Cell phones and the making of Africa’s water sector

Published February 25th, 2016

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Insight from Christopher Gasson, GWI publisher

I have been in Nairobi this week for the African Water Association Congress. I was there to host a Global Water Leaders Group event, but the real revelation for me was the way in which mobile phones are revolutionising the way water utilities work in Africa.

Two thirds of Africa’s population now owns a mobile phone, and those who don’t have one generally have some arrangement to access one if required. In the past, I have compared this to the miserable level of piped water penetration: around 35% of households in sub-Saharan Africa have access to piped water in the home. I have not really seen the opportunity in the growth of the mobile phone industry. Water is heavy, and mobile phones can’t treat or transport it.

The truth is, however, that managing the wet stuff is the easy bit. Getting the money side to work is the real challenge, and that is where mobile phones come in.

Water utilities, particularly in Africa, have been very badly set up to take money off people. The typical process in Africa requires sending someone round to look at a meter, the reading being registered in a system which eventually spews out a bill, which is sent by post to the customer, who might then go round to a payment kiosk to hand over some cash to a clerk who may be honest enough to pay it into the utility’s bank account. It is a tortuous process in which so much can go wrong. It is also one which is completely at odds with the way very poor people manage their money. Few of them have enough cash to get them through the week, let alone settle a hefty bill at the end of the month. Even fewer of them can put together the lump sum to afford a domestic connection in the first place.

Mobile phones are changing all of this. The Nairobi City Water and Sewerage Company allows users to set their own billing cycles to just a day or two if they wish. They can use date-stamped photos on their phones to read their meters. They can spread the cost of a new connection across their bills over three years. More than half of the utility’s customers pay their bills through their mobile phones using M-Pesa, the virtual currency system which facilitates money transfers via text message.

In short, mobile phones are driving the cashflows of Africa’s leading utilities, whilst reducing the cost of servicing the poor. Our Africa editor Emilie Filou will be writing up a more extensive report on this in the March issue of Global Water Intelligence magazine.

It is going to transform the rate at which the African water utility sector can grow. This is exciting, but one has to remember that – unlike the rest of the developing world – water tariffs in sub-Saharan Africa are generally high enough to cover costs. Without that, improving the efficiency of the system would bring little additional benefit.