Marketing sanitation through result based financing

Improved sanitation and hygiene services integrated with potable and adequate water supply services are a critical factor in deciding the health of a nation. Indeed, it estimated that lack of or inadequate provision of these services is capable of undermining the achievement of targets set for MDGs 1, 2, 4, 5 and 6. Whilst most countries are on course to achieving MDG target for water, the same cannot be said of sanitation and hygiene. or example Ghana’s achievement is at 13% whilst 20% of the population defecates openly. The economic and health impact of this situation cannot be underestimated. The Water and Sanitation Programme (WSP) estimates that Ghana loses GHC42 million annually in terms of health, lost in labour and productivity caused by lack of, and,  or inadequate sanitation and hygiene services.

Putting everyone back on-track the MDG target for sanitation requires development and implementation of innovative but effective programmes involving sector players with a capacity for replication across the country. This would require creating marketing strategy for sanitation which would reduce the gaps/ loop holes in project implementation. Dealing with this requires changing the way most projects have been funded and adopt a result based approach. A result based financing (RBF) approach would influence policy makers to prioritize sanitation sector investments through an incentive scheme

With result based financing funding is provided if pre- specified results have been achieved. This means that there are limited incentives to reduce the cost of providing services because funding is based on an input basis. The approach ensures that cash is given on delivery of results. Result based approach targets suppliers to provide them with an incentive to provide services to the poor .

The full amount of funds is paid to the service providers only when results have been achieved and verified by a third party. Subsidies are also provided to encourage provision of basic services to the poor in areas that are not commercially attractive.

Note:

›RBF instruments have the potential to improved the sanitation sector’s focus on results and performance verification.
›RBF instruments are new and largely untested particularly in the sanitation sector.
›Going forward we need to invest great care in the design of the instruments and evaluate the costs and benefits of such schemes in comparison to traditional forms of financing
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