January 2022

New Project: Estimating the Benefits of Sanergy Services in Kisumu, Kenya.

There are large gaps between low-income household demand and the market costs of high-quality sanitation products and services.

The Problem

Sanergy is currently expanding its container-based sanitation (CBS) services into Kisumu, Kenya. In February 2021, the Aquaya Institute conducted a survey of potential customers in Nyalenda, Kisumu to estimate demand and inform pricing structures for Sanergy’s Fresh Life and Fresh Fit Toilets. For the Fresh Life toilets, we found that willingness-to-pay (WTP) was somewhat comparable to Sanergy’s current monthly fee of 950 KES, with a median of 850 KES for landlords and 500 for homeowners. However, this contribution is only about 10% of Sanergy’s estimated operating costs for services (approximately 8,000 KES). These findings are in line with Aquaya’s previous willingness to pay work in Tanzania and Kenya which demonstrated that there are large gaps between low-income household demand and the market costs of high-quality sanitation products and services.

In a previous study, we estimated the financial requirements for achieving universal access to safely managed sanitation by 2030 in Kisumu, to bridge the gap between willingness-to-pay and costs. Depending on the exact mix of sanitation technologies, we estimated financial requirements to be 19 70 million USD for Kisumu, though this study was not specifically focused on Sanergy’s products and services. While this may seem like substantial government investment, it should take into consideration the corresponding benefits to households and communities.

The benefits to households and communities may not be fully captured in the household willingness-to-pay data. Household willingness-to-pay may not consider the positive externalities, specifically a healthier and cleaner environment, that are associated with increased community-level usage of improved sanitation facilities. Furthermore, those positive externalities also confer benefits to non-users within the broader community who would also benefit from improved health and a cleaner environment. Therefore, a more holistic approach with multiple data sources is required to estimate the benefits of high-quality sanitation.

Research assistant Denish Owiti interviewing a Sanergy customer in Nyalenda, Kisumu to understand the costs and benefits of Sanergy products [Fresh life toilet] and services. 

Objectives

Previous efforts have compared the benefits and costs of sanitation interventions in a quantitative benefits-costs analysis. This analysis will provide benefit-cost ratios, which can inform:

  1. Whether the benefits exceed costs
  2. How benefit-cost ratios vary with Sanergy’s market penetration (i.e., the proportion of the population accessing Sanergy products and services)
  3. How benefit-cost ratios may change with the increasing populations

We will disaggregate the benefits by direct benefits (i.e., cost-savings for the household) and indirect benefits (i.e., cost-savings for the government).

The aim of this study is to provide benefit-cost evidence on sanitation solutions for government decision-makers in Kisumu.

This study aims to answer the following questions:

  1. How do benefits and costs compare for Sanergy products and services in Kisumu? What is the benefit-cost ratio, and how does this ratio compare with those of other sanitation solutions?
  2. How does the benefit-cost ratio vary with Sanergy’s market penetration?
  3. How might benefit-cost ratios change with increasing populations?

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