Partnering with Ethiopia’s Private Sector for Market-Based Sanitation
By Dagim Demirew, WASH Business Development Associate Director, PSI
Local small businesses in Ethiopia play a significant role in flushing away the country’s sanitation woes. The big win: these businesses recently hit a major milestone—selling their 100,000th toilet to a household in Ethiopia. Through two USAID-funded multi-year initiatives, Transform WASH and Feed the Future Growth through Nutrition, Population Services International (PSI) has been supporting these local businesses to introduce a broad range of affordable sanitation products and services to local markets
WHAT EXISTED BEFORE
Prior to the launch of the two projects—Transform WASH in 2017 and Feed the Future Growth through Nutrition (GTN) in 2016— there was virtually no sanitation market serving rural and peri-urban communities. Previous ‘sanitation marketing’ projects focused only on selling expensive concrete slabs and relied on inexperienced businesses. The product and service offerings were not viable for businesses, were undesirable for many households, and lacked potential for scale.
A NEW APPROACH
The projects have worked in more than 80 woredas (districts) across 9 regions. Learning quickly that the old approach of focusing on concrete slab manufacturing resulted in low quality products and low sales, the team adapted by expanding delivery models to a range of products and services that suited various customer segments. The team recruited experienced entrepreneurs and business partners, selected based on their interest and capacity, and introduced lower-cost improved sanitation innovations, such as the SATO pan that automatically seals to eliminate odors and flies.
With the introduction of SATO pans, small business and service providers, such as masons, became pivotal players in the supply chain. These actors offered simple upgrades and installation services for existing unimproved toilets. Transform WASH’s basic toilet upgrade model—the most popular among newly introduced models—entails masons conducting door-to-door sales of SATO pan installation services.
GETTING TO 100K TOILETS
Reaching 100,000 toilets in sales was no easy feat. Besides early challenges with product quality, the team had to overcome stakeholders’ skepticism about using market-based solutions for public health challenges as well as negative community expectations stemming from a history of projects providing free handouts. Transform WASH and GTN transcended these challenges by focusing on customer needs, flexible business models, and business profitability. WASH sector actors have embraced this success and Ethiopia’s Ministry of Health and cross-sectoral ONEWASH National Programme have incorporated the new approaches into the National Market-Based Sanitation Guideline.
Sales and access to basic sanitation services have also been heavily impacted by both national and global events, including the COVID-19 pandemic and internal conflict. While consistently growing over time, sales trends among project business partners have fluctuated—i.e., alternating rise and fall in sales—as depicted in the chart below.
During the first three years of market development activities, sales tripled every year, peaking in February 2020. This trend suggested sales would continue increasing until the onset of the rainy season in June. However, sales declined by 150%, from 4,276 in February to 1,700 in April 2020 due to the onset of the pandemic. The toilet market has just recently recovered from the effects of the pandemic.
SUPPORTING MARKET RECOVERY
To support market recovery, PSI-Ethiopia introduced the DQ Sales® method, an approach developed by PSI’s partner, Whitten and Roy Partnership, that helps customers better understand their sanitation problems and the financial and social cost of those problems. Project staff were trained in this approach and in turn built the capacity of business partners, typically the mason toilet installers, to use the DQ Sales® approach to execute effective door-to-door promotion and sales. Using this approach, one out of every three engagements with a potential customer result in a sale.
Following the introduction of the DQ Sales® approach, sales rose rapidly from June until November 2020, at which point the security situation in the Tigray and Benishangul Gumuz regions forced an end to toilet sales in those regions. The expansion of the conflict to the West Oromia and Amhara regions (North and South Wollo) in September 2021 also correlated with a decrease in sales in the following month.
Due to the expanding conflict, the projects lost 40% of their implementation territory. However, in other areas, the sanitation market was well established and continued to thrive. As of writing this, post-conflict areas, such as South Wollo in Amhara Region, are experiencing rapid market recovery.
100,000 toilets have given nearly half a million people access to basic sanitation, though there is a long way to go to achieve universal access. The achievement of this milestone proves that, despite significant external challenges and shocks, that market-based sanitation efforts can create a resilient market in Ethiopia that will continue to accelerate toilet sales into the future.
About Transform WASH
USAID Transform WASH aims to improve water, sanitation and hygiene (WASH) outcomes in Ethiopia by increasing market access to and sustained use of a broader spectrum of affordable WASH products and services, with a substantial focus on sanitation.
Transform WASH achieves this by transforming the market for low-cost quality WASH products and services: stimulating demand at the community level, strengthening supply chains, and improving the enabling environment for a vibrant private market.
USAID Transform WASH is a USAID-funded activity implemented by PSI in collaboration with SNV, Plan International, and IRC WASH. The consortium is working closely with government agencies, including the Ministry of Health, the Ministry of Water, Irrigation and Electricity, the One WASH National Program, and regional and sub-regional governments.
About Growth through Nutrition
USAID Feed the Future Ethiopia Growth through Nutrition Activity was a five-year (2016-2021) multisector nutrition and Water, Sanitation, and Hygiene (WASH) project which aims to improve the nutritional status of women and young children in Ethiopia. The project works with the Ministries of Agriculture and Livestock resources; Health; Water, Irrigation, and Energy; and Education at all levels to strengthen institutional capacity and influence policy to improve nutrition. Save the Children leads the implementation of the project in collaboration with six international and five local partners. PSI is one of the international partners.