Possibilities and pitfalls of community-based financing of water supplies in rural Kenya

Dr Tim Foster sheds lights on three decades of water payment records from Kwale County.

The national water policies of most African countries stipulate that rural communities are responsible for covering their water supply operation and maintenance costs. However, emerging data from large-scale waterpoint inventories reveal a considerable gap between the policies on paper and reality on the ground.

Of the 90,000 handpumps installed on wells and boreholes in Sierra Leone, Liberia, Uganda and Tanzania, fewer than half are accompanied by any form of revenue collection system. The operational implications of this situation are plain to see, with hundreds of thousands of waterpoints across rural Africa in a state of disrepair.

To better understand the drivers and dynamics of rural waterpoint financial flows, our team of researchers, from the Smith School of Enterprise and the Environment, studied Kenya’s Kwale County, a region that bore witness to one of the first large-scale hand pump deployments in Africa.

In 2013, we assembled an inventory of handpumps located in the coastal regions of Kwale as part of a wide-ranging study into rural water service sustainability. As is the case in many other regions of rural Africa, a high proportion of the waterpoints identified were non-functional (42%) and breakdowns were lengthy (average of 1 month).

Of the 518 communal handpumps located, around half were coupled with a system for collecting regular fees. There was an even split between those levying a flat monthly fee and those collecting a volumetric ‘pay-as-you-fetch’ tariff based on the quantity of water consumed.

As we delved deeper into the financial aspects of handpump water supplies in Kwale, it became apparent that a sizable number of communities maintained written records of user fee payments. Upon closer inspection, these records proved to be a treasure trove of information, with some documents stretching back to the mid-1980s.

All told, the records comprised more than 43,000 monthly fees payments, with revenue data spanning more than 270 water service years, and expenditure data covering 140 water service years.

This unique multi-decadal data set yielded a multitude of novel insights into the predictors and patterns of rural water supply financial flows, as well as the broader implications for the operational performance of waterpoints and water source choices of households. The investigation culminated in two papers – one published in the Journal of Rural Studies, and another in Water Resources Research.

Overall, we found that in the long-run, around 1 in 4 water users fail to pay their monthly fee each month, resulting in a shortfall of revenue. Late payment is also common: by the beginning of 2014, the payments received for water use in 2013 were about half what they should have been.

Multivariable regression analysis revealed that payment levels were associated with a number of social and environmental factors. Financial contribution rates tended to be higher when the water point was located close to households; when users considered the water palatable; when the water was put to productive use; and when there was little or no rainfall during the month.

The revenue collection approach adopted by communities also appeared to have a major bearing on financial and operational outcomes. Those collecting “pay-as-you-fetch” fees on a per bucket basis generated substantially more revenue than other approaches (e.g. monthly payments, ad hoc payments upon breakdown). This financial advantage also translated into significantly faster repair times when water points broke down.

The flipside was that “pay-as-you-fetch” payments also seemed to push a higher proportion of households towards use of unimproved drinking water sources. There were two likely reasons for these outcomes. First, free-riding is almost impossible under a “pay-as-you-fetch” model due to the requirement for pre-payments. Second, the average unit price for water under a “pay-as-fetch” arrangement was equivalent to US $1.30 per cubic metre – a rate that is more expensive than piped water in some urban areas of high-income countries.

These findings shine a spotlight on several conundrums facing policy makers and practitioners, particularly given the elevated ambition of the Sustainable Development Goal to achieve safe drinking water for all.

First, the data revealed great variation in the willingness and ability to pay for water, both within and between communities. Second, most of the factors linked with lower payment rates were characteristics which appear to be difficult to address (e.g groundwater quality, settlement patterns, rainfall). Third, the revenue collection system that leads to the most sustainable services also seems to have perverse impacts on the water source decisions of some households.

All of these observations point to a more fundamental question: can universal access to safe drinking water be achieved in rural Africa based on the current policy paradigm of community-based financing of operation and maintenance? An answer in the affirmative assumes rural water communities universally possess the willingness and wherewithal to cover the costs of operation and maintenance. The evidence from three decades of experience in Kwale shows that this assumption does not always hold.

About the author
Tim Foster is a Chancellor’s Postdoctoral Research Fellow at the University of Technology Sydney’s Institute for Sustainable Futures. His current research investigates the role of entrepreneurs and enterprise in rural water service delivery in Asia and Africa. He received his doctorate from the University of Oxford for research conducted at the Smith School of Enterprise and the Environment under the supervision of Dr Rob Hope, Director of the Smith School’s Water Programme.