More than two billion people globally lack access to sanitation. Planners generally assume that poor people will only pay for water but not for sanitation, which often costs more. Where governments take full financial responsibility for sanitation projects, these projects end as soon as budgets ran low. The challenge remains to use limited public financial resources to stimulate household demand for improved sanitation.

Research from the Water and Sanitation Program analyses a different approach to financing urban sanitation. Burkina Faso has adopted a strategy to stimulate demand and encourage small scale providers. The study focuses on a small surcharge to the water bill used to extend urban sanitation.

Currently, 61 percent of Burkina Faso’s population have access to water but only 29 percent have access to sanitation. Burkina Faso’s government has aimed to improve access to drinking water and sanitation since the 1980s and created the National Water and Sanitation Office (ONEA) to help do this. At the same time, the government chose to place a surcharge directly on water invoices, instead of seeking funds from the central government’s tax collection and management system.

Poor households, opting for simpler on-site technologies, paid the bulk of the capital costs of their sanitation. These households pay a significantly lower surcharge than those connected to more expensive sewerage networks, which were financed through national loans. Joint billing of water and sanitation greatly improved cost recovery at a rate of 87 percent for the years 1996-2000.

In 1999, the sanitation surcharge collected US$ 0.5 million. The majority of these funds were used to promote on-site sanitation and finance hygiene education in schools, and only one quarter was used to subsidise construction. In general, the programme is estimated to have given 160,000 people (15 percent of Ouagadougou’s population) access to better sanitation.

The authors highlight the following key findings by ONEA:

• The strategy was effective in improving household-financed investment in the sector through on-site sanitation.
• The levy and use of the surcharge was managed by an operationally and financially viable organisation, which was critical to its success.
• The surcharge revenues were transferred directly to a dedicated sanitation account without central government intervention. This offered the most transparent and efficient distribution of resources possible.
• The organisation focused on promoting rather than providing sanitation, using its funds as a lever to stimulate household investment.
• Misunderstanding about the purpose and use of these ‘tax’ funds can easily arise in the government so care is taken to report regularly to government about how they are used.

The authors present the following recommendations from ONEA with regard to financing sanitation in other settings:

• In developing such a surcharge, affiliate the sanitation services with an institution capable of managing revenues.
• Implement ‘Fees for sanitation services’ rather than a ‘sanitation tax’, and ensure autonomous management of the surcharge by those who provide the service.
• Designate funds specifically for sanitation projects, not just ‘general purposes’.
• Keep sanitation costs to a minimum and learn from demand of consumers.

Source(s):
‘Mobilizing Resources for Sanitation’, Water and Sanitation Program, Field Note by Annie Savina and Peter Kolsky, August 2004. Full document.

Funded by: Water and Sanitation Program

id21 Research Highlight: 11 July 2006

Further Information:
Water and Sanitation Program – Africa
World Bank
Hill Park Building
P.O. Box 30577 – 00100
Upper Hill
Nairobi
Kenya

Tel: 254 20 3226370
Fax: 254 20 3226386
Contact the contributor: wspaf@worldbank.org

Water and Sanitation Program - Africa

Other related links:
‘The Challenge of Financing Sanitation for Meeting the Millennium Development Goals’ by Meera Mehta and Andreas Knapp, WSP-Africa, April 2004

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'Water kiosk operators achieve credibility in Nairobi slum'

'Affordable water and sanitation technologies in small towns'