The government need to mobilise GH¢485 million to finance about 970,559 households who require some form of financing to own household latrines.
This is based on the assumption that a basic improved latrine will cost GH¢500 per household.
Research by a Ghanaian consulting firm, CDC Consult and presented at the National Basic Sanitation Forum in July indicated that 1.21 million households, forming 19.3 per cent of households in Ghana were without toilets.
The research indicated that 80 per cent of the households interviewed could not afford a toilet facility without financial support because the average annual income of these households was GH¢3,787.
Need for financing
It emerged from the sanitation market assessment conducted by the CDC Consult that almost half of Ghana’s population remained without access to basic financial services, particularly in rural areas.
As a result, if the financing challenge was not addressed, most households would not have access to safe, improved and durable household toilets and the fight to achieve Open Defecation Free (ODF) status may never be fully realised, the report suggested.
Such households required access to regular use of a range of formal and informal financial services including savings, credit remittances and other community based financing schemes which meet their need and are affordable for the acquisition and maintenance of improved, durable and safe toilets.
Assessment of sanitation financing in Ghana
Sanitation financing with a focus on household and community latrine provision has received attention over the years through various initiatives by the government and its development partners.
The National Environmental Sanitation Strategy and Action Plan (NESSAP), which started in 2010 and ended in 2015, recognised the need for sustainable financing and cost recovery strategies, as well as the provision of appropriate incentives that gives investor-confidence to induce injection of capital by the private sector in improving services such as provision of public toilets, refuse collection, cesspit-emptying vehicles, construction of treatment and disposal facilities.
However, a Strategic Environmental Sanitation Investment Plan (SESIP) also started in 2010 and ended in 2015. It is described as the document that made the first attempt at providing a financing plan for environmental sanitation services in Ghana.
As part of strategies for financing the various implementation packages captured in the plan, the document proposed the Establishment of Revolving Fund specifically for the provision of household toilets. This was in response to the NESSAP target of delivering the equivalent of 50,000 household toilets per annum from 2011 to 2015 nationwide.
In the area of financing toilets for households, the Rural Sanitation Model and Strategy (RSMS) had what may be described as three levels of financing proposals.
The first proposal envisages the Ministry of Local Government and Rural development (MLGRD) seeking cabinet’s approval to allocate two per cent of the District Assemblies Common Fund for sanitation promotion.
The second proposal is based on the financing strategies proposed in the SESIP (also based on NESSAP) which requires the MLGRD to establish a revolving fund for sanitation promotion. Third, communities will be encouraged to use their own systems of mutual savings.
Framework for financing
Four main types of financing facilities have been outlined and adopted by stakeholders to serve as the vehicle through which Ghana will achieve ODF status.
The national sanitation fund will be a pool of funds that provides capital for establishment of a revolving fund for financial institutions that are interested in lending to households and artisans and serve as source for funding a proposed social fund targeted at qualifying poor and venerable households.
Community ODF account are specialised financing facilities created at the community level to support sanitation financing and MFI products developed by microfinance business targeted at sanitation financing.
Financing the poor
In financing the poor and vulnerable, the research report suggests that there is need to adopt the use of results based financing supported by the community and district assembly.
Source : Graphic Online
