A report by the World Health Organisation (WHO) revealed that access to safe water and sanitation is a major problem in Ethiopia. Water and sanitation coverage rates in the country are among the lowest in the world. Water Aid also has issued a report showing that 93 percent of the Ethiopian population lacks a safe toilet. Many are forced to defecate in the open and hence spread diseases like diarrhea. So people can access water and toilets without waiting for government funding, Water.org, founded by Gary White a water engineer and Matt Damon, a famous film actor started a project that connects people with bank and micro financial institutions so that people in developing countries can access loans, construct their own toilets and install pipelines. Ethiopia is one of the countries benefiting from this ambitious project. Capital’s Tesfaye Getnet sat down with Salfiso Kitabo, Country Director of Water.org to learn more about the sanitation challenge in Ethiopia and their project. Salfiso has been working in this sector for over 25 years. He was a country director for a Canadian organization before joining Water.org about two years ago. Excerpts.
Capital: What makes you focus on water and sanitation now and why do you think these are important topics for public discourse?
Salfiso Kitabo: A child dies somewhere in the world every two minutes from illness related to water and sanitation issues. According to recent reports, in Ethiopia, 23 children die each day (8,500 a year). No food shortage, no war, no other crisis kills children at this rate and speed. Why shouldn’t the world make this a priority? A report entitled: State of the World’s Toilets 2018 estimated that decent toilets at home for all in Ethiopia is not expected to occur until 2370. Water.org believes that solving the multiple problems related to the water and sanitation crisis is a priority and the way to break the cycle of poverty.
Access to safe water and sanitation protects and saves lives. Solving the water crisis makes a bright future possible for all. Access to safe water and sanitation has the power to turn time spent into time saved, when these are close and not hours away. Access to safe water can turn problems into potential, unlocking education, economic prosperity, and improved health. Every human being deserves to define their own future, and water makes that possible. This is why the issue is current, and it should be the issue for all concerned.
Capital: Water.org focuses only on Water and Sanitation projects in Ethiopia. Many NGO’s do not work on Water and Sanitation issues. What initiated your focus?
Salfiso: Water.org believes there isn’t and won’t be enough charity and public funding to end the water crisis. We believe there’s a smart way to end the water crisis. Millions of people around the world could get access to safe water in their homes with the help of small, affordable loans.
The private sector should become involved. Let’s make the Water and Sanitation sector bankable. That’s where Water.org comes in. We are here to bring safe water and sanitation to Ethiopia through access to small, affordable loans. There is both a need and demand for these loans, because when people have access to safe water, they get time back to go to school, earn an income and take care of their family. It changes their world. The poor are already paying a lot to access water. Ethiopia needs charge the proper amount for accessing water. Water.org has provided it and has a measurable record of success for more than 25 years.
Capital: Water management in urban areas is complicated, particularly in developing countries. Why is this so?
Salfiso: Water management is complicated because we do not understand the value of Water. We do not understand and prioritize it. We do not realize that the wording and expectations for delivery in the water and sanitation sector is changing. There is already a move from “reduce by half” to “universal access”, a move from “improved” to “safely-managed”. The expectations and the wordings are ambitious. We plan to move everyone from the current few figures to 100? Can we get that? No. Not knowing these facts are among the main reasons for mismanaging the water sector.
Capital: What is required to improve access to drinking water and sanitation for peri-urban areas and secondary centers, what would make it possible to better fight against poverty? What needs to change?
Salfiso: The most important thing for change is stopping confusion. Clarity in the role and responsibility gets us to success in services delivery half-way. Government and development partners should work towards creating clarity in the roles and responsibilities of each stakeholder. Some Institutions are preserving the problem to which they are the solution. Most are externalizing the problems created. This does not help. This must change. Depending on pubic funding and Charities for Water and Sanitation should change and change now. The water supply and sanitation (WSS) sector in Ethiopia requires fresh thinking and bold approaches to accelerate progress toward full access.
Capital: Goal 6 of the United Nations Sustainable Development Goals (SDGs) in 2030 states “Ensure water and sanitation for all.” How is Water.Org helping Ethiopia meet the 2030 goal?
Salfiso: Water.org Globally has already reached 13 Million people by mobilizing USD one billion in capital from private banks and Micro Finance Institutions (MFI’s). This is an unthinkable source of funding for the sector. Which donor or public funding could avail this amount through a single initiator like Water.org? In Ethiopia in just less than a year three private MFI’s (Metemamen, Vision Fund and SFPI) were able to give out loans totaling 18,613,654-birr that reached 22,423 individuals. The loan repayment rate is 99.9%. This is an unheard of amount in the land where supply of water is expected from the government or NGO’s. Anyone interested in seeing how all this works can visit Mojo, Boditi, Fiche etc.
Capital: Ethiopia is one of the poorest countries across the globe, can the poor build toilets or install pipelines for water by borrowing money from the bank?
Salfiso: My straight forward answer is a big YES. Why yes? Because it worked, we did it. MFI’s did it. As I said earlier, three private MFI’s alone (out of the 38 in the country) were able to mobilize 18,613,654 birr and reach 22,423 individuals. Water.org did a market assessment before starting the program in Ethiopia. We did prove there is a demand for loans to access safe water and sanitation sources. Five MFI’s namely, (Amhara Credit and Saving Institute (ACSI), Addis Ababa Credit and Saving Institute (ADCSI), Vision Fund, Metemamen and SFPI did their own independent market assessment. They all found out that there is a demand and ALL of them got approval from their board of directors to add WSS loans into their loan portfolio. Yes, the Water Credit model of Water.org works. One can only imagine if the entire 38 MFI’s and the 18 Banks got involved in this sector.
One thing we need to be clear about is that we are not talking about the very poor families or communities. We are talking a bout the better off poor who are already paying a lot of money to access clean water. All poor are not equally poor. I am saying this because some are at a higher level as well are saying we are putting the poor into debt. We are talking about the better off poor who have lined up for a hand out from the government and donors. The poorest of the poor can get subsidies from donors, NGO’s and the Government. Water.org is not against charity work. We are only saying let’s divide the poor into the better off poor and those who need subsidies and charity.
Capital: When it comes to funding and aid from Western countries, do you have any idea what the estimated aid amount is right now for sanitation related issues?
Salfiso: Annual aid for water and sanitation amounts to only USD 8 billion – far short of the USD one trillion needed to solve this crisis and maintain access long term. Globally, to achieve SGD 6 targets, it would require USD 114 billion per year starting in 2015 to solve the water crisis by 2030. This USD 114 billion amount is 3x more than the current global investment in water and sanitation. To achieve these targets in Ethiopia, the nation will require more than USD two billion annually. There is no way you can get this amount of funding from anywhere that is why we in water.org say turn your eyes to the private sector and make the sector bankable.
Capital: You have been the chief of Water.org, for over a year now. What are the Major challenges you have experienced?
Salfiso: The biggest challenge is the misunderstanding of NGO work with MFI’s. If you are an NGO, you are there to give for free. This is the biggest challenge. The second is related to lack of policy and awareness of the policy makers and regulators in understanding the role of banks and MFI’s into the WSS sector.
Lack of loanable funds is the most critical problem, followed by lack of capacity of MFIs. The national bank has no policy which talks and includes the WSS lending as one of the priority lending schemes as it did for agriculture and energy credit schemes. This has created a dilemma. If MFI’s could take this as seriously as they do for fertilizer lending.
Capital: Are you getting the support you need from the Ethiopian government?
Salfiso: The answer is yes but not to the extent we need. I am sure this will improve. We are working with the Ministry of Water, Irrigation and Electricity to include MFI’s in the policy document. The government has given us a license to operate in Ethiopia of course. I am confident when they understand our Water Credit Model, they will fully align with us as it will solve their own problem and help them reach the commitment the government made to the world through SDG.
Capital: Open defecation has been a major challenge in Ethiopia. Millions still relieve themselves outside in public how is Water.Org doing working to stop this menace in the country?
Salfiso: We all know in Ethiopia eating in public is a shame but urinating on the side of the road is not. We need to change that. Availing affordable toilets in each house will make things better. We need to avoid the campaign mode of doing things around WSS but focus on a mindset and behavioral change. We believe a changed mind will lead to renouncing open defecation instead of practicing it.
Capital: How can we convince political decision-makers to better understand and to work harder on sanitation issues?
Salfiso: Decision makers at all levels should understand that the extent of water crisis and the level of commitment we make as a nation is huge and not attainable at the current pace. All concerned should bring their heads together and talk. We are only 11 years away from 2030, which is the end of SDG. Considering the significant resources needed for the sector, there is a need to mobilize domestic resources through commercial banks and micro finance institutions (MFI).
Making the WSS bankable and subject to commercial loans is paramount. There are over 38 MFI’s and 18 commercial banks in Ethiopia. These MFI’s and banks including WASH loans to their loan portfolio will help government and WASH charities free up their limited funds and focus their efforts in a more targeted way on the poorest. The resources in these private sectors include more than the funds to be mobilized by public, bilateral donors and NGO’s.
Our recommendations to further develop the potential use of micro-finance for the WASH sector include: making the national bank and development bank include the WASH lending as one of the priority lending schemes as they did for agriculture, income generating and energy credit schemes. They should convince the commercial banks and development bank to allocate dedicated capital for MFIs to take loans from these banks and lend the money out for household water and sanitation self-financing as these MFI’s are within the communities. A mechanism should be put in place to recognize household lending as is done for groups.