Market-Driven Sanitation Services – An Academic Look (Part 1)

In October 2014, Mark O’Keefe and a team from The Swiss Federal Institute of Aquatic Science and Technology (Eawag) conducted a study of sanitation conditions in informal settlements in Nairobi and Kampala, comparing user practices, sanitation providers, and the challenges they face. They looked at Sanergy as a case study of market-based sanitation provision and the role it can play in informal settlements. Their study was published this month by SAGE Publications. This series of blog posts distills their academic findings for a broader audience. All statistics cited in this blog post are taken from the study itself, unless otherwise noted.

More than 180 million people in sub-Saharan Africa lack access to improved sanitation. The build-up of waste in densely populated informal settlements leads to the transmission of diseases such as diarrhea and cholera, which in turn has a detrimental health and economic impact. More than 17,000 Kenyan children under 5 die every year due to diarrheal disease, and 90% of cases are linked to poor sanitation. The World Bank estimates that the Kenyan economy loses almost USD 1 million every day from diarrheal disease-related work absences. Kenyans spend an extra USD 1.1 million on health care because of poor sanitation.

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Mukuru Slum in Nairobi, Kenya                                       Photo Credit: Callum Jelley

Despite the huge need, there are several challenges for sanitation provision in informal settlements: weak or conflicting governance arrangements, a lack of formal ownership arrangements, a transient population, a lack of high-level political leadership aimed at improving access to basic services, and poor existing infrastructure for waste removal.

The absence of government provision within these informal settlements has allowed for a multitude of actors, operating at different scales and with different institutional arrangements, to create a complex patchwork of provision systems, which do not always align to form a coherent and sustainable sanitation system.

Most residents in Africa’s informal settlements have four sanitation options:

  1. They can build facilities for themselves and employ informal or small-scale service providers to empty on-site sanitation facilities;
  2. They can frequent largely unregulated businesses that provide basic sanitation services at a relatively high cost;
  3. Some residents can now avail themselves of municipal infrastructure provided by pro-poor divisions of municipal service providers; and
  4. They can use options provided by non-governmental and community-based organizations.
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Children playing in Mukuru                                             Photo Credit: Callum Jelley

Out of this patchwork, a new model in service provision for informal settlements has arisen: the development of affordable sanitation technologies through the creation of a sustainable business model. This has led to increased interest and investment in “full sanitation value chain” initiatives for informal urban markets. This trend positions the government as the central node within a network of service providers, each with its own task. The state is then responsible for network governance, establishing regulations and monitoring uniform standards throughout the network, working with service providers to ensure efficient and effective service delivery.

The underlying philosophy behind this push toward market-based approaches is that economic incentives can result in more efficient and effective delivery of public services. In addition, supporting productive end-use or reuse of human waste can stimulate new integrated solutions that can generate a profit, or at least recover operation costs. There are several social enterprises focused on optimizing the sanitation value chain to provide sanitation and useful byproducts to customers. These include Sanergy in Nairobi, SOIL Haiti in Port-au-Prince, and X-Runner in Lima, Peru.

In order for these market-based approaches to succeed, a thorough understanding of the place-specific context is needed. The next post in this series will examine the current state of sanitation service provision in informal settlements in Nairobi and Kampala.

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