Investing in the Future: Financing WASH infrastructure to advance Kenya’s economy

With its market-based economy, favourable geographical situation and liberal foreign trade policy, Kenya is widely regarded as a country with great potential in becoming a regional trade and finance hub. In the East Africa region, Ethiopia outperforms Kenya in Gross Domestic Product (GDP) and Foreign Direct Investment (FDI), sitting at US$96.108 billion (GDP, 2019) and US$3.5billion (FDI, 2018) versus Kenya’s US$95.503 billion (GDP, 2019) and US1.626 billion (FDI, 2018).

Despite decelerated GDP growth in 2019 versus 2018, the World Bank had predicted positive growth for Kenya into 2020 and beyond, underpinned by the country’s Vision 2030 long-term development plan which outlines four main focus areas: manufacturing, universal healthcare, affordable housing and food security. However, now facing a dual public health and economic crisis fuelled by the covid-19 outbreak, progress is less certain.

Countries aiming to strengthen their economies will tend to foster wealth equality – an area which is distinctly lacking in Kenya. The factors behind this are numerous, including access to quality education, healthcare and financing, but the fundamental area that could see the greatest acceleration is access to clean water, basic sanitation and hygiene (WASH) services and the benefits these things bring.

Benefits of Investments in WASH

Although Kenya’s GDP per capita is the highest in the region (US$1,816.547 in 2019), the wealth disparity across the country is huge and unevenly distributed across urban and rural areas. In light of Kenya’s rapid population increase and urban development in recent years, safe and clean water supply has fallen far behind demand even in the country’s urban areas. Even Nairobi experienced an approximately 25% shortfall in supply in 2019, according to NCWSC, the city’s water provider. Logistics infrastructure also remains a challenge, although Kenya’s 2020/21 budget allocates a large portion of spend to this area.

The case for safe drinking water and sanitation as a basic human right is enough to warrant focus and investment. The CDC lists diarrheal disease as the most significant cause of death in Kenya, followed by HIV/AIDS and TB. Cholera is also a pervasive threat with control and prevention lying primarily in improved WASH practices. Meanwhile, the 2019 WASH joint monitoring programme report by The World Health Organization and UNICEF found that only 59% of Kenyans have access to basic water services and only 29% have access to sanitary services.

Less explored than the humanitarian perspective is the economic impact of WASH service provision as a result of lower morbidity, higher productivity, and increased access to education.

The disease associated with lack of access to WASH services prevents adults from earning a living or fulfilling their professional endeavours. Not only could access to WASH give adults, particularly women, the time to do more productive activities by being less inhibited by illness, but the establishment and maintenance of WASH services would also create associated employment in rural communities.

The 2005 briefing and hearing on “Evaluating U.S. Strategies to Enhance Access to Safe Water and Sanitation before the Committee on International Relations House of Representatives” heard that the economic benefits of investments into water and sanitation far outweigh the costs. The prepared statement of Olav Kjorven, Director of the Energy and Environment Group, Bureau for Development Policy, United Nations Development Program, read: “Analyses indicate that a 0.3% increase in investments in household access to safe water is associated with a 1% increase in GDP. Furthermore, poor countries such as Kenya, Cambodia, or Uganda with improved access to clean water and sanitation services have shown an annual average growth of 3.7%, whereas countries with the same per capita income but without improved access had an average annual per capita GDP growth of only 0.1%.”

It therefore follows that increasing improvement to WASH services will continue to underpin GDP growth.

A case for Kenya

For Kenya’s continued growth and urban expansion, it is clear that investment into WASH provision will be crucial as many of the country’s goals rely on a healthy and productive population. Kenya achieved 100% primary school enrolment in 2016, which has been upheld ever since. Crucially, however, enrolment is not an indicator of time spent productively in school – an area which could be greatly improved with proper WASH services. With fewer impediments to learning, including illness from unclean water and poorly managed toilet facilities (or none at all), children are able to devote more time to learning. With this education, individuals have an increased chance of escaping poverty and are also empowered to make larger economic contributions.

Safely managed water, sanitation, and hygiene (WASH) services are an essential part of preventing and protecting human health during infectious disease outbreaks, including the current covid-19 pandemic.

From a health perspective, the recent pandemic prioritizes sanitation in developing countries as a top priority, in light of the well-publicised global emphasis on hand washing as a main defence against virus spread. Aside from the philanthropic drive to curb disease spread, the cost burden of a health crisis is extremely significant and can set countries back in their growth. For instance, the 2014 Ebola outbreak cost economies an estimated US$53 billion, affecting primarily Sierra Leone, Guinea and Liberia, while the 2013 SARS outbreak cost an estimated US$40 billion. Proper investment into WASH services is therefore likely to cut the costs back in the longer term.

Kenya’s outlook

Despite global recognition of the importance of WASH service access, progress in Kenya has been slow. The national focus has been low relative to the broad-reaching positive outcomes, while foreign aid, although substantial, has also failed to deliver anywhere near the proportional impact. While water and sanitation do already feature in Kenya’s Vision 2030, the area is markedly underrepresented considering its importance as a linchpin in many other objectives across its economic and social pillars.

The primary goal of the blueprint, launched in 2008, is to accelerate Kenya’s transformation into “a newly-industrialising, middle income country providing a high quality of life to all its citizens in a clean and secure environment”. The striking lack of emphasis on WASH services in Kenya’s budget allocations, however, shows a disconnect between these aims and the necessity of WASH provision and vast benefits stimulated in public health, gender equity, poverty reduction and economic growth.

In its budget highlights for 2020 – 2021, Kenya has allocated just under US$970.5 million to “Environment Protection, Water and Natural Resources” and just over US$53.8 million to “Improving Environment, Water and Sanitation” – areas which include flood control management and wildlife conservation. While the highlighted allocations are not exhaustive, this cumulative sum pales in comparison to USAID’s estimate of the US$12.9 billion total investment needed to reach Kenya’s 2030 universal WASH access target. USAID does however estimate the current available government budget for water and sanitation as US$5.6 billion – nevertheless still a US$7.3 billion gap to be closed.

Foreign aid might be the next port of call, except Kenya has been a recipient of substantial overseas funding for some time. Contrary to what the country’s current situation might suggest, Kenya’s poverty and (associated) health challenges have garnered significant attention from overseas. In 2018, Kenya received US$2.488 billion net official development assistance and aid according to World Bank data. U.S. aid alone sat at US$635 million, with US$56 million towards basic health and US$12 million marked out for water and sanitation specifically.

However, despite relatively high levels of inflow, progress in WASH access has been slow – the severe disconnect between funding and impact clearly points to a poor investment approach, which the government has so far failed to effectively grapple with.

Effective WASH Management

In 2006, the Government of Kenya released a National Water Development report, which claimed mismanagement of Kenya’s water resources through unsustainable water and land use policies, laws and institutions, weak water allocation practices, growing pollution, and increasing degradation of rivers, lakes, wetlands, aquifers and their catchments. Safe water provision has been a focus of government plans for decades, even with a target set in the 1970s for safe water provision to all households by the year 2000. Despite certain measures, including the National Water Conservation and Pipeline Corporation (NWCPC) which manage piped water systems in urban and rural areas, it quickly became clear that the target would not be met. As Kenya’s population continues to grow rapidly, the supply problem has been exacerbated with no effective management system yet in place to span rural and urban settings.

Over time, however, a move towards a more devolved system has brought promise. In 2010, the Constitution of Kenya replaced the 1963 Independence Constitution, introducing the devolution of water services to the county level. In 2013, 47 county governments with affiliated county water ministries were established. The area that remains the greatest challenge is public participation, a core component to the success of this governance structure, and the bedrock of the 2010 constitution.

However, the ability for local populations to effectively exercise the right to participate relies on education and the setting of better precedents – areas that have never been addressed by the government.

With the combined lack of warranted emphasis and historically disproportionately low translation of funding into proportional impact, Kenya seems unlikely to deliver its objectives without significant intervention in the development of its WASH services. Better management of resources and more inclusive, sustainable approaches are crucial in narrowing the gap between supply and demand of WASH services to support a healthy, empowered population, driving positive impact across the board.

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