Study for financial and economic analysis of ecological sanitation in Sub-Saharan Africa

Schuen, R. and Parkinson, J. (2009). Study for financial and economic analysis of ecological sanitation in Sub-Saharan Africa. Nairobi, Kenya, Water and Sanitation Program-Africa. xi, 32 p. : 14 fig., 9 tab.

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This study on financial and economic analysis of ecological sanitation (ecosan) in Sub-Saharan Africa focuses on a comparison of sanitation technologies suitable for urban settlements.

It compares ecosan with conventional sanitation systems in terms of financial and economic costs and benefits based. An analytical framework and a computer model were developed to assess and compare different technologies in terms of financial and economic Net Present Value (NPV).

The economic benefits derived from improved sanitation include health and environmental benefits, as well as those which are associated to excreta reuse.

The study is based on three case studies, which all promoted Urine Diverting Dry Toilets (UDDTs):

• Kabale, Uganda
• eThekwini, South Africa
• Ouagadougou, Burkina Faso

The economic and financial performance of these projects is compared with traditional sanitation technologies such as ventilated improved pits (VIPs) and sewerage. The model uses capital expenditure (CAPEX) and operational expenditure (OPEX) data, assigned to different elements of a sanitation system. These include costs for both hardware, such as the cost of the latrine itself and software, which includes all promotional, training and other capacity building activities.

The results show that operational and maintenance costs determine the financial performance (in terms of NPV) from a household perspective in situations where latrines are heavily subsidized. However, when subsidies are removed and overall project costs are taken into account, the picture changes remarkably, as the capital costs become the most critical factor which influences the financial performance of each option.

By reusing excreta, households with ecosan toilets can generate monetary benefits and increased crop production can have a positive impact on them financially. The key factors influencing the viability of ecosan in urban environment are the amount of land available, and the agricultural conditions.

The results indicate that the benefits from crop production can offset the higher capital and operational costs, but the benefits may not be sufficient to cover additional costs required for implementing ecosan.

The study also points towards the need to reuse excreta as close to the point of generation as possible, whilst keeping the costs of installation down. Where this is not viable, a communal excreta reuse system becomes economically attractive, provided the project management and capacity building costs associated with the promotion of ecosan can be lowered.

Based on the case study analysis, none of the currently implemented systems are seen to provide an obvious model for scaling up without considerable external support. Much research is still required to assess the costs of marketing ecosan compared with conventional sanitation, and to assess the costs of different management arrangements. A communal excreta management system such as that in Burkina Faso may overcome some of these constraints, and is more appropriate in denser urban environments.

There is need to look in more detail, at the different management arrangements and costs for setting up and operating house-to-house collection services. There may also be ways of introducing more cost effective technologies to enhance the efficiency of the operation.