Can the poor pay for drinking water?

by Rob Hope

Economists often ask awkward questions. With safe drinking water a human right as well one of the world’s 17 Sustainable Development Goals (SDGs) there must be the money to pay for everyone to get drinking water, right? Apparently not. With over two billion people without safely-managed water and 663 million without basic water the costs to meet the target by 2030 runs to US$114 billion per year.

The policy puzzle is how to square safe water for everyone with financial sustainability? As words fly up, delivery on the ground remains tricky. So if we ask the question from the perspective of the poor, and what they will pay, does that help us think of new ways forward? The question is toughest in the poorest places where progress has been slowest. For example, the cost estimates to meet the SDG in sub-Saharan Africa are more than three times higher than in Asia as a share of regional income.

We’ve looked at the puzzle in two ways.

Can we learn from the past?

By collecting payment records from rural communities in Kenya we compiled 229 years of data and over 50,000 payment transactions. What this told us was payments are influenced by four main factors: seasonality, livestock use, convenience and water quality.

Handpump and livestock by Tim Foster.JPG

Handpump and livestock (Tim Foster)

Payment systems are pegged to lower rainfall when demand is higher and people will pay. Projections of longer and less predictable dry periods pose significant risks when people converge on few waterpoints to serve many.

Waterpoints often provide water for cattle and goats, which can compound variable demand. The implication is water may pay for water if it generates income.

If a waterpoint is closer, that reduces travel time and creates value. Finally, the quality of the groundwater matters. Installing a waterpoint with low quality means few people will likely pay, reducing any return on investment and leaving the community little better off.

Can we improve service delivery?

Often communities take weeks or months to fix broken waterpoints. One approach is to consider that payments are contingent on service delivery, so we supported local maintenance service providers to fix repairs faster. The FundiFix model guarantees a repair within three days for a monthly payment of US$10. To ensure accountability, a transmitter fitted to the handle of ‘smart handpumps’ sends data to the cloud to track performance. Given the communities cannot bear all the costs, we found local companies were willing to contribute to meet the shortfall if the service provided evidence of collecting payments, fast repairs and expanding their business.

Kakamega installation Sept 2015.JPG

Kakamega installation

This is now working in two counties in Kenya (PDF) with over 75,000 people registered in 28 piped schemes and 112 community handpumps, providing 72 million litres of water and contributing over USD9,000 in payments in the last year. 95% of 436 repairs were repaired in three days and almost all handpump faults were fixed in 24 hours. 74 schools are in the system with 25,000 students now getting more reliable water every day.

water trust funds 400.pngWith user payments insufficient to cover all the costs, Water Services Maintenance Trust Funds provide an independent financing instrument to blend user payments with performance contracts from companies, donors and government. Government interest is growing with new policy providing the legal basis for service contracts and investment. Private companies have already invested in the trust funds, motivated by users paying and verifiable outcome metrics. Across Africa, we see FundiFix is one of a new generation of service delivery models where social enterprises are creating value for rural people who are willing to pay for reliable drinking water services.

water scheme facts

hope-rob 150.jpgRob Hope is a Professor of Water Policy at the School of Geography and the Environment and Smith School of Enterprise and Environment at the University of Oxford. His research focuses on water economics, policy and poverty in Africa and Asia working with government, private sector and local communities. The work has been supported by UKRI (ESRC, NERC, EPSRC), UNICEF and UK DFID’s REACH programme.

Throughout 2019 we will be using the #ESRCBetterLives hashtag to showcase outstanding social science research and demonstrate how social science is relevant to everyone. Our Better Lives theme for March is ‘equality’. What social science research has inspired you?

This year’s World Water Day, on 22 March, is about tackling the water crisis by addressing the reasons why so many people are being left behind.

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