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Entrepreneurial Improvements To Water And Sanitation Could Cause $480B Swing In Global Economy

This article is more than 9 years old.

In the Rime of the Ancient Mariner, the mariner in question is surrounded by water but unable to drink due to the salt.

In some parts of the developing world, it is cholera that makes the water almost as undrinkable as that of the mariner’s sea. Solving the issues that cause this could be worth as much as $480 billion to the global economy, according to WaterAid, an international charity improving access to safe water, hygiene and sanitation.

In Ubanizacao, an area  in Maputo, the capital of Mozambique, a high water table, flooding and the presence of solid human waste throughout the town combine together to create a serious problem.

Since then, local residents have been looking for an alternative to water-company infrastructure that provides infrequent, low-pressure supply not worth the price paid. ADASBU, the Association for the Development of Water and Sanitation in Urbanizacao Quarter, has set up a commercial project that it hopes will provide a better service.

The project is a public private partnership (PPP) with Aguas da Regiao de Maputo, a private-sector local utility, that includes a drainage system to stop flooding, a number of pit latrines to cut down on the presence of open defecation and human waste in the community, and a system of collection using municipal workers to gather the waste with a machine (a vacu-tug) when full and transport it for processing.

Aguas da Regiao de Maputo and ADASBU have then worked to distribute taps throughout the community. Each household can buy one for 3,000 Mozambique Metical ($96, £60) (payable over six instalments to make it more affordable) with water-usage costing a further 30-40 Metical ($.96-$1.28, £.57-.76) per cubic meter.

Maputo seen from the air, from southeast. (Photo credit: Wikipedia)

A similar story can be seen in Zambia. There, the local utility, the Southern Water and Sewage Company (SWASCO), contracted out water provision to local managers and vendors that sell water by the 20 litre container and pay a monthly fee back to SWASCO, says Dave Hillyard, an economist and head of major partnerships at WaterAid. That monthly fee is then used to maintain infrastructure such as boreholes, solar pumps and pipe networks, he adds.

This system can prove to be a successful way of expanding water access in urban and high-population clusters. “In cities and towns, growth is rapid and current infrastructure is inadequate. Public authorities often have insufficient funds to improve it, so there is a real opportunity to come in and provide a service on a commercial basis,” says Hillyard. “We believe in those environments it’s a sustainable, long-term option.”

Landscape, Zambia (Photo credit: Wikipedia)

Although rural areas generally lack the density to make solely private water infrastructure commercially unviable, a combination of public and private money can help to spread access.  For example, charities such as WaterAid and the Stone Foundation are using their money and expertise to install gravity water systems in rural areas. These are then taken over by a private supplier, E.C. Abraham, which collects revenue through the metering of taps and assumes responsibility for ongoing support and maintenance.

Residents in towns can pay to have a private connection installed directly to their houses and pay a higher metering fee. Those in more remote areas can ask to the charities to pay for the connection and then club together to pay ongoing metering.

For those that can’t afford private connections, public taps are also constructed. These are located in a kiosk and managed by a supervisor who receives 20% of the fees paid. It is another example of entrepreneurship succeeding where pure charity has failed. Previously pumps had been installed in parts of the country where people could collect water for free.

But it the pumps were poorly maintained and not treated well by users. With no one in charge, people would also damage the pump or cut in lines. The Queues were also long – meaning hours of waiting, sometimes fruitlessly if the pump stopped working, says Josiane Rahelisoa, a juice-seller in Madagascar. “Now it’s much more organized, the management is better. There are opening and closing times and it’s inside a house,” she adds. “As far as the pumps concerned – now we don’t have any arguments about the pump. The opening and closing hours are regular and there were long queues caused by the growing population in the area.”

This activity also has a knock-on effect in the wider economy. For example, Rahelisoa is able to spend the time she previously wasted collecting water on building and maintaining her business.  “Now I can go to the market to choose what I want and I am free to do that. Before I had to ask someone to go for me as I was stuck waiting for the standpipe,” she says. “This means I can look after my juice business more. When there are people that need more juice I can prepare it quickly and deliver it because I have more time.”

This knock-on effect could help to create further opportunities in local communities – alleviating poverty and generating wealth in a massive way. WaterAid estimates that universal access to water and sanitation facilities would increase the world economy by about $260 billion (£157.6 billion), while the lack of access creates a cost of $220 billion (£133.4 billion). Surprisingly, the majority of this $480 billion swing stems from time wasted. Not medical costs as might initially be thought.

It all goes to show how small ideas can make a big difference.

This article is part two of a two part look at water and sanitation in the developing world. Check out part one, on sanitation, here

View on the Betsiboka river and Bombetoka bay (Photo credit: Wikipedia)