact became clear to me back in February while attending the International Faecal Sludge Management Conference in Abidjan, Ivory Coast. In particular, our workshop,“Bridging the Funding Gap for Sanitation Services in Informal Settlements”, helped me pick up lessons I should have learnt several years ago.

In the room were several container-based sanitation entrepreneurs, urban government officials, development financiers and regulators from across the world. It was a cross-sectional representation of the people I work with daily, yet I heard them speak about sanitation financing in a way I had never heard before.

I spent much of the conference discussing public, private and development financing of non-sewered sanitation. I spoke with brilliant and experienced people who revealed intricate complexities, unspoken sector politics, glaring market gaps, and limited knowledge of how sanitation financing needs to evolve. It became apparent that there are many things people like me and others in the sector need to learn. It feels like the WASH sector is still lost deep in the woods, not yet marshalling the required public, private, household and grant financing to meet international obligations in ensuring universal access to safe sanitation.

What follows is a summary of what I learnt in Abidjan.

Internal high-level government advocacy is essential to increase financing

Over the last few years, the WASH sector has made considerable efforts to advocate for governments to increase funding for sanitation. Several global and regional mechanisms have been designed to track, and publicise, government budgetary allocations. Equally, efforts to mobilise government ministers and other senior officials to increase public resources for improving basic access to sanitation have been on the rise.

However, there has been no support for sanitation bureaucrats to help them raise their voices within government systems. National and sub-national bureaucrats require high-level political approval to alter traditional budget structures and processes. They must negotiate with members of parliaments and local government assemblies to change the budgeting tradition. On the other hand, water and finance ministers need the support of presidents to make sanitation a high-level political agenda. Simply put, the buck to rapidly increase public sanitation investments stops with developing nations’ presidents. And regional mechanisms and political platforms, like Africasan, have a role to play to draw attention to presidential commitments towards increasing public financing for basic sanitation services.

Read also: report shows challenges in sanitation funding

The Clean Team toilet service in Kumasi, Ghana, has been a positive alternative for low-income communities without sewered sanitation

Unlocking massive capital requires a new leap-frogging mobilization strategy

There is now a clear understanding in the WASH sector of the critical role the private sector should play in sanitation financing and service provision. The case for market-based sanitation services, with clarity on the structure and value of the sanitation economy, is well understood. In addition, successful and replicable business and service models have been developed by social businesses, and these have generated enough data and experience to demonstrate viability and expansion possibilities. These trendsetting enterprises have succeeded thus far because international development organisations, donors and businesses have pooled and invested risk-free financial resources to support showcasing the potential of market-based onsite sanitation models.

At the same time, it is clear now that sanitation is a public service that requires public policies, strategies and finance backed by private entrepreneurship and capital. Hence, the conditional viability and return on investment for businesses to enter sanitation markets demand government investment and subsidisation for the poor. On the other hand, sanitation entrepreneurship is largely low-skilled and informal and urgently needs business development support and enabling market reforms. Continued donor and concessional financing of traditional turn-key sewerage systems undermines the efforts to provide sanitation for all. Therefore, a smart sector leap-frogging strategy is needed on how to: (i) internally and externally influence public budgetary systems reforms and allocations; (ii) open the space and incentivise private capital; and (iii) re-orient current donor funding and other development resources to catalyse, align and prepare for public and private investments.

New policy and market fundamentals needed for public financing to increase

Higher public financial allocations should not be a stand-alone solution to increasing access to universal sanitation. Historically, governments have focused on providing sanitation services using traditional sewerage systems without considering the benefits of decentralised and onsite systems. The ongoing public reforms to embrace non-sewered sanitation services cannot gain traction without tackling institutional overlaps, weak operational and management systems, and limited know-how on non-sewered sanitation.

The clamour for increased sanitation financing remains risky and wasteful unless governments have the right policies, regulations, and strategies. Public financing frameworks for sanitation must highlight the leveraging advantage between public, private and grant sources. Governments must develop public-to-private delegation frameworks to clearly define contracting, financing, and investment roles and responsibilities. In addition, sensible regulation and intentional formalisation of sanitation service provision will create investment opportunities for businesses, promote the efficiency of public and private service providers and ensure the affordability of sanitation services by unserved and underserved households.

The community of Mukuru, in Nairobi, Kenya, has been the focus of pilot projects introducing simplified sewer networks for sanitation

A new financing horizon must emerge

 If we are to get anywhere near Sustainable Development Goal 6 (water and sanitation for all by 2030), the global WASH sector needs to redirect the currently available funding towards a new horizon. The need for accelerating universal sanitation cannot be met without addressing the vast public and market investment gap. In addition, sanitation investment for the unserved and underserved can only be met by massively increasing government budgetary commitments, creating a safe space for private capital, and improving concessional and donor funding targeting.

The most fundamental difference between the Millennium Development Goals, set in 2000 for 2015, and SDGs is that domestic resources should primarily drive the latter. The shift in global development goals meant governments, local businesses, and development financiers would innovate multi-stakeholder, sustainable and scalable mechanisms for acceleration and investment to drive massive transformation in all human development sectors. However noble this intention was, it seemed to miss one big thing: that governments were first required to re-orient their priorities, restructure their systems, and transform bureaucratic mindsets. There seems to have been no strategy to make governments implement these much-needed sectoral and budgetary reforms.

Universal access to sanitation financing remains a global and multi-stakeholder challenge. It requires strategic cooperation and participation of governments, businesses, donors, service providers and households. Higher political action, strengthened bureaucratic competencies, and enabling environment reforms will likely lead to higher and more efficient public resources. Financing strategic and sequential actions to attract, assemble, mobilise, and incentivise big public and private investments will soon be a high priority for existing donors and other development partners within the sanitation sector.

Even though sanitation services are a public service, their provision is shifting to a shared and coordinated service between public and private players. This emerging transformation requires public system restructuring to create a fair, viable sanitation market to benefit governments, businesses, and the unserved and disadvantaged people they should serve by 2030. We have been slow to learn and act for too long.

Top image: Pit-emptying service in Lusaka, Zambia

Read also: African Sanitation Policy Guidelines