Water and Sanitation Investments Create Jobs

Editors Note: How can we assess the impact of a WASH investment? In this post, Guy Norman, Head of Evaluation, Research and Learning at Water & Sanitation for the Urban Poor (WSUP), gives us a snapshot of the findings from their recent pilot analysis of the impact of WSUP’s work in Madagascar.

Providing improved water, sanitation and hygiene (WASH) services to a community doesn’t just have an impact on health, it can be expected to have multiple positive impacts, including creation of livelihoods. For a slum-dweller, employment and a steady income are life-changing things! And jobs created are likely to have a ripple effect in the local economy—more jobs mean more money circulating around the community.

But assessing the total impacts of a WASH investment by an organisation like Water & Sanitation for the Urban Poor (WSUP) is far from straightforward. For example, we would expect an improved water supply to have positive impacts on a wide range of things including health, livelihoods, time required to collect water, local environmental quality, the water utility’s revenues, and indeed the national economy. What’s more, a given investment may also have negative impacts; for example, an improved water kiosk may reduce the profits of an existing water supplier. So any assessment of total impact needs to consider a wide range of potential impacts, and needs to “subtract” possible negative impacts from the positive impacts.

Moving towards achieving this, WSUP has recently contracted PricewaterhouseCoopers (PwC) to pilot their Total Impact Measurement and Management (TIMM) framework in Antananarivo, the capital of Madagascar. TIMM is a framework for doing precisely this type of analysis.

More detailed findings of this pilot analysis will be published soon, and this blog gives a “sneak peek” at findings around the impact of WSUP’s work in Antananarivo on employment.

The Antananarivo pilot of the TIMM approach

The pilot focused on a subset of WSUP’s activities in Antananarivo over the period 2012−2015:

1. Water kiosks and laundry blocks: support for construction, including creation of management arrangements;

2. Setting up small community-based organisations (known as RF2s) for street cleaning and drain clearance;

3. Helping the water utility (JIRAMA) reduce its levels of non-revenue water (NRW) (i.e. water for which no payment is received, either because it physically leaks from pipes or because it’s supplied but not paid for, as a result of inefficient billing for example)

Very briefly, the TIMM approach, as applied here, involved first generating a model of the impact pathways. This included many boxes and arrows (WSUP investments in boxes on the left, outcomes in boxes on the right, many intermediate boxes in the middle, and lots of “causality” arrows linking everything together). Data to “calculate” the model comprised existing WSUP data on project outcomes, including householder survey data, some limited additional data collection, and international data derived from a literature review.

Overall findings

The estimated net impacts of WSUP’s investments in the three activities indicated above are shown in the wheel schematic below. Each impact has been converted to a monetised value, but this in no sense implies that people’s lives are just about profit and loss! Rather, an analysis of this type requires a common unit of measurement of different types of impact, and a convenient unit is U.S. dollars. Note the dramatic health impacts (interesting, because previous analyses of this type have often suggested that WASH interventions have more of an impact on time savings than they do on health). Note also some negative impacts in terms of greenhouse gas emissions (garbage rotting on the streets produces less methane than garbage in a landfill). But as noted at the end of this blog, we ask you to take these results as preliminary; these findings may be a good indication of reality, but PwC, WSUP and others are still assessing to what extent we can consider these results to be accurate.

TIMM-consolidated-results-across-kiosks-RF2s-and-NRW-(2)

Job creation findings

WSUP-supported water kiosks and laundry blocks need builders to construct them and attendants to staff them; both also provide self-employment opportunities for laundry washers (almost exclusively women). The TIMM analysis indicated that kiosks and laundry blocks not only generate direct employment, but also create work opportunities for suppliers; much of this money is then spent in the local community on goods and services, supporting more jobs. The construction sector gets a demand boost, and the new connections between kiosks and the water network also increases profits and wages for those working at the water utility. Water resellers, who buy water in bulk from WSUP’s kiosks and then sell it door-to-door at a mark-up, are estimated to now have an annual income of around 300,000-480,000 Malagasy ariary.

RF2 teams sweep the streets and empty bins, and each team employs around eight people. These are self-sustaining organisations financed by user tariffs and local government support. The RF2 impact on livelihoods is estimated at almost US $1.5 million, and the spending of those wages generates an additional US $0.4 million of indirect economic benefit.

In order to help the water utility to reduce its level of non-revenue water, WSUP provided the initial funds for a team dedicated to NRW reduction and technical training. Not only did this create jobs within the utility, but the wages that they were paid are projected to have had wider economic effects within the city. WSUP’s work with the water utility led to an estimated increase in profits and wages of US $2 million, with wider economic benefits totalling approximately US $157,000.

The TIMM results show that livelihood impacts make up more than 13% of the total net impact of the WSUP projects analysed. This should have long-term positive effects; the total livelihoods impact for women and men across all interventions from 2013 to 2025 is worth approximately US $3.6 million and US $2.3 million, respectively. Laundry workers (who are 95% female) are the highest earners, and are projected to generate US $2.8 million in additional earnings by 2025.

Particular impacts on women’s livelihoods

Madagascar ranks somewhere in the middle of the global Social Institutions & Gender Index, and while women make up nearly half of the work force they are paid less and hold a lower proportion of skilled and managerial jobs compared to men.

This TIMM analysis indicates that about 70% of the total earnings from WSUP water kiosks and laundry blocks go to women. Each laundry washer earns an estimated 8,000 Malagasy ariary per day (around $490 per year), which is about three times more than before the laundry blocks were built. More earnings for women is socially relevant as women are more likely to invest their earnings in education, nutrition, and health than men.

And finally, a cautionary note

This has been a pilot application of the TIMM approach, based on careful analysis of likely impact pathways, careful collation of relevant data, and reasoned assumptions about likely magnitudes of effect along each of the impact pathways that we examined. But this is complex modelling, the input data is certainly not perfect, and the assumptions about magnitudes of effect are just that, best-estimate assumptions. Modelling of this type can generate very useful information for an organisation like WSUP, but at this stage the jury is still out on whether the current results are sufficiently reliable, and whether the data collection requirements for this type of analysis are manageable. We’ll be releasing more detailed publications soon, so if you’re interested please watch out for them.

Thanks to the PwC team led by Tom Beagent for this excellent work and to WSUP’s Rosie Renouf for help with the analysis underlying this blog, as well as to WSUP’s supporters DFID, TCCAF, and the Stone Family Foundation for their role in this project.