Financing Sanitation Solutions in Uganda

12 June 2012

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By Noah Schermbrucker, SDI Secretariat 

The relationship between development donor and recipient is by its very nature a tenuous and unsustainable one. The vagaries of donor funding are subject to sudden sea changes as international development agendas shift focuses and locations. The very fact that phrases such as “development trends” or “funding focus” exist in popular vernacular underscore the impermanence of donor finance. Ironically this occurs amidst a plethora of calls for sustainable projects, cities and resource use. How can projects be sustainable if the funds that support them will not always be available?

Mobilised and organised communities provide a long-term framework with the capacity to develop and maintain infrastructure developments. However if these projects are merely physical manifestations of donor finance they will not have the ability to go to scale across cities-they have to work within the formal market to revolve at least part of the finances invested. In some cases they may even yield a small profit for the urban poor who can re-invest money gained to further improve their areas. Successful models can be tracked, refined and shared across the SDI network taking into account local contexts and constraints. As such projects gain traction and momentum they become more attractive to funders who wish to maximize the limited resources they have to invest and perhaps even other urban poor federations who wish to invest in infrastructure projects and realize a return on these investments. 

The communal toilet projects in Nakawa and Rubaga market in Uganda are beginning to grapple with these pressing issues. In working towards a model that can pay for itself and realize a small profit, infrastructure is separated from the donor-recipient cycle and becomes self-sustainable and possibly, at a later stage, self perpetuating. This presents an opportunity for the tangible infrastructure results of a pro-poor community driven process to go to citywide scale. 

After providing a brief project background the main focus will be on the project finances and loan repayments for the Nakawa project that demonstrate the possibilities for an economically sustainable pro poor model toilet model.  Further community context will be given by a transcribed interview with Mdamba Umar from the Rubaga Market toilet Project Management Committee (PMC).

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Background:

The Federation’s 2011 enumeration revealed that over 82.5% of slum residents in Jinja do not have access to a toilet on their compound, while 95% do not have access to clean water and sanitation. Rubaga settlement/market alone has a population of over 1000 people who visit the premise on the daily basis. Over the years the market had one pit latrine which filled up and was demolished. Currently, the settlement has no single toilet and thus the population either visits the neighborhood or use plastic bags. The federation has been working very closely with the Jinja municipal council to mobilize and organize the people to address this challenge through a number of interventions. Finally the Jinja municipal councilor has allocated a piece of land to put up sanitation (both toilet and shower facilities) and a community centre to support the affected families and the community. The project is being boosted by a contribution from the Municipality (land) & the Community is contributing labour and savings, and then SDI is contributing seed capital worth USD7843.

Finances:

The tables below present a basic breakdown of the most important aspects of the project finance; the initial capital contributions, running costs, profits and projected timeframe for loan repayment. These form a key part of the project and are managed through the PMC and other relevant committees.

 

Contributions for Nakawa:

 

20% from community

 

20% from government

 

60% from SDI

 

Labor and savings

Technical support

Transportation vehicle (no fuel) and Land

 

 

Requested

 

Total = 13M (UGX)

 

Total = 13M(UGX)

 

Total sought = 40M   (UGX)

 

Projected running costs & profits for Nakawa:

 

Unit est. daily takings

 

Per month

 

Per Year

 

Running costs (maintenance, wages)

 

Balance (ie. minimum repayment pa)

$330.40

826,000UG   

$991.20

2,478,000UGX

$11,894.40

29,736,000UGX

$5,947

14,868,000UGX

$5,947

14,868,000UGX

 

Loan Terms and Repayments

In the interests of conservatism and in order to cater for unexpected expenses, the federation would like to spread the loan repayment over 6 years.

Projected loan period:  6 years

Interest rate: 8% pa

Loan amount: 37,440,000 UGX = $15, 600

 

year 1

year 2

year 3

year 4

year 5

year 6

TOTAL

Principal repayment

 6,240,000.00

 6,240,000.00

 6,240,000.00

 6,240,000.00

 6,240,000.00

 6,240,000.00

 37,440,000.00

Interest

 2,995,200.00

 2,496,000.00

 1,996,800.00

 1,497,600.00

 998,400.00

 499,200.00

 10,483,200.00

Total payment

 9,235,200.00

 8,736,000.00

 8,236,800.00

 7,737,600.00

 7,238,400.00

 6,739,200.00

 47,923,200.00

TOTAL IN USD

 3,848

 3,640

 3,432

 3,224

3,016

 2,808

19,968

Monthly contribution

 769,600.00

 728,000.00

 686,400.00

 644,800.00

 603,200.00

 561,600.00

 

 

Community Perspective:

Mdamba Umar: Toilet Project Management Committee (PMC)-Rubaga Market Toilet, Jinja

I am from the project managment committee of this sanitation project here in Rubaga market, Jinja region. We aquired land from Jinja municipal council free of charge due to our relationship with the council. Drawings were made by the community and these were approved.

We are constructing this toilet with one side for men and another for ladies and access for the disabled. Above the toilet we are going to put our community hall for Jinja. The municipal council promised to put a sanitation line. Now there is a temporary septic tank.

We have almost 1000 vendors at the market but only one toilet which was not enough-this was made clear by the enumeration. This toilet was a pit latrine but the new one will be a water-borne toilet that can accommodate more people and has a shower. We have used new forms of technology like T-beams and ladders which are cheaper than conventional options

Under the Project Management Committee (PMC) we have a procurement committee, the tender board. First we do material sourcing. We go to suppliers and ask for a formal invoice and quotation which we then compare at our local office.  We discuss what material we can purchase, at what price and who is supplying both quanity and quality.

The members of the community will pay for this service. Those who wish to use the urinals will pay 200 shillings and the shower will be 500 shillings. We agreed on these prices after analysing the enumeration information.

The main challenges we face are; funds come in installments so that delays the work, at times the council comes late to supervise the work,. The community has participated fully because they were interested in this project. We have built this modern toilet which is a pilot project not only for Jinja but for the whole of Uganda and all the work has been done by the community.


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