Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda Developing a Rural Sanitation Market in Uganda

Water and Sanitation Program: REPORT

Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda Developing a Rural Sanitation Market in Uganda

Harriet Nattabi, Amos Bakeine, Yolande Coombes, and Samuel Mutono

September 2015

The Water and Sanitation Program is a multi-donor partnership, part of the World Bank Group’s Water Global Practice, supporting poor people in obtaining affordable, safe, and sustainable access to water and sanitation services. Authors: Harriet Nattabi, Water and Sanitation Specialist The Water and Sanitation Program is a multi-donor partnership, part of – GWASA, Amos Bakeine, Consultant – GWASA; Yolande the World Bank Group’s Water Global Practice, supporting poor people Coombes, Senior Water and Sanitation Specialist- in obtaining affordable, safe, and sustainable access to water and GWASA; Samuel Mutono, Senior Water and Sanitation sanitation services. WSP’s donors include Australia, Austria, Denmark, Specialist – GWASA Finland, France, the Bill & Melinda Gates Foundation, Luxembourg, Netherlands, Norway, Sweden, Switzerland, United Kingdom, United Acknowledgements States, and the World Bank. This report is about developing a rural sanitation market in Uganda. The Water and Sanitation Program (WSP) Disclaimer supported the Ministry of Health and the Ministry of Water The findings, interpretations, and conclusions expressed herein and Environment to strengthen the enabling environment are entirely those of the author and should not be attributed to the for implementing rural sanitation at scale. The technical World Bank or its affiliated organizations, or to members of the Board assistance focused on developing capacity to create of Executive Directors of the World Bank or the governments they demand for improved sanitation and to improve the supply represent. The World Bank does not guarantee the accuracy of the in rural areas. As part of improving the supply, WSP data included in this work. developed a model for the rural sanitation market, based on experiences from Indonesia, Cambodia and Tanzania. The model was piloted in the districts of Amuria, Katakwi, Copyright Statement Mityana and Mubende. This model and the lessons from the The material in this work is subject to copyright. Because The World pilot are presented here for sector stakeholders, especially Bank encourages dissemination of its knowledge, this work may be the Ministry of Health and the Ministry of Water and reproduced, in whole or in part, for noncommercial purposes as long Environment as well as the local governments. It also gives as full attribution to the work is given. recommendations on what needs to be improved in order to develop the rural sanitation market at scale. © 2015 International Bank for Reconstruction and Development/The The authors wish to thank the Government of Uganda, World Bank. especially the Ministry of Health, the Ministry of Water and Environment and the districts of Amuria, Katakwi, Mubende and Mityana for their time and support during the implementation of the activities described in the report. Special thanks to Glenn Pearce-Oroz, Principal Regional Team Leader – GWASA and Christina E. Malmberg Calvo, Country Manager for Uganda – for their advice and guidance during the elaboration of this document; Emmanuel Nkrumah, Senior Water and Sanitation Specialist - GWADR, Berina Uwimbabazi, senior Water Resources Management Specialist - GWADR and Ziauddin Hyder Senior Nutrition Specialist – GHNDR for reviewing the document and providing valuable comments in the process of its elaboration.

Photo Credits: WSP/The World Bank and Post Bank Uganda Ltd. Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda Developing a Rural Sanitation Market in Uganda

Harriet Nattabi, Amos Bakeine, Yolande Coombes, and Samuel Mutono

September 2015

www.wsp.org Table of Contents

iv Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Table of Contents

www.wsp.org v Acronyms and Abbreviations

BCC Behavior Change Communication BoQ Bills of Quantity CAO Chief Administrative Officer CLTS Community-Led Total Sanitation DEC District Executive Committee DHI District Health Inspector DHO District Health Officer DLG District Local Government DSCG District Sanitation Conditional Grant KDS Kampala Declaration on Sanitation KDS+10 10-Year Improved Sanitation and Hygiene Financing Strategy LC Local Council MoH Ministry of Health MoES Ministry of Education and Sports MoU Memorandum of Understanding MWE Ministry of Water and Environment NAADS National Agricultural Advisory services Program NDP National Development Plan NGO Non-Governmental Organization NSWG National Sanitation Working Group ODF Open Defecation Free OPM Office of the Prime Minister PHAST Participatory Hygiene and Sanitation Transformation approach SACCO Savings and Credit Cooperatives SAS Senior Assistant Secretary SDG Sustainable Development Goal UBOS Uganda Bureau of Statistics UGX Uganda Shillings UNICEF United Nations Children’s Fund USD United States Dollars VHT Village Health Team VSLA Village Savings and Loan Association WASH Water, Sanitation and Hygiene WHO World Health Organization WSP Water and Sanitation Program

vi Executive Summary

Introduction been very little progress on this engagement, Access to improved sanitation in rural Uganda is very low, especially at the community level. with only 35 percent of the rural communities having • Institutional arrangement: The country access to improved sanitation. Past interventions have has a strong institutional framework for the placed emphasis on gaining access, but not necessarily implementation of sanitation at scale, but it needs on an improved sanitation solution. According to a study to be further strengthened at the district level to carried out by the Water and Sanitation Program (WSP) support the development of a rural sanitation in 2012, Uganda loses USD177 million annually due market. to poor sanitation in lost productivity, healthcare and • Financing: Sustainable financing of the sector is premature deaths. a major stumbling block to Uganda’s sanitation sector. Over the last three years, the annual In 2006, the sector developed a 10-year Financing Strategy funding for sanitation has been less than 40 percent for Improved Sanitation and Hygiene as a roadmap to meet of what is required. In addition to the low level the national goals of increasing sanitation coverage to 77 financing to the sector, the rural communities have percent by 2015. The strategy is the key implementation many competing needs, with very little disposable document and is based on three pillars i) improving income to spend on sanitation. The sector needs the enabling environment, ii) creating demand and iii) to enable households to mobilize resources for improving supply. improved sanitation, for example through financial institutions. There have been several interventions in the country • Monitoring: The sector has a performance to improve sanitation, but most have dwelt on creating measurement framework and carries out sanitation demand for sanitation, with very little done to improve the performance benchmarking across districts, but supply and quality of facilities. This document addresses the the current performance measurement framework critical piece that has been missing - linking the demand only considers access to sanitation and does side to a vibrant supply side for sustainable improvement in not monitor market development. In addition, access to sanitation in rural areas. the current monitoring system has weaknesses and although reporting structures exist both at Situation Analysis district and national level, data collection, storage A successful rural sanitation market requires the right and dissemination need to be strengthened and programmatic conditions to promote its development feedback loops require improvement. and ensure its sustainability. Below are some of the factors • Program methodology: Sanitation interventions affecting sanitation development in Uganda: in Uganda are guided by the 10-year Financing • Policy, strategy and direction: Uganda has Strategy for Improved Sanitation and Hygiene a strong policy environment, but there are based on three pillars: 1) creating demand for challenges in translating the policy framework improved sanitation 2) improving supply and 3) into implementation at the community improving the enabling environment. and household level. Although key strategy • Implementation capacity: Uganda does not documents advocate for the involvement of yet have sufficient capacity to implement rural the private sector and the establishment of an sanitation at scale. Over the last three years, there appropriate enabling environment to enhance has been noticeable increase in the capacity to their participation in service delivery, there has create demand, especially the implementation of community-led total sanitation (CLTS). However, www.wsp.org vii Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Executive Summary

there has been little progress on sanitation • Most households would prefer to use proceeds from marketing and on improving the supply chain. sale of their harvest, instead of borrowing from In 2014 the Ministry of Health, with the support financial institutions for latrine construction. of partners, developed a comprehensive capacity • Entrepreneurs think that the rural households are building strategy to support demand creation for not a viable market for their products. sanitation and the supply of products and services. • Availability of products and tools: Although The findings of the market survey, and the previous Uganda has a ready supply of sanitation products, market analysis carried out by PATH, were used in the especially concrete slabs, they are not readily development of the rural sanitation market model. The available to rural communities. A study carried out model aims to improve coordination of the sector players, in 2012 showed that the rural sanitation market bringing together consumers, entrepreneurs and financial is fragmented and actors in the sanitation supply institutions under the guidance and regulation of the chain have not invested in building sanitation district local government (DLG), which is responsible for solutions for rural households because they do not service delivery, with technical support under the oversight consider this segment of the population to be a of the relevant ministries. viable market for their products and services. Under this model, the DLG is required to: WSP implemented a Technical Assistance (TA) project • Regulate the market through a regulator and from Financial Year (FY) 2013 to FY 2015, to support the regulatory committee Government of Uganda (GoU) to strengthen the enabling • Create demand for improved sanitation. environment to implement rural sanitation at scale. The • Nurture the market and bring together all market TA included strengthening the implementation capacity players including the private sector. The DLG by developing a capacity building strategy to strengthen should enlighten the private sector about emerging the organizational framework and ensure adequate human business opportunities to get their buy-in. resources at all levels of government to deliver on the • Capacity building of the partner entrepreneurs and three pillars of the ISH strategy. Under the TA, a behavior equipping them with the knowledge and skills to change communication (BCC) strategy was developed meet the needs of the communities. to encourage rural households to improve their existing • Creating linkages between entrepreneurs and rural sanitation facilities. WSP in partnership with the central communities. government and selected local governments also developed a model to bring structure to the rural sanitation market Setting up the sanitation market under the model involves and improve service delivery to the rural communities. The a number of decisions and activities that include carrying model was piloted in the four districts of Amuria, Katakwi, out a series of preliminary activities to get stakeholder Mubende and Mityana. buy-in, capacity building for entrepreneurs and masons and generating demand for improved sanitation, which Developing a Rural Sanitation Market would integrate marketing activities for available services To understand the existing market in the four pilot districts, and products. a market survey was carried in the four districts to establish current consumer practices and preferences, as well as to The pilot phase of the market model run in the districts of establish availability of service providers. The main findings Amuria, Katakwi, Mubende and Mityana, identified several from the market were: challenges in setting up the market: • Most households in the four districts (63 percent) • CLTS encourages communities to build toilets use traditional pit latrines with earth floors, using available materials and most households but most would like an improved toilet with a construct unimproved latrines and once permanent superstructure, and are willing to pay a constructed it is very difficult to get the households service provider to construct the toilet. viii Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Executive Summary

to improve their toilets. It is important to set and recommended that the sector addresses the following issues agree with the community a minimum standard over the next few years: of a latrine during triggering. 1. Finance: Finance is a major constraint to the • There is a lack of knowledge in the communities development of the market. The incomes of on the dangers of unimproved sanitation and the rural people, most them farmers, is low and on the availability of affordable products. This seasonal; therefore if they are to access improved issue can be addressed through demand creation sanitation, the sector has to assist them to access activities and wide dissemination of information alternative financing from financial institutions. on available products and services. Sector partners will have to work closely with • Rural households have little disposable income financial institutions to carry out financial literacy to purchase improved sanitation products, but and for the financial institutions to adjust their they also have a fear of banks, with many shying operations to accommodate the rural community. away from latrine loans which would have helped Other than addressing household financing, the to fast-track coverage. Households should be government needs to increase sector financing and encouraged to access loans from their village allocation for sanitation to the districts to support saving schemes, although they have less favorable market development and all the activities needed terms than banks. to set up the market. • Although during the market survey most 2. Capacity building: The sector developed a households expressed a desire to construct an comprehensive capacity building strategy. Over the improved latrine with a permanent superstructure, next few years this strategy should be financed and during the pilot phase it was noted that most implemented to adequately equip local government households were not willing to spend large sums employees with skills and resources to facilitate of money on sanitation and preferred to purchase the development of the rural sanitation market, the cheap sanplats to improve on their existing especially to bridge the gap between the demand facilities. This situation will impact on the interest generation which is currently being implemented, of the entrepreneurs to participate in the market. and the improvement of the supply side. The • Regionally-based entrepreneurs incur substantial sector should also establish a sustainable system for overheads once they travel to communities from capacity building, especially through the training their areas of operation, and sometimes it is not institutions. economically viable to serve some communities 3. Product: Although the sector is promoting concrete unless they can get a substantial number of orders slabs and sanplats, the lack of more affordable, from the community. Trained masons in these accessible products that meet the household communities, far from the regional entrepreneur, needs (durable, easy to clean and sealable) is still a could be encouraged to form groups and pool major constraint in the market. The sector should resources to meet the community needs. explore the possibility of other technologies such as plastic technology which may address some of the Recommendations for Scaling Up challenges of concrete products. For Uganda to achieve universal access to improved 4. Monitoring: For Uganda is to develop a robust sanitation in rural areas, it will be necessary to develop rural sanitation market, the sector needs to develop a vibrant, diversified sanitation market. The market a comprehensive monitoring system for market development in the four pilot districts, although still development, addressing both demand and the nascent, provided valuable lessons, which can support supply, so as to identify and address any challenges replication in other districts and the development of a and issues of inequity. rural sanitation market at scale. To achieve this goal, it is

www.wsp.org ix Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Executive Summary

5. Sustainability and scale: For sustainable sector should work on mainstreaming sanitation, development of the sanitation market, there is need especially the creation of demand, into nationwide for continued engagement of the private sector. programs such as the new World Bank nutrition This will only be achieved if the market is profitable project and the government implemented National and at scale. At the current level of financing for Agricultural Advisory Services (NAADS) program, sanitation and implementation, it is difficult to to leverage their reach and resources. achieve scale, therefore over the next few years the

x I. Introduction and Overview

Access to improved sanitation in rural Uganda is very low. Over the years there have been several initiatives to improve Most interventions, for example community-led total the sanitation coverage in Uganda. The figure below shows sanitation (CLTS), have concentrated on encouraging key developments in the sector over the last 18 years, starting people to have access to a toilet, but not necessarily on with the signing of the Kampala Declaration on Sanitation improved sanitation, which is where the health benefits are (KDS) in 1997 by all district chairpersons to improve triggered. According to the Joint Monitoring Program of sanitation in their areas. The KDS was a comprehensive UNICEF/WHO, only 35 percent of the rural population strategy and advocated for the promotion of the private has access to improved sanitation, while 10 percent practice sector participation in the sanitation sector to improve access open defecation. The rest use either unimproved sanitation to products and services, but no funds were allocated for its or shared facilities. (UNICEF/ WHO, 2013). implementation, and therefore there was little noticeable progress in sanitation coverage after 1997. In an effort to A study carried out by the Water and Sanitation Program improve sanitation coverage and to clarify institutional (WSP) of the World Bank in 2012 showed that Uganda mandates, a Memorandum of Understanding (MoU) was loses USD177 million annually in lost productivity, signed in 2001, between the Ministry of Water, the Ministry healthcare and premature deaths due to poor sanitation. The of Health and the Ministry of Education and Sports. In cost of poor sanitation falls disproportionately on the poor 2004 the National Sanitation Working Group (NSWG) households more than the rich, as it is a bigger proportion was set up to operationalize the MoU. In 2006, nearly 10 of their income than it is of that of the rich, and they are years after the KDS was signed, a new document KDS+10; more likely not to have improved sanitation as shown in the or the 10-year Financing Strategy for Improved Sanitation diagram below. (Coombes & al., 2012) and Hygiene (ISH) was developed. The strategy is based

Figure 1‑1: Sanitation coverage in rural Uganda (separated by national wealth quintiles).

www.wsp.org 1 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Introduction and Overview

on three pillars: i) improving the enabling environment sector. This document aims to improve the implementation ii) creating demand and iii) improving supply. Unlike the of the third pillar of the strategy, including improvement KDS, the ISH was costed and also identified potential of the enabling environment, which will support the sources of funding for its implementation. This strategy improvement of the supply of products and services. has now become the key implementation document for the

Figure 1‑2: Key developments in the sanitation sector in Uganda.

1997 - Kampala 2001 - MoU on 2004- NSWG 2005 - 2006 - ISH 2010 - Declaration on Sanitation Set up Environmental Strategy Sanitation Sanitation Health Policy budget line

• Exemplary • MWLE - • Coordinate • A national • Demand • Dedicated leadership planning and liaise with sanitation generation for budget line for • Full community investments sanitation and hygiene sanitation and sanitation set up mobilisation in sewerage stakeholders promotion hygiene • 2011- Budget services, public and strategy • District & S/C • Supply of line financed facilities in operationalise focus • District water sanitation towns and rural the MoU. and sanitation • Coordination and • An enabling growth centres • Clear budget coordination multi-sectoral framework • MoH - mechanisms for committees approach household sanitation at all • A dedicated • Fora at districts hygiene and levels national • Central role of sanitation • Test models sanitation team women • MoES - under the MoH • Private sector school latrine • No subsidies development construction towards the and service and hygiene hardware cost delivery education of household • Capacity latrines building at district level • Policies and guidance

2 II. Situation Analysis

For a sustainable rural sanitation market, it is necessary institutional roles, it did not provide sufficient incentive to have the right programmatic conditions to promote its for the key stakeholders to improve sanitation and hygiene development and ensure its sustainability. The following (Pillai & al., 2009). Currently sanitation is not prioritized section reviews the existing enabling environment and under the MoH and districts receive little support from the how it affects the development of the rural sanitation ministry, which hampers development of new initiatives and market, including the promotion of demand and supply of rollout of successful pilots. Districts will need considerable improved sanitation. support in developing a sustainable sanitation market, which may not be available from the MoH. 2.1 The Policy, Strategy and Direction Although Uganda has a relatively strong policy environment At district level, rural sanitation is supported by a it does not adequately support the development of the team of environmental health workers at different local sanitation market, especially the participation of the private government levels, under the leadership of a district sector. Currently, there is very little incentive for the health officer. These provide support to different sectors private sector to participate in the rural sanitation market. to implement sanitation and hygiene and are responsible Sanitation is included in key policy and strategy documents, for both creating demand for improved sanitation, as including the National Development Plan (NDP), but well as supporting the improvement of the supply chain. emphasis is on creating demand, with little mention of the District water and sanitation coordination committees supply of services and products. Despite the fact that the were established to bring together different stakeholders, 10-year Financing Strategy for Improved Sanitation and but although they are reported to meet quite regularly, the Hygiene (ISH) includes the improvement of supply and coordination between stakeholders at district level is still the participation of the private sector, there are no details lacking. This has resulted in a variety of approaches being on how this is to be achieved. pursued in communities, some of which (loosely targeted subsidies, for example) are detrimental to the development 2.2 The Institutional arrangement of a sustainable sanitation market. The country has a clear institutional framework for implementation of sanitation at scale, but capacity needs 2.3 Financing to be strengthened at the district level to support the Sustainable financing of the sector is a major stumbling block development of the market, especially the supply side. The in the rollout of a scalable sanitation and hygiene program. memorandum of understanding (MoU) on sanitation signed The 10-year strategy identified the required financing to in 2001 between the three ministries with responsibility implement sanitation at scale, including sources of funding for sanitation (Water, Health and Education) details the for both demand generation and improvement of supply. role of each ministry. Under the MoU, the Ministry of Although there is a dedicated budget line for sanitation, Education is responsible for school sanitation and hygiene the current funding is not adequate to achieve the national education in schools, the Ministry of Water for sewerage targets. Outside of the Uganda Sanitation Fund Project,1 and public facilities in urban centers and small towns, while over the last three years, the budget line has received only the Ministry of Health (MoH) is responsible for household 40 percent of the required annual funding estimated under hygiene and sanitation, and therefore the development of the the strategy. Districts outside the Uganda Sanitation Fund household sanitation market, including demand generation Project area receive UGX21 million (USD 7,500) a year and supply. A review of the MoU in 2009 by the World Bank underlined several limitations in this arrangement, the major one being that although the MoU clarified 1 The Uganda Sanitation Fund was established by a $5 million grant from the Global Sanitation Fund (administered by WSSCC). www.wsp.org 3 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Situation Analysis

to spend on sanitation, both for creating demand and for 2.4 Monitoring and Evaluation improving the supply of products and services. In practical The sector has a performance measurement framework for terms, this level of funding is used for observing the Sanitation water and sanitation. Of the 10 “golden” indicators, three Week, and creating demand for sanitation and promotion are for sanitation and hygiene, including school sanitation, of hand-washing with soap in a few communities, without access to hand-washing facilities and access to sanitation. addressing the supply side. It should be noted that although The sector also carries out sanitation district performance the MoH is responsible for household sanitation (as per benchmarking based on eight indicators on input, process the MoU), only the water sector has allocated funds to the and outcomes. Unfortunately under the existing system, budget line. The importance of increased financing to the information is only tracked on the creation of demand and districts is shown by the results of the district performance no monitoring of the supply chain or the key elements of benchmarking over the last two years when 15 out of the 20 the enabling environment is carried out. Therefore, since best performing districts received support from the Uganda districts are held accountable for demand creation, they Sanitation Fund Project of at least UGX150 million (USD pay more attention to the generation of demand without 54,000) annually. These districts have also made progress in addressing the supply or the enabling environment, to the encouraging people to improve their existing facilities. detriment of the market development. As part of its M&E approach, the sector needs to develop indicators for the If Uganda is to accelerate access to sanitation, there will sanitation market which are currently not addressed, such be need to look for alternative sources of funding and as the supply chain. implementation, for example through mainstreaming sanitation in national poverty alleviation programs like In addition to developing new indicators for the market, the the new Northern Uganda Social Action Fund, a World existing monitoring system needs to be improved. Although Bank-funded project. In addition to making use of national on a systems level, reporting structures exist through MIS programs, resources from the private sector can also be both at district and national level, data collection, storage leveraged at the household level. In terms of household and dissemination need to be strengthened and feedback income, the 2013 Uganda National Household Survey loops need to be improved (Henrietta Bullinger; Ronnie (UNHS) shows that the average household monthly income Rwamwanja, 2013). Equally as important is using a in rural areas is UGX325,000. An improved latrine with a harmonized definition of improved sanitation by all permanent superstructure costs an estimated UGX700,000 data collection agencies, including the Uganda Bureau (215 percent of the monthly income of a rural household). of Statistics (UBOS) and the MoH. The difference in Under the Environmental Health Policy, the government definition has caused a difference in access figures reported does not subsidize household sanitation, but a review of in the country, including in different documents generated the household expenditure from the Uganda Household by UBOS itself. For example, under the household surveys Survey of 2011 shows that rural households have very little carried by UBOS there is no distinction made between disposable income, as they spend most of their income improved and unimproved latrines, while the Demographic (64 percent) on health, education and food. Apart from having little disposable income, most of the rural people are farmers with seasonal income, which affects their financial UGX325,000 flows. Therefore if they are to be assisted to access improved sanitation, it is important to assist the rural households Average household monthly income in rural areas, according to 2013 Uganda National Household Survey (UNHS). to have access to financial institutions (micro-financing, savings and loan). Some households are too poor to pay for their own improved sanitation. The sector may need to UGX700,000 review the possibility of having smart subsidies targeting the very poor so that they too can access improved sanitation. Estimated cost of an improved latrine with a permanent superstructure.

4 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Situation Analysis

Household Survey, also carried out by UBOS, and separates the improved from the unimproved facilities. In 2013 the The Appropriate Technology Centre in the Ministry of sector developed a revised definition of improved sanitation Water and Environment (MWE) has carried out action but although it was shared with UBOS, it is yet to be research on different latrine designs, some of which could reflected in the UBOS data collection tools. benefit the poor but these have yet to be widely disseminated in the rural areas. 2.5 The Program Methodology 2.6 Implementation Capacity As stated above, all sanitation interventions in Uganda are Although Uganda does not yet have sufficient capacity to guided by the 10-year Improved Sanitation and Hygiene implement rural sanitation at scale, there has been noticeable Financing Strategy based on three pillars: 1) creating progress over the last three years especially in terms of CLTS demand for improved sanitation, 2) improving supply and implementation. In 2015, the Ministry of Health (MoH), 3) improving the enabling environment. All three pillars with support from partners, developed a capacity building are necessary for market development to take place. A strategy based on the findings of a capacity mapping vibrant market requires sustained demand for services and exercise. The strategy aims to strengthen the organizational products as well as a well-developed supply and the enabling framework for effective implementation of sanitation and environment to support both. The strategy identified hygiene; including revising the staffing norms in the local two approaches to create demand: i) enforcement and ii) governments and strengthening coordination at all levels. promotion and social marketing. Many districts have carried The strategy also addresses how to adequately build the out enforcement of the Public Health Act, which requires capacity of the human resources at all levels of government every household to have a toilet, and with the support of to support both the demand and supply of improved the police even made arrests for non-compliance. It has sanitation. This includes ensuring that environmental been noted that the facilities constructed from coercion are health workers in the districts have the resources, mostly usually temporary and of poor quality and are little more transport, for them to implement sanitation and hygiene than fixed open defecation points. Several methodologies programs, and that new approaches can be mainstreamed have been used to promote sanitation and hygiene in the into the curricula of public training institutions. The past, including the Participatory Hygiene and Sanitation strategy also aims at enhancing the enabling environment to Transformation approach (PHAST), but since 2009the sustainably deliver rural improved sanitation and hygiene, sector has adopted the community-led total sanitation including revising key documents such as the sanitation (CLTS), home improvement campaigns and sanitation MoU and the guidelines for the sanitation budget line, and marketing; although sanitation marketing has not been mobilizing resources. implemented at scale due to limited capacity. The ongoing CLTS and home improvement campaigns encourage While employees at the national level have the technical households to build toilets, but not necessarily improve capacity to support districts to implement the creation of their facilities and many households have constructed demand for improved sanitation and improvement of the unimproved facilities that do not provide health benefits. supply chain, they are few in number and cannot adequately Under sanitation marketing, the sector is encouraging support all the 111 rural districts. For large-scale market households to improve their existing facilities. development, there is need to enhance the existing capacity at national level, through support by partners and donors. To improve supply, the strategy recommends improving the private sector supply chain and developing pro-poor 2.7 Availability of Products and Tools technology. The work on the private sector supply chain Uganda has a ready supply of sanitation products, especially has not been developed to scale; instead, rather small scale concrete slabs, but these are not readily available to rural projects and pilots have been carried out only in a few districts communities due to a variety of factors. A diagnosis of the by different development partners. Some of the lessons from rural supply chains for household sanitation, focusing on these were used in the development of the model for creating the commonly found or most preferred technologies for a rural sanitation market presented in Chapter 3. improved sanitation in Uganda, was carried out in 2012. www.wsp.org 5 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Situation Analysis

The diagnosis identified several issues: WSP implemented a Technical Assistance (TA) project a) The market is disaggregated. The market from 2013 to 2015, to support the Government of for household sanitation is undefined and Uganda (GoU) to strengthen the enabling environment to undeveloped. There is a lack of coordination along implement rural sanitation at scale. A brief summary of the the sanitation supply chain and entities are acting activities carried out under the project and key outputs are in isolation; from manufacturers to distributors, presented in the following section. sales, installation and services, the players do not seem to be in communication. 2.8 WSP’s Technical Assistance Project b) Lack of interest. Actors in the sanitation supply (P131961) chain have not invested in building sanitation The objective of the TA project was to support the solutions for rural households because they do not Government of Uganda (GoU) to improve programmatic consider this segment of the population to be a conditions (the enabling environment) for scale-up and viable market for their products and services. sustainability of rural sanitation and hygiene for poor c) Affordability. There are relatively high costs people, support the GoU to develop tools and models for involved in latrine construction, and households demand creation using behavior change communication seem unable to break those costs into reasonable and CLTS and improve the rural sanitation market with and manageable outlays of money. An improved an appropriate business model. With the improved single stance latrine with a permanent super environment and appropriate tools and guidelines, the structure costs an estimated UGX 700,000 of Government should be well positioned to implement CLTS which on average 20 percent is spent on pit and sanitation marketing at scale, leading to increased use excavation, 10 percent on the slab and the rest on of improved sanitation services and hygiene practices by the superstructure. Therefore if households could poor people in rural areas. prioritize the substructure including the slab, and construct a semi-permanent superstructure, In partnership with the MoH and MWE, and with several the cost of the latrine would reduce considerably. other partners WSP worked on the following: Households also encounter constraints in the • Situation review and action planning of prices they must pay for labor and supplies, and the enabling environment: To identify key seem to have disinterest in or lack of awareness of interventions needed to support the implementation consumer loans (PATH, 2012). of rural sanitation at scale, WSP carried out a review of the enabling environment. The review addressed Apart from the concrete products, there are plastic products the policy environment, institutional arrangements, on the market, but these are quite expensive; a concrete program methodology, implementation capacity, sanplat costs UGX25,000 to 35,000 compared to a availability of products and tools, financing, cost- small plastic slab of the same size which on average costs effectiveness and monitoring and evaluation. UGX60,000. Partners have recently introduced new plastic • Strengthening monitoring and evaluation: As technologies which meet the attributes of an improved a member of the sub-committee on monitoring, toilet desired by the rural communities (durable, sealable WSP carried out an audit of the existing monitoring and easy to clean), but these are not yet widely distributed system to identify key challenges and solutions because manufacturers and partners are still working on to address them. The findings of the audit were developing the distribution chain for the products. The used by a consortium of partners, led by IRC plastic technology includes slabs developed and tested International Water and Sanitation Centre, to by WSP and IFC in Kenya and are currently available at prepare a proposal for funding for improvement of Namanve at the Crest Tanks and SilAfrica factories. Water the performance measurement framework and the for People has also introduced Sato pans, which may soon use of information and communication technology. be produced by Crest Tanks as well.

6 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Situation Analysis

The proposed measurement framework is to marketing, including market development in include indicators on market development, which Uganda. A capacity building strategy was then is not monitored under the current framework. developed based on the findings of the mapping • Rural sanitation behavior change program: The exercise. The strategy addresses capacity building ‘Kayonjo’ campaign was developed to encourage for both demand generation and improvement of rural households to improve their existing latrines the supply chain. and to stop open defecation. The campaign uses • Development of the rural sanitation market: different channels of communication - mass Although Uganda has made considerable progress media, video, posters, teaching aids and drama. to create demand for improved sanitation, very little The campaign was run in the four pilot districts has been done to improve supply. WSP developed of Mityana, Mubende, Amuria and Katakwi to a market model to improve the supply chain for complement CLTS implementation and market rural sanitation, and run a pilot in four districts of development. It has been translated into 14 local Amuria, Katakwi, Mubende and Mityana. languages to cover the whole country. • Capacity building strategy: WSP carried out a The next chapter addresses how to establish a functional capacity mapping exercise for the rural sanitation market to serve the rural poor households so that they have sector in Uganda, to identify capacity gaps impeding access to affordable products and services that meet their the implementation of CLTS and sanitation needs, based on lessons from the pilot phase.

Unimproved Latrine Common in Rural Uganda.

www.wsp.org 7 Strategic Relevance of the Products for the Water and IV. Sanitation Sector

III. Developing a Rural Sanitation Market

As part of the technical assistance provided to the upgrade to an improved latrine with a permanent Government of Uganda, WSP, together with government superstructure for which they would be prepared to partners at the central and district levels, has developed a engage a builder for a fee of between UGX300,000 model to strengthen the rural sanitation market, based on and UGX1,000,000, financed from proceeds of the findings of the review of the rural sanitation market sales of their farm produce as and when harvested carried out in 2012 and lessons from other countries. The and sold. About half of the entrepreneurs surveyed model was tested in the four districts of Mityana, Mubende, attached a price of UGX500,000 to UGX900,000 Amuria and Katakwi. to the construction of a two-stance improved latrine with a permanent superstructure. However, a closer Currently there are two major sources of funding for analysis revealed that the price attached by some sanitation: the Uganda Sanitation Fund (USF) Project entrepreneurs to various latrine products and services and the District Sanitation Conditional Grant (DSCG). is based on lack of knowledge and experience, and The USF supported districts receive an average of UGX could be reduced drastically if entrepreneurs were 150,000,000 (USD 55,000) annually, while the districts equipped with the skills necessary to improve their receiving the DSCG receive UGX 21,000,000 (USD productivity. The gap between the entrepreneur 7,500) annually. To develop a model that can be replicated, and the rural household with regard to price is pilot districts were selected from those supported under the not too wide and could be bridged, especially if USF Project and from those supported under the DSCG. entrepreneurs could be equipped with relevant Amuria and Katakwi, which were the weakest districts knowledge and skills under the USF Project, according to the performance • The survey also observed that, while they may benchmarking, were selected for the pilot, while Mityana have the will, there is a tendency among the rural and Mubende, which were average performing districts, community to feel that a latrine is not a place to were selected from those receiving the DWSCG. spend much money on, if any. Accordingly, it may require a significant effort to translate their stated The key lessons from the pilot were used to modify the desire into tangible results of improved latrines model and process for establishing the market. built and delivered. • While one of the major challenges cited by most 3.1 Market Survey in the Pilot Districts households was the lack of service providers, it was A market survey was carried out in the four districts, to also found that half of the households surveyed were supplement the findings of the market analysis carried out by not aware of the presence in their local area (village PATH in 2012. The survey was carried out to establish the or parish) of a good service provider to whom they current sanitation practices of rural households, the type of could go to have an improved latrine built for their sanitation facilities desired by rural households, availability homesteads despite several masons having been of entrepreneurs with the competences necessary to build trained before the survey. such facilities, and the availability of financial institutions • Similar to the findings of the earlier study, due to the to support both the households and the entrepreneurs. prejudices they hold about rural households’ viability as Below is a summary of the findings: a market for their products and services, entrepreneur’s • According to the survey, a significant majority confidence in this market is very low. Building and (63 percent) of rural households are using the maintaining the confidence of entrepreneurs may traditional pit latrine with an earth floor, but most require a significant effort and understanding on the of these households (75 percent) would prefer to part of the district local government.

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3.2 Lessons from Other Countries A key lesson from the pilot is that it is not enough to Several countries have worked on developing a rural focus on the private sector, but it is necessary to include sanitation market and serve as valuable points of reference. demand creation approaches, offering financing options The lessons from these countries informed the development to households to address their financial constraints and to of the market model for Uganda. effectively engage local government champions. The pilot also concluded that to improve market penetration, the Cambodia: Cambodia started developing the sanitation entrepreneurs should offer a wider product and service market in 2006 by carrying out a market survey that showed mix to increase choice for the households. (Danielle a high latent demand and a fragmented supply chain for Pedi, 2012). products and services, just as is the case in Uganda. In order to facilitate the market, partners developed a latrine WSP, with several partners in Cambodia, ran a pilot package, ‘the easy latrine’, which could be produced and sold initiative on sanitation financing to address the challenge locally, which they marketed in pilot districts. To address of low-income households’ accessing improved sanitation. the fragmentation in the market, the pilot targeted existing After 13 months, the pilot showed that there is demand producers of pre-fabricated products to serve as “a one- for improved sanitation even in poor households IDF stop shop” manufacturing the products and coordinating credit is available. The pilot program also showed that the sales and distribution of the product package. One of a socially-oriented sanitation loan program is financially the challenges faced in the pilot phase was the difficulty viable and sustainable when provided the right support to convince the entrepreneurs that rural sanitation was a and if loans are managed carefully (Water and Sanitation worthy enterprise; most of them were not willing to invest Program, 2014). in slow moving products like latrines, and did not believe in the “high volume, low profit margin” business model.

Slabs on sale in a casting yard in Western Uganda.

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Indonesia: With support from partners, Indonesia hardware store owners who employed masons to cast and developed a “one-stop shop” business model. It offers a sell sanplats to the rural households. Although this model range of products and price options. Under the business was more successful, the hardware stores faced the challenge model, the private sector and the government collaborate of acquiring the molds for casting the slabs, which were in business development at scale. The local governments then availed by the districts. stimulate community demand through CLTS and behavior change communication. The local governments On the basis of the market study’s findings and lessons from also stimulate business development and value chain by other countries, WSP in Uganda worked with the ministries promoting and supporting entrepreneurs through training, of Health and Water and Environment to develop a model accreditation, coordination and also carry out monitoring for the rural sanitation market to support the development and quality assurance. The local private sector delivers of a sustainable supply chain for improved latrine products products and services. Indonesia has seen success with this and services. The following section presents the structure model and is now implementing it at scale. The committed that was developed and piloted. entrepreneurs formed an association, APPSANI. Under APPSANI, since 2012, more than 25,000 toilets have 3.3 Structure of the Rural Sanitation Market been constructed and more than 600 potential members The rural households’ sanitation market consists of the have been trained, with 32 percent going on to establish district local government (DLG), entrepreneurs and rural businesses. The association has facilitated access to loans for households as the direct actors. The rural households are enterprise start-up and growth. (Kamasan & Smets) the primary consumers of sanitation products and services supplied by the market while entrepreneurs are the principal Tanzania: WSP supported the Government of Tanzania to producers and suppliers of the said products and services. implement a rural sanitation behavior change program in The DLG is the promoter of the market, and is responsible, selected districts as well as sanitation marketing. Under the for among other things, developing an environment under pilot phase in 10 districts, the project trained masons to which the market can take root and thrive on a sustainable construct sanplats, but the trained masons did not establish basis (Fig 3.1). businesses. Later the project worked with established

Figure 3‑1: Structure of the rural households sanitation market pilot

District Local Government (Regulatory Function) Capacity Building, Demand Creation Quality Control (CLTS, BCC, Enforcement)

Client Orders Entrepreneurs Rural Households Construction

Services Sub Contracts Services

Service Providers

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3.3.1 Roles of the District Local Government (DLG) 3.3.2 Profile of the Regulator and Role in the Under decentralization, the districts are responsible for Market service delivery including sanitation. Therefore they are (a) The case for regulation responsible for developing a sustainable rural sanitation In light of the central role that the market is expected to market. In implementing the rural sanitation market play in raising and maintaining sanitation coverage at the model, the DLG has the following roles: highest possible standard, the development and stability of 1. Regulating the market as detailed in section 3.2.2. the market is a matter of public interest. For the market 2. Demand creation activities to stop open defecation to operate, there must be willing buyers and willing sellers and promote the use of improved latrines. Under who are satisfied with the benefits and services rendered by the pilot, the districts implemented CLTS to get the market. The buyer needs to be satisfied that he/she is communities to stop open defecation and run a getting value for money, and the seller needs to be satisfied behavior change communication (BCC) campaign that he/she is getting a better return than he/she could have to encourage them to improve their latrines. got elsewhere. Consequently, it is necessary to regulate the 3. Enforcement of the Public Health Act. market. The regulator is required to resolve disputes, and to 4. Nurturing the market and bringing all market respond to any other issues that may arise with the potential players together by setting up a stakeholders’ to undermine market stability. platform, identifying potential partners from the private sector and enlightening them about the While it is recognized that the free market is the best emerging business opportunities to get their buy- vehicle for satisfying the desires and aspirations of the in. In the pilot phase, several workshops were various participants in any market, the resolution of issues organized to share the market opportunities and to (such as quality standards) cannot be left to market forces, review how different stakeholders can collaborate otherwise the issues may remain unresolved for long thereby for mutual benefit. increasing the risk of market failure. Although Uganda is a 5. Identifying and certifying partner entrepreneurs liberalized economy that does not encourage government and equipping them with the knowledge and skills control in the private sector, the rural sanitation sector necessary to enable them produce latrine products is a unique case where a market needs to be developed consistent with minimum standards. It is important to increase effectiveness and efficiency to help maximize to note that no interested entrepreneur should be sanitation coverage. Moving from the current scenario of closed out of the market, but since it is not possible an undefined and undeveloped market, to a fully functional for the DLG to support all of them at once, the and vibrant market will involve a transition and a process DLG will have to select a few credible firms to of change. partner with and champion in the market. It is necessary to certify these partner entrepreneurs, as Consequently, it is necessary to bring on to the scene a it gives them an entry point into the community neutral party to play the role of regulator for the market. and they will be considered trustworthy. These The regulator may not have to direct the change, but at the select entrepreneurs will have to be supported very least, should provide clarity of rules for engagement for a time until the market is more established. and expected product standards as well as be able to respond Mubende district gave recognition letters to the to any other issues that may arise with the potential to entrepreneurs, which they used while marketing undermine market stability. During the pilot phase these their services to the community and all the four responsibilities included the construction of quality and pilot DLGs supported the certified firms to market timely response to household requests for services, but their services. more serious issues may arise in the future. 6. Creating linkages between entrepreneurs and rural communities. Accordingly, in keeping with best practice, and to ensure 7. Monitoring and supervising all players and that market stability is achieved and maintained on a activities taking place in the market. sustainable basis, a regulatory function was included in the www.wsp.org 11 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Developing a Rural Sanitation Market

structure; a facilitating body which serves the public interest The District Chief Administrative Officer (CAO), asthe by guiding the growth and operation of the market in a accounting officer of the district, will operate as the regulator way that ensures effective protection of consumers’ interests for the Market, responsible to the District Executive without compromising the interests of other actors. Under Committee (DEC) for the sound, efficient and sustainable the pilot, the regulatory function and the regulator were operations of the market. created by a motion of the district council. The district council approved the terms of reference of the regulatory The regulator is supported at the district level by a regulatory committee and the responsibilities of the regulator. It is committee which attends to issues that require a collective recommended that any district that replicates this model rather than individual decision and action. These include should do the same. approving entrepreneurs to be certified by the DLG and setting minimum sanitation standards for the district, as well as field monitoring. (b) Structure of the regulatory function The regulatory function consists of various officers and At the sub-county level, the Senior Assistant Secretary (SAS) structures from within the District Local Government is the officer responsible for the regulatory function in the playing different roles all aimed at building and maintaining sanitation market reporting to the district regulator (the a strong, sound and sustainable rural households’ sanitation CAO). In this role, the SAS is supported by a sub-county market. A diagrammatic representation of the structure is regulatory committee and the parish chiefs under him. presented in Figure 3.2 below.

Figure 3‑2: Structure of the Proposed Regulatory Function

District Executive Council

Regulator (CAO)

Regulatory Committee (District)

Regulator (SAS)

Regulatory Committee (Subcounty)

Parish Chief

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The following are the key responsibilities for which the sanitation market and had their employees trained in the regulator is accountable: construction of improved facilities, but after six months • Maintaining a register of recognized and trained of implementation, only 10 were still active, the rest entrepreneurs and other service providers operating having dropped out due to various reasons. Based on the in the market. experiences from the pilot, outlined below are the attributes • Developing and maintaining a forum for informally of an ideal entrepreneur for the sanitation market: resolving disputes between participants in the • Possesses business acumen, is able to appreciate market as and when they arise. The regulator, the potential of the rural sanitation market and is working with the regulatory committee, should willing to take the risk to invest in the market and develop a mechanism for identifying repeat to do what it takes to grow the business such as offenders of below-standard solutions or services marketing, working with the district to grow the to maintain the confidence of all players, especially demand for products, and being flexible. Most of that of consumers. Although this was not done the entrepreneurs who dropped out did so because in the pilot phase, there is need for the regulator the business did not grow as rapidly as they expected, to provide oversight of the dealings between and most were not willing to invest in growing the entrepreneurs and the consumers, as the their market. They were further discouraged when entrepreneurs are introduced to the communities households preferred to purchase sanplats to by the DLG, which also assists them to market improve their existing latrines than commissioning their services. new complete toilets which are more expensive. • Determining and disseminating to firms, other • Possesses reasonable experience in the construction service providers as well as other participants in the of improved latrines, preferably in the rural area. market, the minimum standards acceptable in the Although under the pilot several entrepreneurs market for sanitation products and services; were trained, there may not be enough budget to • Monitoring and compiling reports about the take this to scale, so entrepreneurs with the essential performance of the market, and the various entities skills would be preferable. participating in the market on a regular basis. • Reasonably experienced in making precast cement • Setting up a forum for all stakeholders to review and slabs as well as sanplats. discuss the performance of the market, constraints • Have the capability to manage several construction and challenges, and possible solutions. sites concurrently, especially in areas where the availability of entrepreneurs is very limited. Under the pilot, most of the activities were carried out by the Assistant District Health Officer or the District Health Where the entrepreneurs may be difficult to find, trained Inspector, with the CAO performing the oversight role. masons operating as partnerships or as individuals may be the easiest substitute. In Mityana district, some trained 3.3.3 The Role and Attributes of the Entrepreneur masons who did not have resources individually operated The entrepreneur is any person interested and able to collectively and were able to mobilize the resources necessary invest the resources required in the business of producing to acquire equipment to enable them handle construction and delivering sanitation solutions demanded by rural of improved latrines to the satisfaction of rural households households. At the start of the program, several masons as well as the district local government. were trained but most of them did not establish sanitation businesses as they lacked capital, and so the program In other cases, trained masons stepped in and filled the sought out established entrepreneurs, including building vacuum created by the lack of entrepreneurs by offering contractors, firms making pre-cast concrete products, guidance to households who bought a cement slab or hardware merchants and cement dealers. A total of 30 a sanplat, which the mason then fitted to the pit and entrepreneurs showed interest to participate in the rural proceeded to build the superstructure.

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Where they are available in communities, trained masons household would be seeking to borrow to finance the can be very effective, resources being available, as they have purchase and installation of a sanplat or slab. a deeper reach than the average entrepreneur, who may find (iii) Interest rates: Annual interest rates charged by it too expensive to go deep in the countryside to construct different banks vary from 18 percent to 22 percent on a single latrine for a household. It was noted during the reducing balance. pilot phase that entrepreneurs preferred to receive several (iv) Loan term: The maximum repayment period allowed orders for facilities in one community and did not respond by most of the institutions is three years, which is to where there was only one or two orders. On the other adequate for the needs of targeted rural households. hand, a mason can go deep into the countryside and may (v) Collateral requirements: Main collateral types not be put off by an order to construct a solitary latrine, as required include group guarantees (for group loans), it may be the most he can handle at a time. personal guarantees from reputable persons such as local council (LC) chairmen and teachers, chattels 3.3.4 The Role of Financial Service Providers including livestock, and land title (or Bibanja) As already noted, most of the rural households are small- agreements. scale farmers whose cash flow is dependent on the harvest (vi) Repayment installments: It is the practice of financial seasons. Under the model, financial institutions (FIs) play service providers to align repayment installments to the dual role of financing rural households who need to borrower’s cash flows. Accordingly, repayments of pay entrepreneurs with whom they contract to build their rural households are structured to coincide with the improved latrines, as well as providing working capital times when they harvest their farm produce. They are finance to entrepreneurs who may find themselves short of given a grace period to allow them time to harvest and capital as a result of increased volume of orders arising from be able to sell their produce. the enhanced activity in the sanitation market. (vii) Other requirements: Some financial service providers require rural households to provide bills of quantities There are some financial institutions willing to participate (BoQs) for the proposed latrine construction project. in the sanitation market, but under the pilot the level of borrowing for sanitation was very low. The institutions Apart from these financial institutions, rural households can willing to lend for household sanitation include Opportunity access loans from savings and credit cooperatives (SACCOs) Bank Ltd, Centenary Bank, Post Bank Uganda Ltd and and village savings and loan associations (VSLAs), which FINCA. Although most of these institutions do not have are readily available in the rural areas. loan products specifically designed for sanitation, they have a home improvement loan which can be used for the 3.3.5 The Role of Central Government construction of an improved latrine. Post Bank Uganda Ltd The central government, through the MoH and the MWE, is one of the few banks that currently offer a WASH loan sets policy and standards for sanitation, and also provides for the construction of water and sanitation facilities. technical assistance and oversight to the DLGs. Accordingly, though indirect, the role of the central government in the The main features of the loan products on offer from these rural households’ sanitation market is critical, and includes financial institutions include: the following interventions in the market: (i) Lending products: Some of the financial service • Through the ministries of Health and Water and providers offer only the individual loan product, Environment, the central government supports while others offer both the individual as well as the the districts to carry out technical training of group loan product. entrepreneurs and masons responsible for the (ii) Loan size: While the minimum loan amount for some production and delivery of sanitation products and financial institutions is UGX 50,000, others lend up services; to UGX100,000. From experience, these amounts • Through the ministries of Health and Water and are adequate to cover the minimum loan that a rural Environment, the central government builds the

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capacity of the local governments to carry out entrepreneurs to give them a chance to market their services demand creation and community sensitization, in during community triggering or follow-up activities. The particular the CLTS initiative that helps accelerate demand generation activities going on in all the districts demand creation among rural households. using either CLTS or home improvement campaigns • The central government is also responsible for provide an opportunity, which if exploited, can contribute raising resources to increased funding to the to a faster growth of the market for improved sanitation. districts for implementation of the activities. • The MoH is responsible for developing a To implement the different activities for setting up monitoring system for the market and should the market, it will be necessary to revise the district develop a benchmarking mechanism to gauge the guidelines for the USF project as well as the guidelines performance of DLGs in promoting improved for the District Sanitation Conditional Grant. The two sanitation. USF districts, Katakwi and Amuria, found it difficult to • The central government is also responsible implement new activities using the project funds due to for setting standards for improved sanitation the stringent guidelines. technologies and should explore low-cost, durable technologies through the Appropriate Technology One of the main activities in the pilot program was to Centre under MWE. convince the entrepreneurs that rural sanitation can be a • The Uganda National Bureau of Standards profitable business if they are willing to get lower profit (UNBS) is responsible for enforcing standards and margins but serve many more people. Although some will be responsible for quality control of the plastic entrepreneurs were able to appreciate this, and were products. The quality of the concrete products is willing to make an investment to grow their business, controlled by the DLG through the regulator. some entrepreneurs considered their involvement as a social contribution. They were not willing to make any 3.4 Results from the Pilot investment in marketing, as they thought that they were At the start of the pilot program, there was no organized assisting the DLG, which should be obligated to market market for rural sanitation in the four districts. The model their services. Further, some entrepreneurs did not always was well received by all stakeholders, although many of the respond to service requests from communities, which the entrepreneurs later dropped out. After the pilot, the four district workers found frustrating. districts have a framework around which to organize the market facilitated by the DLGs. The framework offers an Three of the most active masons in Mityana district are opportunity to integrate improvement of supply with the members of a drama group that has been promoting different demand generation which has been ongoing for some time. development issues, including better farming methods and For sustainable development of their markets, the four use of antenatal services. The group has been widely used DLGs will have to continue to play a role to facilitate the by different partners. The masons use every opportunity relationship between the private sector and the consumers, they get at different gatherings to talk about sanitation supporting the private sector to reach the consumers through and to market their services. This is a good example of demand generation and marketing until the market is well mainstreaming sanitation in other district programs. established and can grow organically. Deo Mbatenda is a smalltime contractor in Mubende It took time to convince the district workers that they need district whose main source of income is working on to intervene in the market and that they should actively small contracts for the DLG, constructing school promote the private sector, despite the fact that the private toilets and drainage. Under the sanitation market sector is driven by profits. This was not entirely successful pilot, Deo has diversified his customer base and has in all the four districts, and there were several missed established a concrete casting yard. He is now selling chances when the districts did not plan together with the slabs and sanplats to rural households.

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Although the pilot program tried to address the challenge of Gender household financing, this was not very successful and much In Uganda, the burden of poor sanitation falls more financial education is needed to change the attitudes disproportionately on women who are responsible for of the communities towards FIs. Banks also need to do maintenance of sanitation in the home and taking care of more to accommodate rural consumers, including the pre- the sick. The implementation of the demand generation conditions before community members can be eligible to activities targeted both men and women, with the intention access a bank loan. For example having an account with the of getting open defecation free communities. The demand bank, which they are required to open at the bank offices generation activities included encouraging female-headed sometimes located far from the community; and the paper households to improve their existing latrines and to access work required to be submitted and evaluated before a loan financing from participating financial institutions. Afew is approved. Many rural households complained that it is of the women in Mityana district borrowed money to quite expensive to get a bank loan due to the transport costs construct improved toilets, but they preferred to borrow and the fees they have to pay to the bank before they secure from their village saving schemes and not from the banks. the loan. Centenary Bank in Mityana has tried to be more accommodating by going out to the communities thereby Although it was the intention to target female entrepreneurs reducing on the transport costs. during the pilot phase, only two female-owned enterprises were found in the pilot area and there were no female masons. The table below shows the changes in access to improved Therefore only two female entrepreneurs participated sanitation reported by the districts following implementation in the pilot. One of the entrepreneurs constructed three of an integrated program of demand generation using latrines before dropping out of the program, while the CLTS, BCC and the rural sanitation market model. second entrepreneur is still active and had sold 90 slabs by December 2014. The actual implementation of the market model started in June 2014, after training of the entrepreneurs, although the 3.5 Implementation Costs CLTS and BCC activities started much earlier in August Under the TA, costs were incurred for the different studies 2013. After six months of the implementation of the market carried out, for the development of the behavior change model, three entrepreneurs had sold 257 slabs, while three communication (BCC), for the demand generation using entrepreneurs had constructed 33 complete pit latrines. CLTS and BCC, and for the implementation of the market model. The table below presents the costs for the implementation of the demand generation activities using CLTS and BCC, and for implementation of the model, to serve as a guide for replication in other districts.

Table 3.1: Access to Improved Sanitation in Pilot Districts District Access to improved sanitation at Access to improved sanitation (December 2014) baseline (September 2013)

Katakwi* 9 % 35%

Amuria* 3% NA**

Mityana 31% 38%

Mubende 25% 43%

* Uganda Sanitation Fund supported district Field Survey Data ** Amuria district has not yet collected the data.

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Table 3.2: Pilot implementation costs in four The implementation of demand generation and market districts activities in the four pilot districts cost an estimated UGX Item Implementation 434,966,000 (USD 164,000). Costs (UGX) Demand Generation 3.6 guideline for Setting up the Rural Sanitation Market under the Model 1. CLTS triggering and follow-up 60,000,000 in 160 villages* Setting up the sanitation market under the model involves a number of decisions and activities that include carrying 2. BCC Activities out a series of preliminary actions to get stakeholder buy- a. Mass Media for 5 months 140,000,000 in, capacity building for entrepreneurs and masons and on two local radio stations generating demand for improved sanitation, which would and three regional stations integrate marketing activities for available services and b. Drama (16 shows) 12,266,000 products. Market Development 1. Stakeholder meetings at district 89,700,000 The diagram below provides an overview of the and sub-county levels implementation of the program. 2. Training of masons (120) and 133,000,000 entrepreneurs (30) 3.6.1 Preliminary Activities To minimize barriers and increase the chances of success, * WSP only supported CLTS triggering and follow up activities in Mityana and the district has to carry out preparatory activities, including Mubende districts. The production of materials, e.g. posters, should be done at national level for buy-in meetings with key technical and political officials economies of scale. to pave the way for a smooth beginning to the market.

Figure 3‑3: Overview of the integrated sanitation program

Supply STEP 1: STEP 2: STEP 5b: Improvement Preliminary activities: Capacity building of Introduction of • Market survey entrepreneurs and entrepreneurs • get stakeholder buy masons and FIs to in and set targets communities

STEP 5a: CLTS STEP 4: Follow-up Implementation Community triggering of triggered communities

BCC STEP 3: STEP 5c: STEP 6: Implementation BCC campaign BCC Campaign: BCC Campaign: • Awaken phase • Empower phase • Sustain phase • Inspire phase • Engage phase

Preliminary activities Capacity building and start Demand generation and Sustaining behavior of demand generation linkage of service providers with community

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It is important for key district officials to have a clear enthusiastic to participate, although their systems are quite understanding of the whole sanitation program, including stringent and need to be relaxed to accommodate a larger its objectives, activities, targets and timelines. To begin with, rural audience than they do right now. Many regional the district will need to consider assigning the Assistant entrepreneurs have little dealings with the rural people District Health Officer (environmental health) or the and a lot has to be done of the market potential in rural District Health Inspector (DHI) or any other relevant officer sanitation, which may not be accomplished at this meeting. to coordinate all the activities to set up the market. The They need a separate meeting to take a closer look at the coordinator will be responsible for monitoring all planned business opportunities. activities to ensure that all activities are performed on a timely basis, and to follow up with all partners, especially In addition to introducing the market, the workshop the private sector to ensure that they remain engaged. encourages participants to discuss every aspect of the model, including the roles that different actors are expected to play 3.6.2 Carrying out a Market Survey in the market to ensure that stakeholders fully understand It is important to carry out a rapid market analysis in the the roles that they are expected to play in the market. district to establish the existing sanitation practices, the types of facilities, the sanitation needs of the communities Although this workshop may be sufficient, experience from and the availability of competent entrepreneurs. The the pilot has shown that it is beneficial to have a follow up findings may not differ greatly from those from other areas, meeting for the district executive committee (DEC) for them or the findings of the market analysis carried out in 2012 to better understand the model, so that they can explain it to by PATH, but different regions in Uganda have different the district council. A similar workshop should be held at the characteristics that may need to be addressed in the market, sub-county level for the sub-county leadership. such as areas with collapsing soils, which need different technological options. 3.6.4 Appointment of the Regulatory Committee Under the market model, the market regulator is the 3.6.3 Organizing a District Stakeholder’s Workshop district’s chief administrative officer (CAO) supported One of the first activities in setting up the market under by a regulatory committee. Members of the committee the model is organizing a district stakeholders’ workshop. are appointed by the CAO, but the following officers are The purpose of the workshop is to formally introduce the recommended for inclusion in the team: model to district leaders, including community leaders. • Deputy CAO The workshop also brings together political as well as • District Engineer/District Water Officer technical leaders in the district, and potential partners from • Assistant District Health Officer (environmental the private sector, especially those in the construction and health)/DHI financial sectors, including bank managers and managers of • District Education Officer other financial institutions, building contractors, masons, • District Commercial Officer cement dealers and other hardware merchants. • District Community Development Officer

Discussions in similar workshops held in the four pilot At the sub-county level, the senior assistant secretary (SAS districts were enhanced by having the different stakeholders or sub-county chief) plays the role of market regulator together, bringing their experiences working with the supported by a sub-county regulatory committee. Members rural communities. The fact that most district workers are to the committee are appointed by the SAS and the following conversant with sanitation challenges in the communities officers are recommended for inclusion in the team: is a major opportunity and so is the experience of the • Health inspector FIs in dealing with rural communities. Also because they • Sub-county health assistant are always looking for new opportunities, they are quite • Representative parish chief • Sub-county community development officer

18 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Developing a Rural Sanitation Market

A copy of the Terms of Reference (ToR) for the regulatory facilities that are consistent with acceptable standards. By committee is included in Appendix 1. Under the ToR, the the end of the workshop, entrepreneurs should be able to regulatory committee at the district level is required to meet appreciate that although rural households do not have a lot twice a year, while that at the sub-county level is expected of disposable income, they can make up a big market able to meet quarterly. to generate considerable profits for them if margins are kept within reasonable levels and big numbers of households in Although the regulatory committees were appointed during need of sanitation products and services are served. the pilot phase, most of them did not hold meetings, and only a few members of the committee - the deputy CAOs, In preparing for the workshop, district authorities need the district health officers, the district health Inspectors and to have a clear understanding of the state of sanitation in the commercial officers - were active. Therefore the selection the district, the potential size of the market, the key needs of members should target employees who are enthusiastic of the community and the profile of the community to about sanitation. be served (sources of income, income levels and types of latrines used). 3.6.5 Organizing an Orientation Workshop for Regulatory Committees This workshop also gives the entrepreneurs and the By their nature, regulatory committees share with the financial institutions an opportunity to discuss with the regulator the oversight function over the various components district authorities how they can operate together in an of the market. Because of the importance of the role that integrated manner to mutually support each other to they are expected to play, members of regulatory committees achieve individual objectives. should be equipped with the knowledge that they need to play this role effectively. Some of the decisions that they are 3.6.7 Capacity Building Programs for Health expected to take include: Workers (a) Approving the minimum standards that potential Health workers play a significant role in the drive to increase entrepreneurs must satisfy in order to be appointed sanitation coverage and are the best placed to popularize to participate in district programs, and to be the use of improved sanitation facilities in the district. It is promoted by the DLG. therefore necessary to prepare them for the enhanced role (b) Review performance reports for participating that they are expected to play in the market. Some of the entrepreneurs on a regular basis and where core activities that they undertake include planning and applicable recommend appropriate action to be implementation of community sensitization campaigns taken by the regulator. (CLTS or home improvement campaigns), which seek to (c) Attend to any other matters as may from time to raise the awareness of the community and to create and time be determined by the regulator. enhance the demand for improved latrine products and services among rural households. 3.6.6 Orientation Workshop for Entrepreneurs The stakeholders’ workshop paves the way for other core Accordingly, one of the most important preparatory activities in the model, one of which is identifying and activities for the market is the equipping of health workers equipping entrepreneurs. As indicated in the structure of with the skills that they need to be effective in planning and the market, the entrepreneur has a central role to play in the implementing community sensitization campaigns. market as the lynchpin in the sanitation market supply chain. However, the pilot showed that many entrepreneurs come Health workers to be covered include district level as well on board with diverse expectations. The workshop seeks to as sub-district and sub-county level workers. In addition, bring them to a correct understanding of the rural sanitation village health teams (VHTs) have to be equipped with the market, especially the profile of the rural households they skills they need to mobilize villagers to attend community are expected to serve, and the different types of sanitation sensitization meetings, and to undertake necessary follow-

www.wsp.org 19 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Developing a Rural Sanitation Market

up actions to ensure that households are doing the things Once communities have been triggered, follow-up visits that they committed themselves to do with regard to provide a cost-effective meeting point between entrepreneurs sanitation improvement in their homes. and other service providers seeking to render latrine construction services on one hand and household heads 3.6.8 Technical Training for Entrepreneurs looking for capable contractors to build improved latrines In addition to the orientation workshop, interested for their families. In addition, for households that may need entrepreneurs or their employees have to undergo technical a loan facility to finance the construction of an improved training in construction and costing of various types of latrine, the follow-up meetings are an appropriate platform improved latrines that are affordable to rural households. to share available financial products in the market.

The other critical preparatory activity is the training of By their nature, rural households tend to be scattered; even masons, who play a vital role in the market as frontline in the more densely populated areas it takes considerable service providers in the construction of improved latrines. effort to meet them on house-to-house basis. Consequently, The absence of trained masons in communities isa as experience has shown, it can be very expensive to extend contributing factor to poorly constructed toilets as well services to them unless they are organized and are met as to the exaggerated cost of building improved latrines together, in one location. Therefore, to achieve maximum arising from the use of quantities of building materials impact, community follow-up meetings must be carefully that are much higher than necessary. Training of masons organized and good community mobilization carried helps to ensure that improved latrines are built using the out to ensure that as much as possible all households in right designs and the right building materials in the right the community-targeted are represented by the head quantities. The presence of a reasonable number of trained of the household and that entrepreneurs interested in masons creates flexibility in the market, as masons who participating in the market are invited to attend for them are able can enter construction contracts with households to market the products and services they seek to provide to directly, while those who do not have that capacity will work the community. In addition, financial Institutions should for building contractors to deliver quality improved latrines also use the same platform to share information on their conforming to the standards acceptable in the industry. products, either through their employees or by equipping district workers with knowledge which they can pass on to 3.6.9 Triggering of Communities, Behavior Change the communities. Promotion and Organizing Community Sensitization Campaigns When conducting follow-up meetings in the community, The most important activity in the rural households’ it is important to ensure that participating household sanitation market is probably the community sensitization heads that develop interest to build or upgrade their campaigns for the creation of demand for improved toilets facilities are assisted to obtain contact details of sanitations. Community campaigns serve the dual role of entrepreneurs and other service providers nearest to them awakening the rural households to the need and urgency as well as financial institutions of their choice. It is also of having a sanitation facility as well as creating demand important that health assistants and responsible VHTs for improved latrines in the community. Community create a record of such household heads for purposes of sensitization can be carried out using the community-led making effective follow-up. total sanitation (CLTS) approach. It is also important to carry out behavior change promotion, to reinforce the message from CLTS. BCC will encourage households to improve their existing latrines and also sustain the use of improved sanitation. Adequate resources should be allocated to the implementation of CLTS and behavior change promotion.

20 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Developing a Rural Sanitation Market

3.7 Potential Challenges in Setting up the Districts are having a hard time popularizing improved Market and Recommendations on How latrines and the use of cement slabs and sanplats because to Address Them CLTS messages emphasize the use of local materials in latrine During the implementation of the sanitation market construction. Once communities have been triggered and model in the four pilot districts of Mityana, Mubende, encouraged to build toilets using locally available materials, Katakwi and Amuria, there were several challenges for the it is very difficult to get them to improve their facilities different stakeholders to play their roles in the market. because local materials (non-permanent materials) are less Based on experience from the pilot program, the potential expensive than permanent materials. Consequently, the challenges in setting up the market have been identified, message conveyed by CLTS is a welcome relief, especially and recommendations have been made on how to deal to those in the community who reject the idea of spending with them. ‘much money’ on the construction of an improved latrine. Therefore, it is important, that from the triggering process, 3.7.1 District Local Government communities are encouraged to set minimum standards for The success of the model depends on the regulator and building improved latrines that can offer them the health the appointed market coordinator playing their role to benefits of improved sanitation. interest potential partners, and supporting them to access the consumers. The pilot in the four districts showed that 3.7.2 Rural Households if the coordinator lacked the support of the regulator, it There is widespread lack of awareness in the community was very hard to carry out all the activities and to keep regarding the dangers of sub-standard or the dangers of all partners engaged, as well as to hold the coordinator open defecation, and of the availability of affordable latrine accountable. Since district chief administrative officers solutions. This can largely be solved through the demand are very busy, the role of the regulator could be taken up generation process, and wide dissemination of information by the deputy CAO. on available products and services

Post Bank Loans Officer assesses the current latrine of prospective clients(Photograph courtesy of Post Bank Uganda Ltd). www.wsp.org 21 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Developing a Rural Sanitation Market

For a long time rural communities have been used to a fear of banks among the rural folk that is making them building latrines using local materials freely available in shy away from latrine loans, which would have helped to their neighborhood and labor provided freely by local fast-track coverage. They have more trust in their village village people, or at most paid for in kind. Moving the saving schemes, and they should be encouraged to get loans community from this mindset, to where a household has from them instead of the banks, although banks actually to pay as much as the equivalent of a season’s harvest to have better lending terms. The interest rates for the saving a contractor to build an improved latrine may require schemes are as high as 30 to 40 percent compared to the a considerable effort. The effort must be well-planned, interest rates of the banks at 18 to 22 percent. systematic and adequately facilitated to ensure that every village in a targeted area is reached. Communities should be 3.7.3 Entrepreneurs encouraged to adopt designs which they can afford, paying Although entrepreneurs are engaged in business unlike attention to improving the substructure (pit and slab) and masons, most of them are not used to marketing their using locally available materials for the superstructure in services. As a result, many of the entrepreneurs in the order to minimize construction costs. sanitation market in the pilot districts sat back and waited for the DLG to market them and their services, expecting It is important to note that although during surveys households to line up for their services at their premises households may show a preference for improved sanitation before they got to work. with permanent superstructures, very few are willing to construct new facilities, and the majority actually purchasing sanplats to improve existing latrines. This should “I have the capacity to operate eight construction be clearly communicated to the entrepreneurs; and more sites concurrently but am not doing any right now attention should be paid to the promotion of improving the because there is no demand for my services” substructure, including the floor, than promoting whole Mathias A., NF Enterprises, Katakwi units of toilets.

The widespread use of subsidies and free facilities in the past is affecting the uptake of improved latrines, and may The districts have very limited resources, and cannot take be a barrier to improving coverage if it is not addressed in on the role of marketing entrepreneurs, who should be able time. Although the government policy is not to subsidize to invest in marketing their services and take advantage of household sanitation, the presence of free slabs and or all available opportunities to do so, including participating sanplats in some communities, from NGOs, reinforces in community follow-up meetings, or using village health the free things mentality and fuels speculation that teams as their sales agents. government will soon come to distribute these inputs free of charge. As a result, instead of engaging with service Many entrepreneurs such as James quoted in the box below providers to build improved latrines, villagers end up believe that villagers don’t have money to pay for their delaying the decision indefinitely. services, and in some cases, this belief is making many lose hope in this segment of the population as a viable market Information available from national surveys indicates that for their services. the rural poor spend most of their income on necessities, and have little disposable income which they are reluctant to spend on a latrine. Due to the excessive publicity given “Many villagers don’t have money to pay for our to court bailiffs engaged in attaching and auctioning services and are only hoping to get some after the properties of loan defaulters, there is a misconception harvest of their maize” among rural households that borrowing money from the bank will lead to seizure of their assets. This has created James, Obalang, Amuria

22 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Developing a Rural Sanitation Market

This is further exacerbated by the fact that the rural Regionally-based entrepreneurs incur substantial overheads communities have very little cash flow outside the harvest once they travel to communities from their areas of seasons. Therefore, demand generation and marketing of operation. These overheads can be offset if they can get services need to be properly planned to coincide with the substantial orders from one community. This is not always time communities plan for the income from their harvest, the case, which makes it economically unviable to serve some or payment methods need to be flexible and communities of the communities. Trained masons in communities could supported to solve their cash flow problems through be encouraged to form groups and pool resources to meet payment of facilities in produce, part payments or use of community needs. Sub-county workers could maintain a financial products. list of orders which they can pass on to entrepreneurs once they get to an acceptable number.

Rural Latrine with semi-permanent structure and hand washing tippy tap.

www.wsp.org 23 IV. Key Recommendations

Districts have done a good job across the country in 2. Capacity Building: There is a critical need to sensitizing communities on the need of a latrine. This is carry out comprehensive capacity building. The evident from the high number of rural people (90 percent), sector has identified capacity gaps for demand who have access to latrines. Unfortunately, many of these generation and improving the supply, and latrines are not improved and are little more than fixed prepared a capacity building strategy to address open defecation points. The Government of Uganda the gaps including strengthening the enabling therefore would like to encourage the rural people to climb environment. Over the next few years this should the sanitation ladder and improve their facilities. This be financed and implemented to adequately equip objective will not be achieved without a robust market for local government workers with skills and resources rural sanitation and improved programmatic conditions. to facilitate the development of the rural sanitation The following recommendations, based on the lessons from market, especially to bridge the gap between the the pilot program, are made to support the development of demand generation which is currently being a sustainable rural sanitation market at scale: implemented, and the improvement of the supply 1. Finance: Finance is a major constraint to the side. The sector should also establish a sustainable development of the market. The income of system for capacity building, especially through the rural people, most of whom are farmers, is the training institutions. low and seasonal, therefore if they are to access improved sanitation, the sector has to assist them For sustainable development of rural sanitation, it to access alternative financing from financial is necessary to ensure that the Ministry of Health, institutions. The rural sanitation market cannot especially the environmental health division be developed without a well-established system (EHD), has adequate capacity to support the local of credit to the households and working capital governments and to provide oversight to the sector. financing for the sanitation entrepreneurs. This Several recommendations were made under the will require sector partners to work closely with capacity building strategy, including elevating the financial institutions to carry out financial literacy environmental health division to a department and and for the financial institutions to adjust their increasing the number of employees. The strategy operations to accommodate the rural community also recommends training for the EHD workers to and the entrepreneurs. equip them with the technical capacity to support demand generation and market development in Since communities seem to prefer borrowing from the country. village saving schemes than from banks, the village saving schemes should be encouraged to participate 3. Product: The sector is promoting concrete slabs in the sanitation market to offer financial services and sanplats, and the experiences from the pilot to the communities, where they exist. are for concrete products, but the lack of more affordable, accessible products that meet the In addition to addressing household financing, the household needs (durable, easy to clean and government needs to increase the sector financing sealable) is still a major constraint in the market. and allocation for sanitation to the districts to The sector should explore the possibility of other support the market development and all the technologies, such as plastic technology, which do activities needed to set up the market. not have some of the shortcomings of the concrete products. They are easy to move, so the transport

24 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Key Recommendations

costs incurred by households will not be as high as 5. Sustainability and scale: For sustainable for those of concrete products; they are easy to fix development of the sanitation market, there is and unlike concrete products, existing plastics such need for continued engagement of the private as water containers, have a well-established supply sector. This will only be achieved if the market chain convenient to rural households. is profitable and at scale. At the current level of financing for sanitation and implementation, it is 4. Monitoring: For Uganda is to develop a robust difficult to achieve scale, therefore over the next rural sanitation market, the sector needs to develop few years the sector should work on mainstreaming a comprehensive monitoring system for market sanitation, especially the creation of demand, into development, addressing both the demand and the nationwide programs, for example the new World supply aspects, so as to identify and address any Bank nutrition project and the government- challenges and issues of inequity. implemented National Agricultural Advisory Services (NAADS) Program, to leverage their reach and resources.

Figure Household that Benefitted from Post Bank Sanitation Loan with Latrine near completion. (Photograph courtesy of Post Bank Uganda Ltd).

www.wsp.org 25 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 1: List of Products Developed Under this Technical Assistance Annex 1: List of Products Developed Under this Technical Assistance

Title Type Date

Enabling Environment Baseline Assessment Report August 2013 for Sustainable Rural Sanitation and Hygiene at Scale: Uganda

Rural Households Sanitation Survey (Pilot Report September 2013 Districts)

Sanitation Behavior Change Communication Communication Materials and January 2015 Strategy (Kayonjo) Guidelines

http://www.wsp.org/toolkit/uganda

Capacity Mapping for Rural Sanitation in Report August 2014 Uganda

Capacity Building Strategy Strategy (Final Draft)

Sanitation Learning Questions and Charter September 2013

Qualitative Research Findings for the Report May 2015 Plastics Field Testing in Uganda

Audit Report on Sanitation Management Report January 2014 Information System in Uganda

District Monitoring Form for CLTS Excel Data Collection Form October 2012 Monitoring

District Monitoring Form for CLTS Excel Data Collection Form October 2012 Facilitators’ Training

CLTS Training Report for School of Hygiene Report March 2013 Tutors

Mid-term Evaluation on Hand Washing with Analytical Report August 2012 Soap Campaign

Hand Washing With Soap Behavior Change Communication Materials and May 2015 Communication Strategy Guidelines

26 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 2: Terms of Reference for Regulatory Committees Annex 2: Terms of Reference for Regulatory Committees

1. Introduction and improvement. Many households in Uganda do not The level of safe sanitation coverage in Uganda is still low, necessarily lack awareness about the need for a latrine, with the national latrine coverage standing at 71 percent but do need better latrine products and services delivered as of June 2013 (Sector Performance Report 2013). In through more efficient and cost-effective means. The study terms of improved sanitation, coverage is much lower, it therefore, recommended a shift from broad, generalized is estimated that only 35percent2 of the rural population approaches to focusing on more catalytic activities to has access to improved sanitation. Consequently, the need stimulate market development, alignment, and linkages to to improve access to improved sanitation in the country is build stronger household sanitation delivery mechanisms. more urgent than ever before, especially as it remains one of the biggest development challenges faced by the country Consequently, a process has been started to develop a rural right from the national to the district level as well as the household sanitation market, in such a way as to ensure sub-county and parish levels. One of the key obstacles to that the market is clearly defined, communication easily improving rural households’ sanitation in Uganda has been flows between different players, and that constraints faced the absence of a well-structured sanitation market, which by rural households are routinely addressed in a manner would have eased the acquisition of affordable improved that can be sustained. sanitation facilities by rural households. In keeping with best practice, and to ensure that stability is In a bid to address the situation, the Ministry of Health, achieved and maintained in the rural households sanitation commissioned a study in 2012, to carry out a market analysis market, on a sustainable basis, the district council has of rural sanitation in some districts of Uganda. The study provided for the position of a regulator, who will serve the found a series of constraints in the household sanitation public interest by guiding the growth and operation of the supply chain that were undermining the development of an market to ensure effective regulation and protection of enabling, efficient and sustainable market environment. customers’ interests without compromising the interests of other participants through among other things: Among other things, the study observed that the household • The factors that shape the market trends (the sanitation market in Uganda was “undefined, undeveloped, influence on market development by the lacking coordination along the sanitation supply chain; involvement of the local government, taxes, the with entities acting in isolation, and having no formal effect of high or low demand and supply) and communication with each other”. Right from manufacturers taking action to ensure proper development of the to distributors, sales, installation and services, the players did market to serve the rural poor. not seem to be in communication. The study also observed • Identifying and resolving on a timely basis, the that actors in the sanitation supply chain had not invested in problems in the market as they arise. building sanitation solutions for rural households because • Ensuring that all participants including the they did not consider this segment of the population to be entrepreneurs, suppliers and the communities a viable market for their products and services. comply with laid down laws, rules and regulations.

The study underscored the significant opportunity To maximize the effectiveness of the regulatory function, to leverage the current basic latrine coverage to grow provision has also been made for the creation of business opportunities for household sanitation provision regulatory committees, both at the district level and at the sub-county level, for the purpose of complementing 2 The Joint WHO/ UNICEF Monitoring Program Report - 201310 Building Capacity the efforts of the regulator. for Sanitation - P132078 - Ethiopia Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 2: Terms of Reference for Regulatory Committees

It is against this background that these ToR have been The regulator will provide for the promotion of ethical created to guide the operations of regulatory committees business conduct, prohibitions against fraudulent and and the conduct of the members of the committees as they manipulative conduct, and the establishment of high play their role in this regulatory function. standards for suppliers of inputs and labor. The regulator will also provide for the vigorous enforcement of government 2. Structure of the sanitation market and the laws, market rules and regulations. This will, among other roles of the main players in the market things require putting in place the following systems: Structure of the market • A system for guiding the development of fair, The market consists of three main players - the rural honest, and orderly market practices, providing for household as the customer, the entrepreneur as the service responsibility and accountability of entrepreneurs as provider (including suppliers of inputs and intermediate well as other service providers and communities. service providers) and the district leadership (including • An effective system for monitoring compliance the district level as well as the lower level local government with government laws as well as market rules and leadership) as illustrated in Figure 1 below. regulations. • A sound mechanism for enforcing laws, rules and Roles of the main players in the market regulations. (a) Regulator The main role of the regulator in the rural households’ (b) The entrepreneur sanitation market shall be to develop and maintain a The main role of the entrepreneur in the rural households’ conducive environment for the market and to ensure that sanitation market is to produce and deliver to the household, the market is safe, sound and orderly. quality products and services demanded by the household, on a timely basis.

Figure 1: Structure of the proposed rural households’ sanitation market

District Leadership

Sensitization, Demand Creation: CLTS, BCC

Licensing

Quality Inspections

Construction contracts Entrepreneurs Rural Households Service delivery

Sub-contract

Service delivery

Service Providers

28 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 2: Terms of Reference for Regulatory Committees

(c) The rural household 3.2. Duties and responsibilities of the regulator The main role of the household in the rural households’ Some of the key responsibilities for which the regulator is sanitation market is to consume the sanitation products expected to be accountable are: and services supplied by the market, and pay on a timely • Identifying and nominating qualified persons to basis for the value received. constitute the regulatory committee for approval by the district executive committee. 3. The regulatory function • Maintaining a register of certified entrepreneurs and 3.1. Structure other service providers operating in the market. The regulatory function consists of various officers and • On a regular basis, review reports about the performance structures playing different roles all aimed at building a of firms operating in the market as well as reports strong, sound and sustainable rural households’ sanitation about their compliance with the market’s rules and market as indicated in the organogram (Figure2) below. regulations. • Initiate and execute investigations of possible violations The regulatory function is headed by the regulator (the of the markets standards, rules and regulations, and district chief administrative officer (CAO)) reporting to the determine possible remedial action or actions to be district executive committee (DEC). taken against perpetrators. • Develop and maintain a forum for informally resolving At the sub-county level, the senior assistant secretary (SAS) disputes between participants in the market as and is the officer responsible for the regulatory function in the when they arise. sanitation market reporting to the district regulator (the • Determine and disseminate to firms, other service CAO). In this role the SAS is supported by the sub-county providers as well as other participants in the market, regulatory committee and the parish chiefs under him. the minimum standards acceptable in the market for sanitation products and services.

Figure 2: The structure of the regulatory function

DISTRICT EXECUTIVE COUNCIL

REGULATOR (CAO)

REGULATORY COMMITTEE (DISTRICT)

REGULATOR (SAS)

REGULATORY COMMITTEE (SUBCOUNTY)

PARISH CHIEF

www.wsp.org 29 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 2: Terms of Reference for Regulatory Committees

• Identify and determine appropriate action to take in • District education officer mitigation against potential as well as real threats and • District commercial officer imperfections observed in the market’s operations. • On a regular basis, monitor and compile reports about At the sub-county level, the following membership is the performance of the market, and the various entities recommended: participating in the market and in particular: • SAS The conduct of firms operating in the market • Health inspector/health assistant and other service providers with regard to • Representative parish chief adherence to laid down standards, rules and regulations. 4.2. Role of regulatory committees The extent to which the sanitation market The main purpose of putting in place regulatory contributes to sanitation coverage within the committees in the regulatory function is to support areas under the jurisdiction of the market. the regulator, by attending to sensitive matters and Trends in consumer tastes and demand for decisions that are best handled by a corporate decision- sanitation products and services provided by making process. the sanitation market. The extent to which the sanitation market is 4.3. Term of membership addressing challenges and constraints in the Membership to the regulatory committee will run for a sanitation supply chain. period of three years. The committee will be dissolved The frequency of reported violations of market at the completion of their term, and the appointing ethics by participants in the market. authority will appoint a new team. Innovations and investments in new technologies. 4.4. Duties and responsibilities of regulatory Movements in prices and fees charged on the committees sanitation market for sanitation products and The main duties of the regulatory committee are: services. (a) Approving the minimum standards that applicants Access and utilization of financial services by must satisfy to be enrolled as partner entrepreneurs for participants in the market. purposes of the rural households’ sanitation market. Any other developments that can affect the (b) Approving entrepreneurs recommended to operate operations of the market positively and negatively. as the district’s partner entrepreneurs (DPEs). Partner entrepreneurs enjoy the special privilege 4. Regulatory committees of being included in the district’s community 4.1. Appointment of members of regulatory mobilization activities including radio programs committees and all activities of the Tofuuka Mbozi campaign. Members of the regulatory committee shall be (c) Review appraisal reports about the performance of appointed by the regulator, with the express approval entrepreneurs operating in the market and where of the district executive committee. When fully necessary recommend appropriate action against constituted, the committee shall be comprised of any entrepreneur whose performance may be members that are not less than five, but not more found to be below standard. than seven. It is recommended to have the following (d) Attend dispute resolution proceedings as and members on the committee: when arranged. • Assistant CAO (e) Attend to any other matters as may from time to • District engineer/district water officer time be determined by the regulator. • Assistant district health officer (environmental (f) Carry out periodic field monitoring of the market. health)

30 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 2: Terms of Reference for Regulatory Committees

5. Meetings of regulatory committees 6. Other provisions 5.1. Frequency of meetings 6.1. Disclosure of monetary interest The sub-county level regulatory committee shall Members appointed to the regulatory committee meet at least once every three months or as required, should declare any situation that has the potential to depending on the volume and urgency of the business be a conflict of interest or could interfere with them to be transacted as agreed by the members. The district carrying out their functions with integrity. In this regulatory committee shall meet twice a year, or as regard, no member shall be expected to vote on any required. transaction in which he or she has an interest.

A member may cease to be a member if he or she is found to be directly or indirectly interested in any transaction and fails to declare the nature of his or her interest.

www.wsp.org 31 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 3: Brief Guide for Setting up the Market Annex 3: Brief Guide for Setting up the Market

Setting up a rural sanitation market in a In addition to establishing the market, the resolution district should provide for the appointment of the CAO as regulator for the market, reporting to the DEC. The District Brief resolution should also provide for the appointment of regulatory committees by the regulator, at the district Introduction and the sub-county levels Establishing a sanitation market in a district, will involve carrying out a series of preliminary activities including a 1.3. Appointing and inducting members of regulatory district stakeholders’ workshop. This pamphlet seeks to give committees for the market: Immediately after a condensed version of the key activities to be undertaken. the council resolution is out, ensure that regulatory Setting up the market can be divided into three phases: (a) committees are appointed and arrange for their the preparatory phase (b) the implementation phase (c) the induction meeting. During the meeting, lead the consolidation phase. members through a review of the ToR and ensure that they understand their roles. During the same meeting, 1. Phase I: Preparatory phase have the committee discuss and develop a work plan 1.1. Preliminary activities and the district stakeholders’ that will guide their efforts in their work. workshop: To maximize chances for a smooth and successful start and operation of the market in a 1.4. Identifying and mobilizing willing financial district, it is necessary to hold briefing meetings with institutions for the market: Immediately after the key leaders in the district so as to obtain their support stakeholders’ workshop, draw a list of the major for the initiative and their support for the workshop. financial institutions operating in the district and draw a program to visit them individually starting As part of the preparations for the workshop, identify with those institutions that were represented at the the key stakeholders to be invited, including political workshop. For each financial institution, discuss the and civil society leaders, district heads of department, business opportunity that the model presents for the entrepreneurs and willing financial institutions and institution, and the task ahead for the DLG, and the extend invitations to them accordingly. role that FIs are expected to play in the model3.

In preparing the main presentation for the workshop, 1.5. Preparing health workers: In addition to the council ensure that the content is able to motivate stakeholders resolution, efforts should be made to prepare health to support the establishment of the market and workers to carry out community mobilization. In this ensure that the workshop comes up with a resolution regard, environmental health workers should be skilled committing the district to implement the proposed in triggering communities using CLTS and should model and that a team is nominated to work with be equipped to support the implementation of the the CAO’s office to prepare a motion upon which the ‘Tofuuka Mbozi’ behavior change communication. council will base its decision to pass the resolution.

1.2. Passing the district council resolution: Immediately after the conclusion of the workshop, commence arrangements to draft and table a motion before the

district council proposing the establishment of a 3 Annex 2: The Role that Financial Institutions are expected to play in the Model – A formal sanitation market in the district. brief

32 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 3: Brief Guide for Setting up the Market

2. Phase II: Implementation phase very profitable if well served. After the induction, select 2.1. Implementing ‘Tofuuka Mbozi’ behavior change a few of the most promising and invite them to attend communication campaign: To support the demand a technical training that involves practical training in generation for improved sanitation, the district should building acceptable designs of improved latrines. implement the “Tofuuka Mbozi” BCC, according to In addition to training entrepreneurs, arrange training the guidelines, starting with phases 1 and 2. for masons coming from across the district and instruct them in the procedures involved in the construction of 2.2. Triggering communities for ODF: Working with the various designs of improved latrines. Environmental Health (EH) Workers, VHTs and natural leaders, carry out triggering of target audiences 2.4. Following up triggered communities: Develop and to encourage them to become open defecation free implement a program for the follow up of triggered (ODF). It is important that enough follow-up is communities. Using health assistants and VHTs and carried out of the triggered communities. At the first natural leaders, publicize the program among the follow-up meeting, extend invitations to entrepreneurs targeted communities. Mobilize partner entrepreneurs to attend the meetings and give them a chance to and willing financial institutions so that they may talk to the communities, to market their products prepare themselves for the program. and services. At the same meeting, communities should be given information about available financial 2.5. Linking entrepreneurs and FIs to the communities: products for those who cannot afford an improved As soon as the technical training of entrepreneurs and toilet. The financial information can be shared by a briefing meetings with willing financial institutions are representative of the financial institution, who can be completed, brief them about the program to link them invited to attend the meeting or it can be shared by to triggered communities. Have them agree which the environmental health workers if they are given the one will cover which community. Determine which relevant information by the financial institution prior of the willing financial institutions will cover which to the meeting. If the financial information is to be community and advise them accordingly. The linkage shared by environmental health workers, ensure that program will run alongside the follow-up program for they have all the relevant information. The financial triggered communities. institution can have a session with the environmental health workers to share the information. 3. Phase III: Consolidation phase 3.1. Implementing ‘Tofuuka Mbozi’ campaign and 2.3. Identifying, inducting and equipping triggering communities for ODF: Continue the entrepreneurs and masons for the market: ‘Tofuuka Mbozi’ campaign and the process of triggering Immediately after the stakeholders’ workshop, identify communities for ODF which commenced in the entrepreneurs who may have the interest to participate earlier phase. in the construction of rural sanitation facilities and have them attend an induction program. The objective of 3.2. Stakeholder workshops to review progress made: The the induction meeting is to better explain the market last major activity in the cycle, is the review workshop. model and the profile of the rural community in the After the first six months, organize a stakeholders’ district. It is important for entrepreneurs to understand workshop to review the progress realized by various that while rural people may not have much money and actors in the market. Note the challenges experienced hence their need for affordable prices, their collective as well as initiatives undertaken in mitigation and the demand constitutes a big potential market, and can be recommend best way forward.

www.wsp.org 33 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 3: Brief Guide for Setting up the Market

Setting up a rural sanitation market in a 3. Main features of the ideal loan product required: district As their main source of income is subsistence farming, rural households’ cash flows are seasonal, coming in at The role of a financial institution in the model the harvest time after the sale of their produce. This means that the ideal loan product will have to allow for 1. Background: In its endeavor to improve sanitation a repayment installment that is not weekly or monthly, coverage on a sustainable basis, the district is but is either half yearly or yearly. implementing the Rural Households’ Sanitation Market Model under which financial institutions have In addition, since the amounts saved from subsistence a critical role to play. The model seeks to move rural farming are relatively small, the ideal loan product will households from unhygienic sanitation practices to the have to allow for a loan term that exceeds 12 months, use of improved toilets that are cleanable, sealable and ranging from two to three years. Since most rural durable. households may not own the kind of commercial property that is acceptable collateral for a loan from While it has been possible for rural households to FIs under normal circumstances, the ideal loan build a traditional latrine using freely available local product will accept a group guarantee and or a kibanja materials and locally available labor without having to purchase agreement that are within the means of a rural pay cash for the service, the situation is different for household to arrange. improved toilets that have cement or a sanplat as a core component, which have to be paid for in cash. 4. Support from the community: Due to the small amounts involved, it may not be cost effective for an Since they may not always readily have the cash FI to deploy a loan officer to travel a long distance required, households seeking to improve their existing to appraise a solitary loan applicant. In mitigation, latrines as well as those seeking to build an improved a FI may utilize the services of environmental health latrine from scratch may need the support of financial workers or VHTs (village health teams) residing within institutions embark on the project immediately. the community, to follow up households in need of a loan, and assist them complete loan application forms, This brief seeks to inform willing financial institutions and deliver them to the FI once the minimum number (FIs) about the business opportunity that comes with acceptable is realized. This way, transaction costs for this development, and gives a brief profile of the the FI can be reduced to the minimum possible. targeted rural households, including their sources of income as well as the type of loan products needed and 5. Getting started: The most appropriate entry point for the kind of support the district can give the financial the FI is participation in a community sensitization institution to minimize transaction costs. meeting, which the district will organize as a follow up meeting to communities that have been triggered 2. Brief profile of the rural households targeted: The to sensitize them about the dangers of unhygienic typical household seeking finance to build an improved sanitation practices, seeking to move them to the use of latrine is domiciled in the countryside and in many improved toilet facilities. cases the remote rural setting. At these fora, questions normally arise regarding lack of The household head, who will be the borrower, is mostly access to finance, making it a perfect setting for introducing economically active, earning on average more than a financial institution and its products and services. UGX1,000,000 annually from subsistence farming, most of which is spent on food items, healthcare and Once the introduction is made, the FI can address education, leaving a small balance that is not sufficient to the community and arrange a separate meeting with cover capital expenditure such as latrine construction. HAs (health assistants) and VHTs during which they

34 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | Annex 3: Brief Guide for Setting up the Market

can be trained to represent the FI in the community Alternatively, the FI may choose to deploy a loan officer by explaining the sanitation loan and how it can be to the community who will explain the loan products, accessed, and the applicable terms and conditions that applicable terms and conditions, and the application loan applicants are expected to satisfy to access the process. If the community demonstrates interest in taking desired loans. up sanitation loans, the loan officer may leave behind loan application forms with the VHTs, who will be instructed as to how households should be assisted to complete and submit the loan forms to the FI for processing.

www.wsp.org 35 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | References References

Coombes, Y., & al., e. (2012). Economic Impacts of Poor Sanitation in Africa. Water and Sanitation Program.

Danielle Pedi, P. K. (2012). FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation. Water and Sanitaton Program.

Henrietta Bullinger; Ronnie Rwamwanja. (2013). Enabling Environment Baseline Assessment for Sustainable Rural Sanitation and Hygiene at Scale in Uganda. Study Commissioned by WSP.

Kamasan, A., & Smets, S. (s.f.). Obtenido de http://wsp.org/sites/wsp.org/files/publications/Presentation-Susanna-Smets- Business-Development.pdf

PATH. (2012). Analysis of the Sanitation Supply Chain in Rural and Small Towns in Uganda, WSP, 2012. Work Commissioned by WSP.

Pillai, P., & al., e. (2009). Environmental Sanitation in Uganda; Addressing the Institutional and Financial Challenges. World Bank.

UNICEF/ WHO. (2013). Joint Monitoring Report.

Water and Sanitation Program. (2014). Making Toilets More Affordable for Cambodia’s Poor Through Microfinance. International Bank of Reconstruction and Development.

36 Strengthening the Enabling Environment to Scale up Rural Sanitation in Uganda: Developing a Rural Sanitation Market in Uganda | References

www.wsp.org 37 September 2015

Water and Sanitation Program

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