June 2021

Can Branded Kiosks Improve Revenue Collection at Water Points in Ghana

Summary

  • In Ghana, most water point revenues are consistently below their estimated potential because vendors do not fully enforce pay-as-you-fetch tariffs. Low revenue collection undermines the ability of water systems to cover all maintenance and operating expenses.
  • Aquaya evaluated whether installing branded kiosks at rural water points could increase revenue collection. The kiosk displayed the logo of the local government or District Assembly along with a “Pay-As-You-Fetch” inscription and included shelf space for the vendor to sell petty goods. Vendors received a seed grant to stock petty goods as well as a one-day training on financial record keeping.
  • In the five months following kiosk installation, daily water point revenues increased by a median of 51% or 1.1 GHS (0.2 USD). We found that these revenue increases were driven by the kiosk’s formal District Assembly branding, which gave vendors more authority to enforce tariffs.
  • Revenue increases were very variable across sites, indicating that this intervention is not equally effective in all settings. We identified two sets of favorable conditions that we recommend implementers to prioritize for future kiosk installations depending on site characteristics.

Context

In Asutifi North district, Ghana, approximately 57% of the population (35,000) is served by a communal handpump, standpipe, or limited mechanized borehole. These water points are usually attended by a vendor reporting to a Water and Sanitation Management Team (WSMT). The vendor is responsible for collecting tariffs from consumers and transferring the proceeds to the WSMT. The vendor retains a 20%-35% commission on water sales, depending on the agreement with the WSMT. WSMTs deposit the funds in dedicated bank accounts and maintain paper-based financial records. They are accountable to the District Assembly, the legal owner of public water infrastructure according to Act 462 – Local Government Act,1993/Act 936 – Local Governance Act, 2016. Although these “Pay As-You-Fetch” tariffs are established and formally mandated by the local government, they are rarely enforced. 

Research conducted by The Aquaya Institute (Aquaya) in 2018 found that water point revenues were consistently below their estimated potential. After examining revenue records from 60 standpipes across the four public piped systems in the district, we concluded that they were earning 40%-84% less than would be expected if tariffs were enforced. Revenue collection was even more sporadic at handpumps and mechanized boreholes: only 22% (11/51) had pay-as-you-fetch tariffs in place, while the rest never collected payments or only after breakdowns. Among those handpumps or mechanized boreholes collecting some form of payment, actual revenue was on average only one-fifth of what it would be if tariffs were enforced. 

Low revenue collection undermines the ability of water systems to cover all maintenance and operating expenses. For example, we estimated that three out of the four piped systems would struggle to support the cost of an unexpected major repair (>2,500 GHS or 430 USD). Most communities, therefore, rely on financial support from the District Assembly when their water system breaks down. Additionally, none of the public water systems conducted water quality testing at the frequencies specified by national regulations and none performed water treatment. 

Research Objective

Aquaya’s research intended to address the following policy question:
How can public water points in rural Ghana increase their revenue collection?

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