Financing Urban Sanitation in Africa: The Role of Sustainable Infrastructure Finance and Innovation


In May 2015, African Ministers responsible for sanitation and hygiene adopted the Ngor Declaration on Sanitation and Hygiene, undertaking to achieve universal access to adequate and equitable sanitation and hygiene services, and an end to open defaecation by 2030. Unfortunately, the current reality is far removed from this, with large areas of the continent, especially Central and Eastern Africa, struggling to provide adequate sanitation services to more than half of their urban population.

Of all urban services, sanitation is notoriously difficult to fund and finance in African cities. Whereas most urban dwellers aspire to have flush toilets and access to sewers, the majority of urban Africa does not have this privilege. A majority rely on on-site sanitation comprising latrines and septic tanks or have no access to adequate sanitation. A significant lack of data in tracking sanitation progress in African countries makes it difficult to determine sanitation situations.

Section 2 of this paper provides context to understanding urban sanitation. While the number of African people with adequate sanitation is on the rise, this progress is not keeping pace with urbanisation trends. Small and medium towns tend to have worse coverage than larger cities, as well as more challenging institutional contexts. In larger cities, the spatial, societal and political contexts in which informal settlements flourish pose specific challenges to a service that is extremely sensitive to developments in each. Sanitation is positioned as a subset of a broader sector, known in development circles as the water, sanitation and hygiene sector. Despite institutionally being an appendage of water institutions, sanitation is a cross-cutting issue spanning across areas of public health, education, social welfare, urban planning and the environment, and an issue in gender-related matters. Recognising that sewerage, being the aspiration of many, is not always appropriate, the goals of the United Nations for sanitation only refer to “safely managed sanitation” (United Nations, 2017:6). To achieve this requires not only access to an acceptable toilet or other sanitation facility, but also that the waste is disposed of or recycled safely. The advent of the Sustainable Development Goals of the United Nations in 2015 emphasises how sanitation chains could be developed to achieve this, stressing the importance of a systems approach and the validity of a diverse range of technological options.

In Africa, estimates suggest that far more than half of the human waste generated in cities reach the environment untreated. In a recent report by the World Resources Institute, 15 cities across the Global South were under study, including five cities in Africa. This suggests that since 2019, more than 50% of urban residents in these cities lacked access to safely managed sanitation (Satterthwaite et al., 2019). The toll this imposes is significant, with the African Union agreeing that “poor sanitation discourages investment and economic development, undermines tourism, and damages the natural environment and the water resources that support human life” (AMCOW, 2021:3).

Section 3 explores how this plays out across the sanitation chain. In sub-Saharan Africa, 65%-100% of sanitation access in urban areas is provided through on-site technologies, rather than through large-scale networked systems. The service chain for sanitation can be complicated, particularly when viewed through a financing lens. In contrast to sewerage networks, which are generally provided by water and sanitation utility companies, large parts of the off-site economy are often the preserve of informal providers.

In recent years, hybrid approaches to providing sanitation have increasingly become the recognised way of conducting business, whether by multinational donors or international non-governmental organisations. In 2021, the African Union officially adopted an approach called City-Wide Inclusive Sanitation, adding another approach to this list. The new paradigm is based on the recognition that the traditional, formal means of providing sanitation, in other words, sewers and wastewater treatment plants, is not reaching the majority of urban dwellers in Africa. City-Wide Inclusive Sanitation is, therefore, aimed at combining centralised networked infrastructure with approaches that embrace and transform existing, often informal, decentralised approaches to providing sanitation.

In doing so, authorities responsible for sanitation need to support various components of the sanitation value chain, spanning the capture, collection and containment, emptying and transport, and treatment and reuse of waste. This means integrating specialised pit-emptying services alongside utility provision approaches to wastewater treatment and sewerage provision. It means addressing many urban latrines being the preserve of informal emptiers or direct draining to the environment. It further means balancing incentives and sanctions in order to see more waste treated adequately before being released into the urban environment. As urban populations grow and surface, waters become more polluted, with the challenge of groundwater contamination becoming more troublesome. As an example, groundwater in most large African cities, for example, Dakar, Abidjan, Lomé, Lagos and Dar es Salaam, is contaminated with human waste and is highly polluted.

Section 4 of this paper presents the challenge of financing sustainable sanitation. By exploring three diverse entry points, insights into the broader financing situation are possible. The starting point is one of a disabling environment, exacerbated by fragmented responsibilities and unclear opportunities. This makes financing urban sanitation more complex than financing water supply, despite the economic and social returns of doing so being estimated to be more than double (Hutton, 2013).Across Africa, households fund most sanitation expenditure. In poorer African countries, donor commitments cover a significant minority. Unfortunately, subsidies into the sector are overwhelmingly captured by the better-off, with findings in a recent study suggesting a mere 6% of these reaching the poorest quintile (Andres et al., 2019).

One approach that is gaining traction is to use microfinance, revolving funds and similar financial mechanisms to support households in order for them to deal with the full costs of providing safely managed sanitation. Left to their own devices, households are reluctant to cover the costs of treatment and safe disposal, leading to corners being cut and the environment suffering. Carefully designed programmes to address this problem, as initiated in Ghana, Vietnam and Bolivia, can support the protection of the public well without crowding out private investment or dissuading household expenditure. One of the primary challenges of sanitation is to increase demand, whether within communities or among local politicians. Investing in shared facilities can spur such demand and support broader community initiatives on sanitation and hygiene, as has been shown in Mozambique and Ethiopia, among other countries. Such facilities can support underserved communities to move away from open defaecation and provide a valuable lifeline to those who do not have access at household level.

Traditional wastewater treatment plants face a range of challenges across urban Africa with regards to treating waste. A lack of capacity to run systems or source spare parts is often problematic. Small-scale decentralised systems for treating wastewater can overcome a number of these challenges, providing a “viable alternative to conventional systems for contexts such as large residential buildings, compounds, peri-urban areas, communities and small rural settlements” (Reymond et al., 2020:2). Such systems can offer an important point of difference for would-be financiers, for instance, the ability to work through one or two national suppliers, rather than dealing with a fragmented local government context. In lessons learnt from Asia, successful scaling up entails more than replicating a large number of discrete projects; it also requires attention to management and governance arrangements.

In terms of policy direction, which is addressed in the final section of this paper, guidance is offered on how and why local political will should be built around sanitation improvements, especially for poor urban settlements. A case in point concerns building a strong business case, which is notably easier when not only the various co-benefits can be identified, but also if they can be quantified and monetised, for which the environmental sector offers several global lessons. Integrating sanitation in broader initiatives, such as slum upgrading, can also be helpful, while localised investment in shared sanitation can promote a virtuous circle. Circular economy approaches, while attention-grabbing, likely need additional support to become scalable. They also need to be adapted to the context of small- and medium-sized settlements where the bulk of African urban growth is forecast. These smaller conurbations may present specific challenges, tied to institutional capacity or mandates, for instance, but also new opportunities partly linked to local political dynamics and spatial development patterns.