One of the big misconceptions out there is that the urban poor cannot or will not pay for their water. This is one of the reasons mandated service providers are often reluctant to expand operations into informal settlements.
Nairobi City Water and Sewerage Company (NCWSC) charges 18KSh per cubic metre, if consumption is up to 10 cubic metres of water per month (the prices rise for higher usage). However, as previously noted, it is unaffordable for most informal residents to get connected, hence they rely on informal vendors.
The vendors typically charge 3-5KSh** for a 20 litre jerry-can (bright yellow container used for carrying water) in Kibera (other areas may be cheaper), meaning the cost can be 150-250KSh for a cubic metre. This price can skyrocket up to 20KSh per jerry-can in times of shortage. In other words, the poor are paying, perhaps 8-14x as much as those with a formal connection – with peak rates at around 50x as much. Some spend 20% of income on water* (against a UN recommendation of up to 5%), and it may in cases be comparable to or even more than rent.
Persuading water companies that there is a commercial, as well as social, imperative in reaching into slum areas can be a challenge, however. Due to high NRW, there are high losses when supplying such areas. If they could bill everyone who receives water that originates from them, though, gains would be very possible – at the same time as reducing the very high costs for users – thus enabling them to access more better quality water.
And this is where we come in as ACF – bringing innovative solutions that enable the water company to receive revenue from almost all of the water entering an informal settlement (some losses are inevitable), which results in improved service at reduced costs for the residents. One such solution is the model from Kampala described here – we are currently implementing something similar in Nakuru, Kenya – our newest project area.
*Data again is from this paper. Water prices are based on experience and are variable.
**At the time of writing there are 84 Kenya Shillings to the US dollar, or 140 to the pound sterling. This means that a cubic metre of water costs a Kiberean £1.10-1.80 at the best of times – but possibly up to around £7. Based on a trawl of a few water companies, if you’re in the UK, you probably spend around £1.20-1.70.