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Water, Sanitation and Economy

Compiled by:
Stefanie Keller (seecon international gmbh)

Executive Summary

Around the world, particularly in developing countries, diseases associated with poor water and sanitation still have a considerable impact on public health. It is essential to recognise the basic right of all human beings to have access to clean water and sanitation at an affordable price. Past failures in recognising the economic value of water has led to wasteful and environmentally damaging uses of this scarce resource. Managing water as an economic good is an important way of achieving efficient and equitable use, and of encouraging conservation and protection of water resources. It is economically wise to invest in water and sanitation infrastructure. Quantifying the costs averted and benefits gained from improvements in water and sanitation is difficult, but estimates show that the benefits far outweigh the costs of such investments.

Introduction

(Adapted from WHO 2004)

All over the world, mainly in developing countries, diseases associated with poor water and sanitation still have considerable public health significance. In the year 2003, it was estimated that 4% of the global burden of disease and 1.6 million deaths per year are related to unsafe water supply and sanitation, including lack of hygiene. By the end of 2011, still 2.5 billion people were without access to improved sanitation, and 768 million without access to improved drinking water sources. While access in Asia and Latin America has improved significantly over the past decades, many countries in Africa are far off track to meet the Millennium Development Goals (WHO/UNICEF 2013).

Worldwide use of improved sanitation facilities in 2011. Source: WHO/UNICEF (2013)

Worldwide use of improved drinking water sources in 2011. Source: WHO/UNICEF (2013)

In order to increase the rate of access to improved water and sanitation, further advocacy is needed at international and national levels to increase resource allocations to this process. In the existing climate where poverty reduction strategies dominate the development agenda, the potential productivity and income effects of improved access are a significant argument to support further resource allocations to water and sanitation infrastructure.

Economic Value of Water and Sanitation

(Adapted from GWP 2008 and HANEMANN 2006)

Most people assume that the economic value of a resource, product or service is measured by market price. Even economists sometimes make this statement: “In a market system, economic values of water, defined by its price, serve as a guide to allocate water among alternative uses, potentially directing water and its complementary resources into uses in which they yield the greatest economic return” (WARD & MICHELSEN 2002). Yet, it is easy to understand that this is not the case: For instance, “it is often those who can least afford it that pay higher prices for drinking water. On average, those on low incomes spend a significantly greater proportion of their income on water than do the wealthy, thereby affecting their ability to provide for other basic needs such as food, shelter, clothing, housing, health and education. The absolute price they pay to water vendors can be ten times or more the price per litre supplied through the pipes” (COHRE et al. 2008).

If it were true that economic value is measured by market price, this would imply that only marketed commodities could have an economic value. Consequently, items that are not sold in a market, including the natural environment, and public goods generally would have no economic value. But in fact, the economic value does not equal the price of a resource. Price does not in general measure economic value, and items with no market price can still have a significant economic value.

Is water therefore an economic commodity and can it be analysed using the conceptual framework of economics in the same way as any other commodity? One of the four Dublin Principles, adopted at the 1992 International Conference on Water and the Environment in Dublin, says that “water has an economic value in all its competing uses and should be recognised as an economic good”.

It is essential to recognise the basic right of all human beings to have access to clean water and sanitation at an affordable price. Past failure of recognising the economic value of water has led to wasteful and environmentally damaging uses of the resource. Managing water as an economic good is an important way of achieving efficient and equitable applications, and of encouraging conservation and protection of water resources (see also IWRM).

Furthermore, also value and charges are two different things. The value of water in alternative uses is important for the rational allocation of water as a scarce resource, whether by regulatory or economic means. Charging (or not charging) for water and sanitation is applying an economic instrument to support disadvantaged groups, affect behaviour towards conservation and efficient water usage, provide incentives for demand management, ensure cost recovery and signal consumers’ willingness to pay for additional investments in water and sanitation services (see also water tariffs).

Economic Costs of Water and Sanitation Services

(Adapted from TEARFUND 2008 and WHITTINGTON & HANEMANN 2006)

It is economically wise to invest in water and sanitation? Quantifying the costs averted and benefits gained from improvements in water and sanitation is difficult, but best estimates show that the benefits far outweigh the costs of such investments. The United Nations (UN) reports that for every $1 invested in water and sanitation, there are around $8 gained through averted costs (for healthcare, illness etc.) and increased productivity. In 2004, the World Health Organisation (WHO) found that investing $1 in water, sanitation and hygiene education would bring health and other benefits of between $3 and $34, depending on the technology used.

Research done for the 2006 UN Human Development Report estimated that the total cost of the current deficit in investment in water and sanitation is $170 billion, what means 2.6 % of all developing countries’ GDP.

Achieving the millennium development goals (MDG) on water and sanitation in sub-Saharan Africa would require an additional investment of around $10 billion a year by delivering the most low-cost, sustainable technology. Universal access to water and sanitation would require $20–30 billion, depending on the technology (TEARFUND 2008).

The economic costs of providing a household with modern water and sanitation services are the sum of seven main components:

 

 

Economic Benefits of Improved Water and Sanitation Services

(Adapted from TEARFUND 2008 and UN-WATER 2008)

Investing in sanitation and water improvements leads to various direct and indirect economic benefits:

 

  • By reducing direct and indirect health costs: Hygiene and sanitation are among the most cost-effective public health interventions. Almost half of the people living in the developing countries are suffering from one or more of the main diseases associated with inadequate provision of water and sanitation (such as diarrhoea, guinea worm, or trachoma which can lead to blindness). Children in households with no toilet are twice as likely to get diarrhoea as those who have one. Increasing access to water and sanitation is likely to lead to significant health benefits and therefore reducing the financial burden on health systems in the developing world. It is estimated that universal access to even the most basic facilities would reduce the health related costs by around $1.7 billion, annually – including $610 million in sub-Saharan Africa, which represents around 7 % of the region’s health budget (TEARFUND 2008 and UN-WATER 2008) (see also health and hygiene issues).
  • By saving time: People without toilets or taps at home spend a lot of time each day queuing up for public toilets or seeking secluded spots for open defecation, or for collecting water. Improved sanitation would give every such household an additional 1’000 hours in a year to work, study, care for children, engage in collective efforts, and rest. This time has an estimated annual economic value of well over US$ 100 billion each year. Furthermore, research has shown that households in rural Africa typically spend one fourth of their day fetching water. Some 40 billion working hours are spent carrying water each year in sub-Saharan Africa (TEARFUND 2008 and UN-WATER 2008).

 K. Conradin (2005)

The time women must invest in carrying water over long distances can be reduced through investments into water infrastructure. Source: CONRADIN (2005)

  • By increasing the return on investments in education: Various developing countries are raising education spending to meet the MDG targets for school enrolment. That spending will have a greater impact if some of the money goes to providing toilets for students and teachers, with separate facilities for girls. Healthy children learn more than children suffering from worm infections, which sap nutrients and calories and lead to listlessness and trouble concentrating. For example, up to two thirds of all schoolchildren in some African countries are infected with parasitic worms (UN-Water 2008) (see also school campaigns).
  • By gaining productivity: Improved access to water and sanitation could lead to a large increase in productivity in developing countries, with potential for rising household incomes and economic growth. This includes benefits from reduced diarrhoea which is estimated that 3.2 billion working days would be gained for people aged 15–59 from creating universal access to water and sanitation. Annual time savings from more convenient water supplies would amount to another 20 billion working days – most of them gained by women (TEARFUND 2008) (see also water sanitation and gender).
  • By protecting investments in improved water supply: Poor sanitation can limit the impact of drinking water quality improvements. The risks of water contamination during household storage and handling sharply increase in environments that lack toilets. Contamination of local water resources used to supply drinking water can lead to unnecessary investment in more distant and expensive sources (UN-Water 2008).
  • By safeguarding water resources: Water resources are an important productive asset. Agriculture, fish production, energy production, large-scale industrial processes, small-scale industry, transport, and recreation all suffer economic harm from the increased treatment and other costs due to water pollution by faecal contamination or other pollution sources (UN-WATER 2008) (see e.g. water safety plans).
  • By boosting tourism revenues: In the year 2006, tourism produced over US$ 6,000 billion-worth of economic activity, accounting for 10 % of global GDP and almost 9 % of total global employment. Because health, safety, and aesthetic considerations heavily influence people’s choice of a holiday destination, good sanitation and water supply is a pre-requisite for a thriving tourism sector (UN-WATER 2008).

 

See also p. 59ff. of the “Sick Water Report” mentioned further below for a chapter on understanding the costs and benefits of wastewater management.

Tools of Economic Analysis of Water and Sanitation

(Adapted from SUSANA 2009)

For economic analysis regarding water and sanitation, input data will include not only the financial cash flows, but also in-kind or external costs and benefits. Health and environmental outcomes are assessed in some form most commonly in these economical analyses. For example the prevention of pollution of water bodies can be measured in terms of cost per kg of biochemical oxygen demand (BOD) removal. This approach is helpful if some costs and benefits (e.g. own labour for investment, time savings during use) can be valued easily, while there are no reliable data for other important benefits (e.g. health or environment). If monetary valuation of all major economic costs and benefits seems possible, a cost-benefit analysis may include the following outputs:

 

  • Costs and benefits as share of household income: The economic analysis on household level will include all costs and benefits of households. This allows for example to better assess whether the total economic costs are affordable or whether benefits are high enough to be perceived as such. Ratios can also be determined for responsible institutions.
  • The cost-benefit ratio: The cost-benefit ratio is calculated by dividing the discounted benefits by the discounted costs of the sanitation and water intervention, and can be used to compare a sanitation or water option with ‘doing-nothing’.
  • The internal rate of return: The internal rate of return measures the equivalent return on investment in percentage terms, taking into account monetary cash flows as well as non-monetary costs and benefits over the lifetime of the sanitation and water improvement.
  • The cost-effectiveness ratio: The cost-effectiveness ratio is a more specific tool that compares costs with a single outcome of sanitation and water improvement, expressed in physical (non-monetary) units such as inhabitants better served, health gain or reduction in pollution. This tool is generally used in public sector planning.

The Problem of Water and Sanitation from an Economic Perspective

(Adapted from HANEMAN 2006)

It is commonly said that the problem of water is not one of economics but politics, not one of physical shortage but governance. This is partly correct but not entirely. The generic problem of water and sanitation is one of matching demand with supply, ensuring that there is water of a suitable quality at the right location and the right time, and at a cost that people can afford and are willing to pay (see also creating an enabling environment).

The difficulty in accomplishing this is partly institutional and certainly includes problems of governance. However, some of the problems of governance themselves have an economic explanation.

The omnipresence of fixed costs in surface water supply creates a classic economic problem of cost allocation which has no satisfactory technical solution. The extraordinary capital intensity and longevity of surface water supply infrastructure, and predominance of economic scale, creates a need of collective action in the provision and financing of water supply that simply does not arise with most other commodities.

References Library

COHRE (Editor); AAAS (Editor); SDC (Editor); UN-HABITAT (Editor) (2007): Manual on the Right to Water and Sanitation. Geneva: Centre on Housing Rights and Evictions (COHRE). URL [Accessed: 22.04.2012]. PDF

CORCORAN, E. (Editor); NELLEMANN, C. (Editor); BAKER, E. (Editor); BOS, R. (Editor); OSBORN, D. (Editor); SAVELLI, H. (Editor) (2010): Sick Water? The central role of wastewater management in sustainable development. A Rapid Response Assessment. United Nations Environment Programme (UNEP), UN-HABITAT, GRID-Arendal. URL [Accessed: 05.05.2010]. PDF

GWP (Editor) (2008): Chapter 4: Social and economic value of water. Global Water Partnership. URL [Accessed: 28.09.2010].

HANEMANN, W.H. (2006): The economic conception of water. In: Water crisis: myth or reality?. URL [Accessed: 22.04.2012]. PDF

HUTTON, G.; HALLER, L. (2004): Evaluation of the Costs and Benefits of Water and Sanitation Improvements at the Global Level. Geneva: World Health Organisation (WHO). URL [Accessed: 01.11.2012]. PDF

SUSANA (Editor) (2009): Factsheet Cost and Economics. Eschborn: Sustainable Sanitation Alliance. URL [Accessed: 28.09.2010]. PDF

TEARFUND (Editor) (2008): Water and Sanitation: The Economic Case for Global Action. Teddington: Tear Fund. PDF

UN-WATER (Editor) (2008): Sanitation is an investment with high economic returns. New York: UN-Water. URL [Accessed: 22.04.2012]. PDF

WARD, F.A. ; MICHELSEN, A.M. (2002): The Economic Value of Water in Agriculture: Concepts and Policy Applications. In: Water Policy 4, 423-446.

WHITTINGTON, D.; HANEMANN, W. M. (2006): The Economic Costs and Benefits of Investments in Municipal Water and Sanitation Infrastructure: A Global Perspective. Berkeley: Department of Agricultural & Resource Economics. URL [Accessed: 28.09.2010]. PDF

WHO (Editor); UNICEF (Editor) (2010): Joint Monitoring Programme for Water Supply and Sanitation . Geneva: World Health Organisation (WHO) and United Nations Children's Fund (UNICEF). URL [Accessed: 22.05.2012].

WHO (Editor); UNICEF (Editor) (2013): Progress on Sanitation and Drinking-Water. 2013 Update. New York/Geneva: United Nations International Children’s Emergency Fund (UNICEF)/World Health Organisation (WHO). URL [Accessed: 21.08.2013]. PDF

Further Readings Library

Reference icon

CORCORAN, E. (Editor); NELLEMANN, C. (Editor); BAKER, E. (Editor); BOS, R. (Editor); OSBORN, D. (Editor); SAVELLI, H. (Editor) (2010): Sick Water? The central role of wastewater management in sustainable development. A Rapid Response Assessment. United Nations Environment Programme (UNEP), UN-HABITAT, GRID-Arendal. URL [Accessed: 05.05.2010]. PDF

This book not only identifies the threats to human and ecological health that water pollution has and highlights the consequences of inaction, but also presents opportunities, where appropriate policy and management responses over the short and longer term can trigger employment, support livelihoods, boost public and ecosystem health and contribute to more intelligent water management.


Reference icon

GENSCH, R.; DAGERSKOG, L.; WINKLER, M.; VEENHUIZEN, R. van; DRECHSEL, P. (2011): Productive Sanitation and the Link to Food Security. Sustainable Sanitation Alliance (SuSanA). URL [Accessed: 22.05.2012]. PDF

This factsheet provides information on the link between sanitation and agriculture as well as related implications on health, economy and environment. It shows examples of treating and using treated excreta and wastewater in a productive way and describes the potential for urban agriculture and resource recovery in rural areas. Institutional and legal aspects, business opportunities and how to manage associated health risks are also discussed


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HAMMOND, A.; KRAMER, W.; KATZ, R. ; TRAN, J.; WALKER, C.; WRI (Editor) (2007): The Next 4 Billion. Market Size and Business Strategy at the Base of the Pyramid. Washington DC: World Resources Institute (WRI). URL [Accessed: 22.06.2011]. PDF

Four billion low-income people, a majority of the world’s population, constitute the base of the economic pyramid. New empirical measures of their behavior as consumers and their aggregate purchasing power suggest significant opportunities for market-based approaches to better meet their needs, increase their productivity and incomes, and empower their entry into the formal economy.


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HANEMANN, W.H. (2006): The economic conception of water. In: Water crisis: myth or reality?. URL [Accessed: 22.04.2012]. PDF

This article explains the economic concept of water, or, to say it differently, how certain economists think about water.


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HUTTON, G.; HALLER, L. (2004): Evaluation of the Costs and Benefits of Water and Sanitation Improvements at the Global Level. Geneva: World Health Organisation (WHO). URL [Accessed: 01.11.2012]. PDF

The aim of this study was to estimate the economic costs and benefits of a range of selected interventions to improve water and sanitation services, with results presented for 17 WHO sub-regions and at the global level. The results show that all water and sanitation improvements were found to be cost-beneficial, and this applied to all world regions. The main


Reference icon

HUTTON, G. (2012): Global costs and benefits of drinking-water supply and sanitation interventions to reach the MDG target and universal coverage. (= WHO/HSE/WSH, 1/12). Geneva: World Health Organization. URL [Accessed: 01.11.2012]. PDF

The present study aimed to estimate global, regional and country-level costs and benefits of drinking-water supply and sanitation interventions to meet the MDG target in 2015, and to attain universal coverage. This report updates previous economic analyses conducted by the World Health Organization, using new WSS coverage rates, costs of services, income levels and health indicators.


Reference icon

IRC (Editor) (2012): Providing a basic level of water and sanitation services that last: cost benchmarks. (= WASHCost Infosheet, 1). The Hague: International Water and Sanitation Centre (IRC). URL [Accessed: 01.11.2012]. PDF

Over the past four years WASHCost teams in Burkina Faso, Ghana, Andhra Pradesh (India) and Mozambique have collected, validated and analysed cost and service level information for water, sanitation and hygiene. This Infosheet provides an overview of the minimum benchmarks for costing sustainable basic services in developing countries. The benchmarks are useful for planning, assessing sustainability from a cost perspective and for monitoring value for money.


Reference icon

OECD (Editor) (2011): Benefits of Investing in Water and Sanitation. An OECD Perspective. Paris: Organisation for Economic Co-Operation and Development (OECD) Publishing. URL [Accessed: 22.06.2011]. PDF

The report highlights that overall benefits from investing in water and sanitation are likely to be large, but that there are wide variations depending on the type of investments made along the water and sanitation services “value chain” and the local conditions.


Reference icon

SCHROEDER, E. (2011): Marketing Human Excreta. A study of possible ways to dispose of urine and faeces from slum settlements in Kampala, Uganda. Eschborn: Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ). URL [Accessed: 27.02.2012]. PDF

Some key findings include: High sociocultural barriers associated with handling and using human excreta as fertilizer exist; sensitization does change people’s perceptions and behaviors considerably; and economical tools like the incentives applied in this study are helping to change people’s perceptions and behaviors.


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SUSANA (Editor) (2009): Factsheet Cost and Economics. Eschborn: Sustainable Sanitation Alliance. URL [Accessed: 28.09.2010]. PDF

This factsheets gives an overview about costs and economic issues related to sanitation.


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TEARFUND (Editor) (2008): Water and Sanitation: The Economic Case for Global Action. Teddington: Tear Fund. PDF

This document describes some of the cost and benefits of improved water and sanitation.


Reference icon

TREMOLET, S. (2012): Sanitation Markets. Using economics to improve the delivery of services along the sanitation value chain. London: Sanitation and Hygiene Applied Research for Equity (SHARE). URL [Accessed: 29.01.2013]. PDF

The "sanitation economics" approach used throughout the paper consists of applying economic principles, approaches and tools to evaluate a number of "sanitation markets" alongside the sanitation value chain. Each segment of the sanitation value chain can be conceived as a separate "sanitation market", with different actors demanding and providing sanitation services.


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UN-WATER (Editor) (2008): Sanitation is an investment with high economic returns. New York: UN-Water. URL [Accessed: 22.04.2012]. PDF

This paper describes some of the most important economical benefits of improved sanitation.


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UN WATER (Editor) (n.y.): Sanitation is a Good Economic Investment. (= Factsheet, 4). United Nations Water (UN WATER). URL [Accessed: 17.10.2011]. PDF

This factsheet briefly shows the connections between toilets and business.


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WASHCOST (Editor) (2012): The cost of sustaining sanitation serivces for 20 years. (= WASHCost Infosheet, 2). Den Haag: IRC International Water and Sanitation Centre. URL [Accessed: 01.11.2012]. PDF

Expenditure on sanitation in countries where WASHCost has carried out research is too low, and is focused almost entirely on the capital costs of building latrines. There is a striking difference between the expenditure required to provide a basic service and what is actually being spent. Too little is being spent on stimulating and sustaining demand for hygienic latrine use and on ensuring that latrines are kept clean and in good repair. The absence of arrangements for pit emptying and measures to ensure environmental protection is adversely affecting service levels.


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WSP (Editor) (2011): Economics of Sanitation Initiative: What Are the Economic Costs of Poor Sanitation and Hygiene?. Washington, D.C.: Water and Sanitation Program (WSP). URL [Accessed: 06.02.2012]. PDF

The Economics of Sanitation Initiative, launched in 2007 with a WSP study from East Asia, found that the economic costs of poor sanitation and hygiene amounted to over US $9.2 billion a year (2005 prices) in Cambodia, Indonesia, Lao PDR, the Philippines, and Vietnam, affecting a total population of more than 400 million. The groundbreaking study was the first of its kind to attribute dollar amounts to a country’s losses from poor sanitation.


Reference icon

THE WORLD BANK (Editor); WSP (Editor); IFC (Editor) (2013): Tapping the Market - Opportunities for Domestic Investments in Water for the Poor. (= Conference Edition). Washington: The World Bank, Water and Sanitation Program (wsp), International Finance Corporation (IFC). URL [Accessed: 05.09.2013]. PDF

To improve access to safe water, particularly by the poor, developing country governments and the international development community are looking to the domestic private sector to play an expanded role. This report examines piped water schemes in rural areas of Bangladesh, Benin, and Cambodia and concludes that in the three study countries, un-served people could increasingly rely on service provision through the domestic private sector as the potential market the domestic private sector could be serving is very large.


Reference icon

THE WORLD BANK (Editor); WSP (Editor); IFC (Editor) (2013): Tapping the Market - Opportunities for Domestic Investments in Sanitation for the Poor. (= Conference Edition). Washington: The World Bank, Water and Sanitation Program (wsp), International Finance Corporation (IFC). URL [Accessed: 05.09.2013]. PDF

To improve access to sanitation, particularly by the poor, developing country governments and the international development community are looking to the domestic private sector to play an expanded role. This report examines private sector provision of on-site sanitation services in Bangladesh, Indonesia, Peru, and Tanzania and concludes that in the study countries, un-served people could increasingly rely on service provision through the domestic private sector as the potential market the domestic private sector could be serving is very large.


Case Studies Library

Reference icon

DODANE, P.H.; MBEGUERE, M; SOW, O.; STRANDE, L. (2012): Capital and Operating Costs of Full-Scale Fecal Sludge Management and Wastewater Treatment Systems in Dakar, Senegal . In: Environmental Science & Technology 46, 3705. URL [Accessed: 15.01.2013]. PDF

This study makes a financial comparison of a parallel sewer based (SB) system with activated sludge, and an FSM system with onsite septic tanks, collection and transport trucks, and drying beds. In addition to costing less overall, FSM operates with a different business model, with costs spread among households, private companies, and the utility. The results of the study illustrate that in low-income countries, vast improvements in sanitation can be affordable when employing FSM, whereas SB systems are prohibitively expensive.


Reference icon

KLUTSE, A. (2009): Planning and Implementation of Sustainable Sanitation in Peri/Semi- Urban Settings a Need for Development of Existing Tools?. Ouagadougou: Centre Regional Pour l'Eau Potable et l'Assainissement a faible couts (CREPA). URL [Accessed: 05.01.2011]. PDF

This presentation is an example (case study) of planning of an ecological sanitation program in low income countries.


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MALLOY-GOOD, S.; SMITH, K. (2008): Cost-Benefit Analysis of Improved Water and Sanitation for Women and Girls in Sub-Saharan Africa. Columbia University School of Social Work. Economics for International Affairs. URL [Accessed: 22.04.2012]. PDF

This document is a case study and explains the cost-benefit analysis of improved water and sanitation in Sub-Saharan Africa.


Reference icon

NORMAN, G.; PARKER, S.; WSUP (Editor) (2011): Business models for delegated management of local water services: experience from Naivasha (Kenya). (= Topic Brief, 2). London: Water & Sanitation for the Urban Poor (WSUP). URL [Accessed: 03.03.2011]. PDF

This Topic Brief describes a business model for delegated management of local water services, recently developed with WSUP support in the Kenyan Rift Valley town of Naivasha. This business model is designed to ensure affordable but high-quality services for consumers, profitability for the operators, and sufficient revenues for sustainable asset maintenance.


Reference icon

WSP (2009): Study for Financial and Economic Analysis of Ecological Sanitation in Sub-Saharan Africa. Washington: Water and Sanitation Program (WSP). URL [Accessed: 10.01.2011]. PDF

This study focuses on the comparison of ecosan with conventional sanitation systems suitable for urban settlements in Sub-Saharan Africa. The aim of the study was to compare ecosan with conventional sanitation systems in terms of financial and economic costs and benefits, in order to assist decision-makers and sponsors of development programs to make informed decisions about relative merits of different types of sanitation. Based on two case study analysis, none of the currently implemented systems are seen to provide an obvious model for scaling up without considerable external support.


Awareness Raising Material Library

Reference icon

KNAPP, A. (2009): Financial and Economic Analysis of Ecological Sanitation in Sub-Saharan Africa. PPT Presentation. (= World Water Week Stockholm, 2009). URL [Accessed: 10.01.2011]. PDF

This presentation shows the main results of a study on financial and economic analysis of ecological sanitation (ecosan) in Sub-Saharan Africa. It focuses on a comparison of ecosan with conventional sanitation systems suitable for urban settlements. The aim of the study was to compare ecosan with conventional sanitation systems in terms of financial and economic costs and benefits, in order to assist decision-makers and sponsors of development programs to make informed decisions about relative merits of different types of sanitation. Based on two case study analysis, none of the currently implemented systems are seen to provide an obvious model for scaling up without considerable. external support.


Reference icon

SEI (Editor) (2008): Sanitation Now Money down the drain. Stockholm: Stockholm Environment Institute. URL [Accessed: 21.04.2012]. PDF

This special issue of "Sanitation Now", a magazine on the global sanitation crisis published by the Stockholm Environment Institute, focuses on the millions of dollars that are lost through the lack of sanitation - such as costs caused through polluted water, diarrhoea related diseases and deaths, and losses in tourist income. Its baseline is that poor sanitation equals more poverty and a stunted economic growth.


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SUSANA (Editor) (2010): Sanitation as a Business. (= SuSanA Factsheet). Sustainable Sanitation Alliance (SuSanA). URL [Accessed: 01.02.2011]. PDF

The fact sheet describes sanitation as a good business opportunity. The challenge is to find and identify effective, scalable, and sustainable sanitation solutions with economic attractiveness and allocate investments and funds to be able to implement the projects. This process needs to be guided by experts of marketers and designers and can effectively supported by the central and local governmental agencies and NGOs.


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THE WORLD BANK (Editor); WSP (Editor) (2013): What's a Toilet Worth?. Lack of Access to Sanitation Costs the World US$260 Billion Yearly. Washington: The World Bank, Water and Sanitation Program (wsp). URL [Accessed: 09.09.2013].

This graphic shows the costs of inadequate sanitation and economic benefits that could result from improved sanitation.


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UNESCO; UNESCO (Editor) (2015): The United Nations World Water Development Report 2015. Water for a Sustainable World. Paris: UNESCO. URL [Accessed: 23.11.2016]. PDF

Water resources, and the range of services they provide, underpin poverty reduction, economic growth and environmental sustainability. From food and energy security to human and environmental health, water contributes to improvements in social wellbeing and inclusive growth, affecting the livelihoods of billions. This report provides a summary on how water and related resources are managed in support of human well-being and ecosystem integrity in a robust economy.


Important Weblinks

http://www.washcost.info/ [Accessed: 15.06.2011]

WASHCost, a five-year initiative funded by the Bill and Melinda Gates Foundation, is focused on exploring and sharing an understanding of the true costs of sustainable services. Since 2008, WASHCost has developed new methodologies to better understand and use the costs of providing water, sanitation and hygiene services to rural and peri-urban communities in Ghana, Burkina-Faso, Mozambique and India (Andhra Pradesh).

http://www.who.int/ [Accessed: 05.10.2010]

This document contains various cost estimates for achieving the MDGs with different technologies related to improved water and sanitation.

www.wsp.org/economic-impacts-sanitation [Accessed: 01.11.2012]

The Economics of Sanitation Initiative (ESI) was launched in 2007 with a WSP study from East Asia, which sparked public awareness and Government action in several countries. ESI further analyzed the costs and the benefits of alternative sanitation interventions for various countries in Africa, East Asia and South Asia.