Attachment 8_AID-696-A-16-00008 Isuku Iwacu Market Analysis FINAL.pdf

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Submission Date: May 30, 2018

Contract Number: (+25)0788300960

Submitted to: SEAN KERRIGAN, National Director

WORLD VISION, INC. (WVUS)

Submitted by: Willy MUTABAZI

Managing Director REHOBOTH MMW COMPANY Ltd.

B.P.: 3386 KIGALI-RWANDA

Tel: + 250 0788 30 09 60 Email: recommmwcompany@yahoo.fr

ISUKU IWACU

FINAL REPORT FOR THE SUPPLY CHAIN,

MARKET, AND CONSUMER NEEDS AND

PREFERENCE ANALYSIS

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Investigator Team from Rehoboth MMW Company Ltd.

1. Mutabazi Willy, Co-investigator

2. Ntakarutimana Amans, Principal Investigator

3. Rwirahira John, Senior Economist and Market Surveyor

4. Museveni Songa, Finance Manager

Acknowledgements

We would like to thank the ISUKU IWACU program team for facilitation and guidance throughout this assessment. Its technical and administrative support is highly appreciated.

We acknowledge the contribution and support from different experts, including, MININFRA, MoH, WASAC, SNV, World Vision, Water for People and private sector operators as well as the districts, sectors, cells, and villages from which data were collected. Most importantly, we would like to thank the respondents in their different categories, who agreed to take part in and contribute to this study. Their rich and invaluable contribution has been crucial in drafting this report.

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List of Acronyms

AQUASAN AQUA Sanitation OSS Organic Solutions

BPR Banque Populaire du Rwanda PEA Pit Emptier Association

BK Bank of Kigali PPP Public Private Partnership

BDS Business Development Services PSF Private Sector Federation

BMO Business Member Organization RDHS Rwanda Demographic Health Survey

CBEHPP Community-Based Environmental Health Promotion Program

RRA

Rwanda Revenue Authority

CBO Community-Based Organization RRSA Rwanda Rural Sanitation Activity

CBNP

Community-Based Nutrition Program

RURA

Rwanda Utility Regulation Agency

CSR Corporate Social Responsibility program

SaaB Sanitation as Business Program

CHC Community Health Club SACCO Savings and Credit Co-operative

CHW Community Health Worker SDGs Sustainable Development Goals

DHS Demographic Health Survey SFH Society for Family Health

EDPRS Economic Development and Poverty Reduction Strategy

SNV

Stichting Nederlandse Vrijwilligers (Netherlands Development Organization)

EICV Integrated Household Living Conditions Survey

UNICEF

United Nations Children Fund

FGD Focus Group Discussion USD United States Dollar

GOR Government of Rwanda VIP Ventilated Improved Pit

HWF Hand-Washing Facility VSLAs Village Saving and Loan Associations

JMP Joint Monitoring Program WATSAN Water and Sanitation

KII Key Informant Interview WASH Water, Sanitation, and Hygiene

MDGs Millennium Development Goals WASAC Water and Sanitation Corporation

MINECOFIN Ministry of Finance and Economic Planning

WHO

World Health Organization

MFI Microfinance Institution

NGO Nongovernmental Institution

NISR National Institute of Statistics of Rwanda iv | P a g e

Executive Summary

The main objective of sound sanitation and hygiene practices is to improve health and socioeconomic conditions of communities, especially those that are more deprived. This study focused on household sanitation markets, supply chains, needs, and preferences in four of eight districts covered by the ISUKU IWACU project: Kicukiro, Ruhango, Nyabihu, and Ngoma.

The main objective of this study was to provide an understanding of the current capacity of sanitation business players (and their activities) to meet the interests and needs of the consumers (households), with the aim to inform interventions under the Isuku Iwacu project.

More specifically, this study intended to: better understand consumer needs and preferences, type of sanitation products and services available, mapping consumers in view of identified needs, preferences and purchasing patterns, mapping sanitation supply, value chain actors, and type of potential products and services available in four selected districts. In addition, it identified gaps or constraints and opportunities faced by the market (consumers and suppliers) and determined the linkages between business actors, hygiene and sanitation service providers, and local authorities.

This executive summary presents the key findings on a range of aspects analyzed in this report.

Consumers

Generally, households have expressed the need for having sanitations products/materials and construction services available in their respective villages at affordable costs to improve the status of their latrines

Households, especially those in first and second Ubudehe categories (a home-grown development program in which citizens are placed into different categories. These categories inform the level of support they receive through government social programs), own unimproved latrines (pits without slabs). Most have expressed the need for upgrading their latrines for improved hygiene and health, but need financial support and easy access to sanitation products.

Constraints/Barriers

The findings revealed that poverty has been reported as the main constraint to access appropriate sanitation, followed by the lack of awareness of specific soil features such as poor solid characteristics, in Ruhango and in Nyabihu.

Sanitation ownership and preferences

The findings show that the commonly owned type of latrine is pit latrine, and most were reported to be in very bad condition. The findings also revealed that the most preferred v | P a g e types of latrines are mainly the decent pit latrines and Ventilated Improved Pit latrines.

The main reasons for pit latrine preferences include low cost, easy of construction, accessibility and availability of construction materials, and they do not require running water.

Saving groups Households have strong adherence to saving groups if these groups are well organized and coordinated. The saving groups offer loans and social support to members without a required guarantee. This provides an important opportunity for improving access to sanitation products and markets.

Key actors providing sanitation products and services

Most of the manufacturers of latrine components are located mainly in Kigali, and are involved in producing latrine pans, steel, zinc sheeting, and PVC piping, most of which are imported from Thailand and China. Construction materials such as sand, gravel, bricks, tiles, doors, steel, and cement are produced locally in all the districts covered by this study. The study could not identify the concrete producers that make slabs.

Wholesalers/retailers are engaged in the supply of sanitation products to households.

However, a limited access to finance leads to limited capital, and therefore limits demand for sanitation products and services. This was reported as one of the main challenges facing communities.

Other challenges reported by the respondents included low profit margins, limited involvement of local leaders, and poor road networks, especially in rural areas.

Most masons do not have the skills to effectively provide sanitation services, and most are not familiar with the sanitation business. Indeed, the findings suggest that even the few skilled masons are shifting from sanitation to general construction, where they are likely to work for extended periods and earn more money. This also highlights a lack of specialization in sanitation related services.

Marketing and sales promotion needs

Overall, there was poor knowledge of need for and use of adequate strategies for marketing. The use of T-shirt was the only marketing strategy used in areas such as Ruhango. This calls for building the marketing strategy capacity of business actors.

Women in sanitation business

According to the Rwandan culture, sanitation and hygiene responsibilities at the household level typically fall to women. However, the findings from this study show that only 15% of women are involved in sanitation businesses. This implies that they should be assisted in entering the sanitation business sector.

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Study results show that local leaders and private sector companies are less involved in sanitation market facilitation. The supply chain for sanitation products and materials is fragmented. Even though existing sanitation actors along the supply chain are selling different materials, no one sells a complete package to make full latrine.

Sanitation businesses don’t consider themselves part of the sanitation supply chain even if they unknowingly play an important role, as most rely on selling other items. Findings revealed there are no businesses fully and exclusively committed to sanitation products/ materials and services. This signals lack of business specialization.

Even though concrete slabs are meant to play an important role, the findings from this study revealed that no readymade slabs are available on the market (The prefabrication of concrete for sanitation, such as concrete slabs, is not practiced in Rwanda). Along those same lines, findings show concrete producers do not primarily intend to serve the sanitation market, but construction demand in general.

Sources of funding for sanitation

The findings of this study highlight two main sources of funding sanitation services: self-financing, through which households use own income to pay for sanitation services, and loans that come primarily from savings groups, community health clubs, and financial institutions. Limited financial capacity was highlighted as the main challenge for both households and sanitation business operators. Limited financial capacity, coupled with the low prioritization of sanitation facilities, negatively affect the demand side of the sanitation market.

This study revealed that financial institutions are ready to fund sanitation projects, though no specific sanitation-related loan products are available in their current loan portfolios.

Financial institutions also have expressed concerns about loan repayment (high risk investment), as target beneficiaries are generally poor with no guarantee (U-1 and U-2).

Despite challenges related to access to financial services, financial institutions such as Guaranty Trust Bank (GT) have introduced commendable initiatives that facilitate client access to loans through mobile banking. This is an opportunity for remote client, that was requested through focus group discussions with savings groups in Ngoma district.

In line with the above findings, the following recommendations are proposed:

• Linkages among different players and actors for improved household sanitation services and practices.

• Strengthening institutional arrangement and capacity for supporting the improvement of household sanitation through community based sanitation market services.

• Strengthening the capacity of actors and players at all levels of the sanitation supply chain. Special emphasis needs to be on sanitation marketing strategies and grant management skills, raising consumer awareness of product options and costs, demand and supply chain, business model strategies, financial education vii | P a g e and loan management, and how to improve the design, availability and supply of affordable sanitation products and services.

• Household and community mobilization through existing structures such as village and saving groups or Community Health Club approaches, which use peer pressure, mutual assistance, and consensus, as a mechanism for promoting sanitation practices and dialogue. Other initiatives for increasing demand for sanitation services would include promoting group loans (a loan provided to a group of individuals based on mutual insurance der to limit risk of default), assisting vulnerable members of the community, establishing a sanitation committee at the village level to monitor and report on household sanitation practices, and strengthening saving groups and cooperatives at the village level.

• Ensure the availability of sanitation service and products by training and equipping local artisans/masons in villages with skills to offer adequate sanitation services to households (building low-cost designs for different types of latrines adapted to specific local features, and producing ready-made slabs, doors, windows, tiles, latrine covers, hand-washing facilities, and more).

• Mobilize retailers/wholesalers and sensitize them on forming cooperatives for more credibility, and ensure that sanitation products, such as iron sheets, plastic pipes, nails, and soaps are available.

• Group households as service beneficiaries and services providers (local artisans/masons and retailers/wholesalers) in cooperatives or other groups to increase credibility and therefore, increase access to finance. Group insurance serves as collateral for the accessing loans from financial institutions. Along those lines, it is recommended to advocate for financial institution loan packages that are dedicated to boost the sanitation market. This would contribute to improving community purchasing power while increasing investment in the sanitation sector.

• Ensure sustainability of acquired safe sanitation practices, by involving local leaders. This is crucial. Leaders’ roles primarily will be to monitor and ensure that their sanitation outcomes are maintained by reporting and addressing potential challenges and raising community awareness on sound sanitation practices.

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Table of Contents

Acknowledgements .............................................................................................................ii

List of Acronyms ................................................................................................................. iii

Executive Summary ........................................................................................................... iiii

Table of Contents .............................................................................................................. vii

List of Tables ........................................................................................................................ x

List of Figures ....................................................................................................................... x

1.Introduction

1.1. Brief contextual background on sanitation

1.2. Global sanitation targets

1.3. Sanitation market in the region context

1.4. Overview of sanitation demand and supply

1.5. Sanitation in the Rwandan context

1.6. Public-private partnership in sanitation in Rwanda

1.7. Study objective

2.Methodology

2.1. Study area

2.2. Study design

2.3. Study procedures

3. Study Findings and Analysis

3.1. Consumers

3.1.1 Consumers categorization

3.1.2 Motivations and drivers

3.1.3.Constraints/barriers and facilitators

3.1.4 Current product use and preference

3.1.5. Communication and access to information

file:///C:/Users/user/Downloads/Final%20Report%20ISUKU%20iwacu%20analysis%2030%20May%202018.docx%23_Toc515430028 ix | P a g e

3.1.6. Saving groups

3.1.7. Isuku Iwacu prioritized consumers

3.2 Key Actors Pproviding Sanitation Products and Services

3.2.1 Manufacturers of latrines components

3.2.2. Providers of sanitation products and construction materials

3.2.3. Service providers

3.2.4. Marketing and sales promotion needs

3.2.5 Isuku Iwacu prioritized businesses

3.3. Other Sanitation Players

3.3.1 Local government

3.3.2. Nongovernmental organizations

3.4 Government and Other Institutions’ Perceptions and Recommendations

3.4.1 Central level perceptions and recommendations

3.4.2. District level perceptions and recommendations

3.4.3. Sanitation services perceptions and suggestions from community level

4. Latrine Costs and Consumers’ Willingness to Pay

4.1. Types of willingness

4.1.1.Willingness to pay for improved sanitation

4.1.2. Cost of latrine materials

4.1.3 Transportation costs

4.1.4 Labor costs

4.2. Total latrine cost versus the willingness to pay

5. Access to Finance and Business Development Services

5.1 Financial institutions

5.2. Sanitation lLoan products

5.3 Existing financing mechanisms

5.4. Business development fund services

6. Overall Gaps, Constraints and Challenges

7. Summary of Findings and Conclusions x | P a g e

8. Recommendations and Revisions

9. References

10. Annexes

List of Tables

Table 1. Selected districts and selection criteria applied Table 2. Selected sectors for data collection on consumer needs and preferences Table 3. Problems of households to access appropriate sanitation Table 4.Type of latrines households use per district Table 5. List of potential saving groups to partner with Isuku Iwacu Table 6. Marketing and sales promotion strategies Table 7. Sanitation services, perceptions, and suggestions at macro level per institution Table 8.Sanitation services at community level Table 9. List of sanitation and hygiene products and materials locally available Table 10. Willing to pay for a latrines Table 11.Material prices in different districts (suppliers’ average selling price), in RwF . 34 Table 12. Fees charged per day to build latrines for each of the 3 categories of masons in RwF Table 13. Financial institutions in support of sanitation business Table 14. Challenges related to having latrines and coping strategies for households to circumvent those challenges

List of Figures

Figure 1. Roles of stakeholders in the development of individual sanitation projects Figure 2. Study area Figure 3. Motivating/driving factors of consumer demand for sanitation products and services 15 Figure 4. Challenges for the private sector actors (facilitators) Figure 5. Types of latrines preferred collected from sanitation professionals in the four districts Source: Data from this study, October 2017 Figure 6. Types of latrines preferred as collected from wholesalers/retailers in the four districts ......................................... Error! Bookmark not defined.

Figure 7. Types of latrines preferred collected from sanitation professionals in the four districts Figure 11. The most-used methods of financing sanitation project file:///C:/Users/jdesoto/Desktop/Isuku%20Iwacu%20Market%20Analysis%20FINAL.docx%23_Toc519001355 file:///C:/Users/jdesoto/Desktop/Isuku%20Iwacu%20Market%20Analysis%20FINAL.docx%23_Toc519001355 file:///C:/Users/jdesoto/Desktop/Isuku%20Iwacu%20Market%20Analysis%20FINAL.docx%23_Toc519001356 file:///C:/Users/jdesoto/Desktop/Isuku%20Iwacu%20Market%20Analysis%20FINAL.docx%23_Toc519001356 file:///C:/Users/jdesoto/Desktop/Isuku%20Iwacu%20Market%20Analysis%20FINAL.docx%23_Toc519001357 file:///C:/Users/jdesoto/Desktop/Isuku%20Iwacu%20Market%20Analysis%20FINAL.docx%23_Toc519001357

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1. Introduction

1.1. Brief contextual background on sanitation

Water, sanitation, and hygiene (WASH) are important for human health, well-being, and development (Bartram &Cairn cross, 2010). The impact of poor water, sanitation, and hygiene on health and quality of life are widely known. Diarrheal illnesses are the No. 1 cause of sickness and death among African children, with 20% of children under 5 suffering from diarrhea. An estimated 10,000 deaths occurred in Africa in 2015 because of poor sanitation and hygiene. The economic loss resulting from poor sanitation is estimated at a staggering $448 million USD annually, averaging 7% of sub-Saharan gross domestic product in the same year (Kov et al. 2016).

The world has always valued provision of drinking water and improved sanitation facilities as one of the most important pillars for improving health. In September 2015, the United Nations launched the Sustainable Development Goals (SDGs)—a set of 17 goals and 169 targets for shaping world development agenda over the next 15 years. Water and sanitation has been one of the goals under the MDGs and remains one under the SDGs. The aim is to ensure access to water and sanitation for all by 2030 (United Nations, 2015). Since 1990, 2.6 billion people have gained access to improved water sources and 1.9 billion people have gained access to improved sanitation. However, WASH still presents an overwhelming demand, with 663 million people lacking an improved water source and 2.4 billion people without improved sanitation

(WHO/UNICEF, 2015).

Based on this, improving access to sanitation is a global health priority. Currently, various market-based approaches offer promising strategies to address issues related to access to water and sanitation Market-based approaches have become increasingly recognized within the sector, including sanitation marketing to accelerate access to sanitation.

In line with that, this report summarizes the findings from an extensive analysis on the supply and demand of sanitation materials and services. It also provides recommendations to refine sanitation interventions in Rwanda.

This market and consumer analysis was conducted as part of the Isuku Iwacu–Rwanda Rural Sanitation Activity (RRSA), which is a four-year rural sanitation project awarded on September 2, 2016, and estimated to be completed by November 9, 2020. The project is being implemented by a consortium of nongovernmental organizations headed by SNV, and including World Vision International and Water for People, in the following eight districts: Kayonza, Kicukiro, Ngoma, Nyabihu, Nyanza, Nyarugenge, Ruhango, and Rwamagana.

The overall goal of the Isuku Iwacu project is to increase local ownership and capacity to deliver sustainable, high-quality sanitation and hygiene services to decrease childhood stunting. To accomplish this goal, Isuku Iwacu will improve access to and support correct, consistent use of household sanitation and hygiene facilities by (1) directly supporting and contributing to the government of Rwanda-led efforts to improve access to sanitation in Rwanda, and (2) promoting district-wide, private sector-driven household sanitation and hygiene interventions and district-and national-level capacity development.

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To ensure quality data and reporting, data collection was conducted in collaboration with World Vision and SNV teams, which not only supported mobilizing local leaders and community members to participate in the study, but also provided inputs and comments on the draft report.

1.2. Global sanitation targets

The new ladder for global monitoring of sanitation incorporates a higher level of service that considers the safe disposal and treatment of human waste. In 2015, 2.9 billion people used a safely managed sanitation service, defined as a basic facility that disposes of human waste.

Another 2.1 billion people used a basic service, or an improved facility that is not shared while, 600 million people used a limited service, or an improved facility shared with others (UN-SDGs Report, 2017).

To address sanitation issues, especially in sub-Sahara Africa, governments in partnership with various stakeholders developed creative national sanitation policies that create an environment conducive to improving access to water and ensuring proper sanitation and hygiene in rural and urban areas (NSPS, 2016).

More specifically, Rwanda, through the newly approved water supply and sanitation policies and their implementation strategies, has committed to reach 100% access to water and sanitation by 2020, and to implement Sustainable Development Goals by ensuring sustainable access to water and sanitation for all by 2030 (NSPS, 2016).

Universal access to water and sanitation is a human right and an important factor to reach the intended health outcomes as reflected in the government of Rwanda’s long-term development plan, commonly known as the Vision 2020.

According to the WHO/UNICEF Joint Monitoring Program (JMP) report, an improved sanitation facility is defined as a latrine not shared with other households and where excreta is safely disposed in situ or removed to be treated off site (JMP/WHO, 2016). Further, the WHO/UNICEF Joint Monitoring Program for water supply and sanitation indicates that as of 2015, Rwanda had achieved 76% basic sanitation facilities coverage with about 22% of the population using unimproved sanitation facilities, and some 2% still practicing open defecation (WHO/UNICEF

JMP, 2017).

The RDHS indicates that 54% of households have access to an improved, not shared sanitation facility. However, improved sanitation facilities coverage varies by district, and the coverage is higher in urban areas (57%) in comparison with rural areas (42%) (RDHS, 2015).

1.3. Sanitation market in the regional context

Sanitation market studies in Kenya showed that while governments have robust public policies and programs to promote sanitation services, the market is fragmented and market-based services are limited. The demand (individual, household, community, and institutional users) and supply of services (latrines, sewerage network, liquid waste transport services, etc.) are variable (Evaluation of Sanitation program in Kenya, 2016).

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More specifically, in line with creating markets and opportunities, the IFC’s Safe Water and Sanitation for All (SSAWA) program in Kenya works with entrepreneurs to enable them to reap the benefits of “open innovation,” by positioning them to look beyond their own boundaries to gain access to ideas, knowledge, and emerging technologies in water and sanitation (Water and sanitation for all, Kenya, 2017).

In the past five years, the sanitation as a business program has piloted franchising, micro-franchising, sanitation entrepreneur’s network, and intermediary agents’ approaches to scaling up.

The franchise model had considerable success in Uganda, albeit for apparently suboptimal relationships and change-of-mission issues. However, a network model involving business member organizations (BMOs) and intermediary agents such as TEECs tried in Malawi did not achieve much success.

This evaluation found that the franchise model appears to be most likely to drive market-based sanitation services and is recommended for the region.

The lessons learned from Uganda should inform prototyping and rolling out such a model in other countries. A network model involving Pit Emptier Associations (PEA) is yet to prove the viability and sustainability needed to be recommended for the region.

It was recommended by SaaB (Sanitation as Business program in Kenya) to differentiate sanitation service levels, e.g., first movers, second movers etc., and tailor market facilitation according to the needs at every level. The program enhancing access to safely managed water and sanitation services should shift the strategy from a supply- to a demand-driven supply chain network. This would focus on promoting a limited range of products and services and developing appropriate partnerships for a functioning sanitation services market (Evaluation of Sanitation program in Kenya, 2016).

1.4. Overview of sanitation demand and supply

Sanitation marketing is an emerging field that applies social and commercial marketing approaches to scale up the supply and demand for improved sanitation facilities. This entails the understanding what products the target population desires and what price they’re willing to pay for them, components such as the marketing strategy, communications campaign, and implementation are also critical to the design and implementation of effective program.

The slowness in improving sanitation in many areas may be explained by several reasons that include poverty levels (limited financial resources), technology, regulatory, institutional, and political will (Isunju et al., 2011; Kariuki, 2011).

Overall, the understanding of the local demand help identifying appropriate drivers and attributes to be used in promoting accessibility and usage of sanitation products. Indeed, the understanding of local context entails identifying barriers and catalysts at the different stages in the sanitation demand decision process to develop appropriate intervention strategies. Further, 6 | P a g e the demand for improved sanitation is influenced by a range of factors that include psychological, economic, cultural, historical, etc.

The supply of sanitation products and services is another critical component of the sanitation market along demand. It is generally structured around the factors such as product, price, place, promotion, policy, partnership and people. In most cases, the price of sanitation products is the main barriers for communities to access to sanitation. Communities and individual household are the consumers of sanitation products and services and therefore constitute the core demand

1.5. Sanitation in the Rwandan context

Rwanda has already made significant progress in increasing access to household sanitation, achieving 63% coverage for rural access to improved sanitation and an overall access rate of 62%.

USAID/Rwanda is supporting a renewed focus on district-wide approaches to rural household sanitation, with an emphasis on private sector engagement and improved government capacity (Isuku Iwacu PD, 2016).

According to the Rwanda NSPS (2016), the role of the government is (1) to motivate and support households, industries, and trade to improve their own individual sanitation facilities, (2) to improve the business-enabling environment for service providers (masons, constructors, shops, vacuum tankers, solid waste operators, recyclers), and, (3) to plan, invest, operate, or delegate operation of collective sanitation and solid waste services and facilities, including institutional sanitation, sewerage, and treatment plants (for wastewater, fecal sludge, and solid waste).

To achieve a goal of sustainable access to improved sanitation (SDG 6), it is important to develop two sides of the service: demand and supply as highlighted in the national sanitation policy that prioritizes demand generation, and households’ access to the services they need (NSPS, 2016).

According to the Rwanda National Sanitation Policy, top priority is demand generation through the Community-Based Environmental Health Promotion Program (CBEHPP) (MoH, 2010) of Ministry of Health by:

• Raising awareness through campaigns or education. Environmental health promotion must enhance awareness of the Rwandan population on the invisible risks related to excreta and waste, and generate or enhance demand for a higher level of hygiene practice and sanitation improvements.

• Making marketing of technical options available. Once demand is manifest, the market must respond and offer affordable and safe technical sanitation options to households and businesses for both upgrading and construction of new on-site facilities. The offer requires both comprehensive product information and the full supply chain, including advice, construction guidelines and services, materials, and access to finance to boost implementation among the lower-income quintiles of the population.

The second priority as stipulated in the Rwanda National Sanitation Policy (NSPS, 2016) is to make sure households can access the services that they demand, including:

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• Construction: Investments in construction have an important multiplier effect on income and employment. The increase in demand for industrial or semi-industrial material can provide an opportunity to develop and promote local production and substitute imports.

• Materials: Households need access to materials for building and keeping their facilities operational. Depending on the local environment and required construction standards, these materials can be cement, bricks, tiles, doors, locks, etc.

• Operation & Maintenance (O&M): To comply with the Sustainable Development Goals, the local capacity for operating and maintaining individual sanitation facilities should be increased and maintained.

• Financial Services: Improved sanitation facilities require cash for some industrially produced materials and sometimes for qualified craftsmen.

1.6. Public-private partnerships in sanitation in Rwanda

Public-private partnerships have been occurring many developing countries over the past decade. Sanitation is one area in which the government of Rwanda has streamlined the PPP model. In its sanitation policy, the government uses a triangular partnership model in which the private sector directly interacts with households. This interaction is regulated by the government by setting the prices of materials, or enforcing specific standards for sanitation. The government, on the other hand, sensitizes households to use services and products from private sector in a well-regulated market as illustrated in Figure 1.

Figure 1. Roles of stakeholders in the development of individual sanitation projects

Source: National Sanitation Policy and Implementation Strategy, 2016

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1.7. Study objective

This study aimed to provide an understanding of the current capacity of sanitation business players (and their activities) to meet the interests and needs of the consumers (i.e. households) to help refine/develop effective Isuku Iwacu’s supply chain interventions. This study intended to identify the demand typology and value, mapping consumer personal profiles in view of identified needs, preferences, and purchasing patterns.

More specifically, this study intended to:

• Create a better understanding of consumer needs and preferences.

• Map sanitation supply, value chain actors, and type of potential products and services available in four districts’ markets disaggregated type of service, product categories, location, and turnover categorization (retailers, wholesalers).

• Create a better understanding of the capacity of appropriate and prioritized entrepreneurs, businesses, and other service providers and/or actors to meet consumer demand, need and preference, and prioritization of types of products and services.

• Map sanitation financial service providers for the identified value chain actors.

• Determine the linkage between business actors, hygiene and sanitation service providers, and local authorities that can be used to enhance the business environment and advocate for and address sanitation matters.

• Identify gaps or constraints and opportunities faced by the market (consumers and supplies), including tracking the chain used to supply sanitation products, from the main suppliers to the last consumers.

• Determine the priority groups (consumer and businesses categories, labor) the sanitation financial product for Isuku Iwacu will be targeting.

2. Methodology

2.1. Study area

The study was conducted in only four of eight districts targeted by the Isuku Iwacu project, and selected based on the following criteria:

1. Geographical location: The aim was to ensure that all provinces and the city of Kigali, where the project operates, were represented in the sampled areas. Under the same criteria, rural and urban features also were taken into consideration. Geographical location is a strong determinant of sanitation (Mahama et al., 2013).

2. Access to latrines: To understand the drivers of access to latrines, different sources of information (including the Isuku Iwacu baseline survey data base and EICV4) were used to identify the districts with high and low access to different types of latrines (mainly

9 | P a g e flushing toilets and pit latrines). The sampled districts included those with high and low access to latrines1.

3. Sanitation preferences: Sanitation preferences influence the sanitation demand that may differ from one location to another and generally is influenced by specific characteristics, such as availability of sanitation skills and materials as well as the financial capacity of households.

Based on the criteria described above, the table below shows the districts that were selected.

Table 1. Selected districts and selection criteria applied

Province Selected Districts

Eastern province Ngoma

Western Province Nyabihu

Southern Province Ruhango

City of Kigali Kicukiro

Sources: Study Design

Figure 2. Study Area

Source: Data from this study, October 2017

1Details are in the inception report

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In each of the selected districts, four sectors we selected based on the following criteria:

• Ensuring that urban, semi-urban, or rural settings are represented

• Ensuring that sectors with high and low access to household sanitation are captured in the sample

• Considering population density and sanitation preferences

Based on the criteria above, the following sectors were sampled:

Table 2. Selected sectors for data collection on consumer needs and preferences

D is tr ic t

Selected sectors and rationale

Selection criteria

Urban/rural location

(NISR

database)

Population density

(NISR

database)

Access to sanitation (Isuku Iwacu data base, 2017)

Sanitation preferences (Isuku Iwacu database, 2017)

Highest Lowest Flush/flushing toilet (highest)

Pit latrine

(highest)

K ic u ki ro

Masaka (peri-urban with highest preference for flush/flushing toilet in Kicukiro) Peri-urban

71.90%

Gahanga (peri-urban with lowest access to sanitation and highest preference for pit latrine in Kicukiro) Peri-urban

90% 48.30%

Gatenga (urban with high density population in Kicukiro) Urban

48,640 people

Gikondo (urban with highest access to sanitation in Kicukiro) Urban

100%

N go m a Kazo (semi urban with highest preference for

Semi-urban 68.40%

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Selected sectors and rationale

Selection criteria

Urban/rural location

(NISR

database)

Population density

(NISR

database)

Access to sanitation (Isuku Iwacu data base, 2017)

Sanitation preferences (Isuku Iwacu database, 2017)

Highest Lowest Flush/flushing toilet (highest)

Pit latrine

(highest) flush/flushing toilet in Ngoma)

Sake (rural with highest preference for pit latrines in Ngoma)

Rural 77.50%

Rukumberi (rural with highest access to sanitation, high densely population in Ngoma)

Rural 28,560 people

100%

Rukira (rural with lowest access to sanitation in Ngoma)

Rural 88%

N ya b ih u

Bigogwe (semi-urban with lowest access to sanitation in Nyabihu) Semi-urban

84%

Rurembo (rural, with highest preference for pit latrines in Nyabihu) Rural

90.70%

Jenda (semi-urban, high density population and highest preference for flush / flushing toilet in Nyabihu) Semi-urban

34,648 people

63.20%

Kintobo (rural with highest access to sanitation in Nyabihu) Rural

100%

R u h an g o Bweramana (rural with highest access Rural 98% 67.50%

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Selected sectors and rationale

Selection criteria

Urban/rural location

(NISR

database)

Population density

(NISR

database)

Access to sanitation (Isuku Iwacu data base, 2017)

Sanitation preferences (Isuku Iwacu database, 2017)

Highest Lowest Flush/flushing toilet (highest)

Pit latrine

(highest) to sanitation in Ruhango)

Kinihira (rural with highest preference for pit latrine in Ruhango)

Rural 90%

Ruhango

(Semi-urban with high density population in Ruhango)

Semi-urban 65,700 people

Ntongwe (rural, lowest access to sanitation in Ruhango)

Rural 89%

Source: Designed from EIC4 and Isuku Baseline Survey (2017)

2.2. Study design

This study used a mixed-methods research model comprising qualitative (review of existing literature key informant interviews and focus group discussions) and quantitative (secondary data analysis and semi-structured) approaches.

2.3. Study procedures

The data collection instruments where developed, pretested, and incorporated specific research questions meant to respond to set objectives. A sample of sanitation market players (along the chain, demand and supply, sanitation products, etc.) in the selected districts was covered.

The data collection methods included:

• Desk review: To explore and better understand the current sanitation subsector in Rwanda.

This mainly consisted of reviewing the policy and strategic framework around sanitation in Rwanda and in the region as well as the potential links to the Isuku Iwacu project. Special attention was given to the Isuku Iwacu baseline survey.

• Key informant interviews: To collect first-hand information from key players in sanitation services in Rwanda, including sanitation professionals (environmental health and sanitation

13 | P a g e and hygiene officers at National, district, and sector levels, wholesalers/retailers at district and sector levels, producers/importers of sanitation products and materials). In total, 128 key informant interviews were conducted.

• Focus group discussions: To explore common attributes, underlying perceptions, and norms around sanitation services within various communities. These focused-on households as consumers and potential sanitation service providers (local artisans/masons and retailers). In total, 64 FGDs were conducted.

• In-depth interviews: to explore similar themes with individuals to deeply explore people’s opinions, attitudes, beliefs, and perceptions around household latrines, including their underlying benefits, challenges, product availability, and access. A total of 32 deep interviews were conducted.

• Observation and GIS mapping of 32 business centers: To map out the sanitation supplies and value chain actors in selected sectors in four districts while identifying existing and potential services and products for the Rwandan sanitation market. Additional information on prices was collected at each visited business center/market.

3. Study findings and analysis

3.1. Consumers

Households are the consumers of sanitation services and are responsible of their own sanitation (Rwanda National Sanitation policy, 2016). In the four surveyed districts, consumers are not satisfied with the status of their latrines due to their unsafe and unpleasant conditions. In fact, it was reported during focus group discussions that most of the latrines in the communities are not roofed, not paved or covered, unclean (many flies in the toilets), and not closed, hence not ensuring privacy.

“If we could have financial means, we would have dug toilets up to 10m, build them properly, make a good floor and, and then close them,” said a female participant in the FGDs in Ruhango.

Household representatives who participated in the FGDs expressed the need for having sanitation products/materials and construction services available in their respective villages at affordable costs to improve the status of their latrines.

“There are no roads, vehicles can’t reach the villages so that it can at least distribute the materials,” said a male participant in the FGDs in Nyabihu.

To improve the status of their latrines, community members who participated in the FGDs in Ruhango district wish to have pit latrines 10 meters deep paved with concrete, covered with iron sheets, with a door, pan, and lined wall as a standard latrine. On the other hand, in Ngoma district, preference was given to latrines that not only produce manure for farming but also user-friendly for the elderly.

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In Kicukiro, households would like to have a deep pit latrine (exceeding 5 meters of depth) with a floor paved with cement, lined wall, and roofed with tiles or iron sheets, and with a door.

Additional, it should be covered with pan. In Nyabihu district, preferences were for deep pit latrines with a ventilation pipe and door.

The wish of households is obvious, and shows the need for upgrading latrine status for improved hygiene and health. However, to acquire the type of the desired latrines, households require financial support and easy access to sanitation products (closer to communities). Raising awareness on sanitation values and solutions has been reported as crucial to improve sanitation practices.

3.1.1 Consumers categorization

The findings from the Isuku Iwacu baseline survey (2017) showed the main consumers of sanitation and hygiene products and services are members of community or households.

However, these community members in the selected districts have different social, economic, and demographic characteristics that determine their behaviors toward the hygiene and sanitation market. These are reflected in Ubudehe categories.

The baseline survey conducted by Isuku Iwacu in the eight districts showed that among the assessed households, 13% are Ubudehe 1 category, 39% are under U-2, 47% are U-3 and 1% are U-4.

According to the findings from the Isuku Iwacu baseline, the sanitation needs from U-1 and U-2 categories are similar and are aligned with having improved latrines, while those of U-3 category focus on pour/flush latrines and composting latrines, as presented below:

• U-1 and U-2 categories: Most own unimproved latrines (pit without slabs), but most prefer a pit latrine because best known. A few expressed their preference for pour/flush latrines and modern hand-washing stations (lavabo), though their affordability was an issue for many.

• U-3 categories: Most of the households falling under this category own mainly pit latrines, though most would prefer pour/flush latrines and composting latrines.

3.1.2 Motivations and drivers

The findings from this study revealed that motivations to own improved sanitation vary by individuals, and are based on wealth status/ubudehe category. Most of poor households owning improved sanitation facilities reported that the availability of resources (money) or access to finance is a big motivator and driver for owning improved saniation facilities. These results are consistent with the Isuku Iwacu baseline, where construction of a new house was the most

15 | P a g e common trigger for latrine construction, followed by sanitation and hygiene campaigns, and availability of funds to buy latrine construction materials.

Details are presented on the figure below.

Figure 3. Motivating/driving factors of consumer demand for sanitation products and services

3.1.3. Constraints/barriers and facilitators

To better understand the main constraints and barriers faced, households representatives were asked about challenges that prevent access to improved sanitation facilities. Detailed findings from the Isuku Iwacu baseline survey summarized in the table below show that poverty is the main barrier to access to saniatiton, followed by limited awareness.

These findings are consistent with the Isuku Iwacu baseline survey that showed the main barrier to wider access to improved sanitation facilities is a lack of means and resources to build and maintain improved latrines and adequate hand-washing facilities, and access clean water.

Households generally understand the importance of using improved latrines and observing good hygiene practices, but lack the finances to do so.

In this study, it was reported that reasons for low latrine ownership include: (1) issues related to landslides (latrines are dug, but after a time they are destroyed by landslides, (2) the fact that a great number of families stay in rented houses, hampering responsibilities for latrine construction, (3) poverty, and, (4) lack of sanitation materials/products.

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1. “There are some people who don’t have toilets due to landslide.”

2. “We pay house rent every month so we can’t build latrines for others’ houses.”

3. “The major challenge is poverty. If someone has money, materials can be available.”

4. “Material availability is highly limited in our area.”

- Participants in FGDs in Kicukiro and Ngoma

Table 3. Problems of households to access appropriate sanitation

The common challenges reported by the private actors’ challenges for investing in the sanitation business are limited capital, low purchasing power, and low demand. Private actors in the sanitation sector also reported that the limited involvement of local leaders who are supposed to be facilitators at district and sector levels as a big challenge.

Figure 4. Challenges for the private sector actors (facilitators)

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3.1.4. Current product use and preference

According to the findings from the Isuku Iwacu baseline, a pit latrine was the most commonly owned type of latrine.

Table 4.Type of Latrine Households Use by District

Districts

Type of Latrine

Total

A u to m at ic c is te rn fl u sh

P o u r/ m an u al f lu sh

V en ti la te d im p ro ve d it la tr in e

P it la tr in e w h sl ab

P la tr in e w it h o u t sl ab

/o p en

C o m p o st in g to ile t

H an gi n g to ile t/ h an gi n g la tr in e

D o n 't k n o w

/N

O th er

Kicukiro Count 51 26 10 173 6 0 0 1 6 273 within districts

18.7% 9.5% 3.7% 63.4% 2.2% 0.0% 0.0% .4% 2.2% 100.0%

Ngoma

Count 0 3 1 227 55 2 0 1 3 292 within

0.0% 1.0% .3% 77.7% 18.8% .7% 0.0% .3% 1.0% 100.0%

Nyabihu

Count 1 4 1 142 51 0 1 0 0 200 within districts

.5% 2.0% .5% 71.0% 25.5% 0.0% .5% 0.0% 0.0% 100.0%

Ruhango Count 0 4 3 175 77 0 0 0 0 259 within

0.0% 1.5% 1.2% 67.6% 29.7% 0.0% 0.0% 0.0% 0.0% 100.0%

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Total Count 86 52 28 1558 348 4 2 5 18 2101 within Districts

4.1% 2.5% 1.3% 74.2% 16.6% .2% .1% .2% .9% 100.0%

Source: Isuku Iwacu Baseline Survey, 2017

The findings from the baseline survey also showed that across the four districts, at least 60% of households use a pit latrine with slab, followed by an automatic cistern flushing latrine. In terms of preference, most of the sanitation professionals interviewed confirmed the preferred latrines are pit latrines and VIP latrines of preference, most of the sanitation professionals interviewed confirmed the preferred latrines are pit latrines and VIP latrines.

Figure 5. Types of latrines preferred collected from sanitation professionals in the four districts

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Figure 6. Types of latrines preferred collected from sanitation professionals in the four districts

Figure 6. Types of latrines preferred as collected from wholesalers/retailers in the four districts

The interviews with sanitation professionals revealed the reasons for latrine preferences are linked to financial capacity of households, followed by the need for a toilet that can offer decent hygiene and that is durable. A small proportion (1.2%) in Ngoma are driven by the need for toilets that can facilitate the reuse of excreta as fertilizers in farming.

Annex 8 describes consumers’ perceptions of sanitation products and services, highlighting the range of reasons for and benefits of purchasing and installing latrines, constraints to latrine

20 | P a g e adoption, liked and disliked features of open defecation, and each of the various latrine technologies reported by the households.

3.1.5. Communication and access to information

The findings from the Isuku Iwacu baseline survey showed that households get information about building or buying sanitation and hygiene products and services from village leaders, community health workers, radio and TV, evening parent groups, and Community Health Clubs, where they…