Sector rapport Business Opportunities for Water and Sanitation in Ghana
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Colofon Report: Sector Report on Business Opportunities for Water and Sanitation in Ghana Topics: Drinking Water, Sanitation, Hygiene, Drainage, Solid Waste, Liquid Waste Recycling, Water Supply Composed by: Fred Smiet, fred.smiet@minbuza.nl Embassy of the Kingdom of the Netherlands Economic Section, ACC-EA@minbuza.nl Telephone: +233 302 214 350 With cooperation from: Gladys Ofei, gladys.ofei@minbuza.nl Date: April 2015 Pagina 3 van 21
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Table of Contents Colofon 3 Summary 7 1 General Information: overview of relevant government plans... 9 2 Country Water and Sanitation Situation... 10 2.1 Overview... 10 2.2 Policy Framework for WASH... 10 2.3 Institutional framework and actors in the WASH sector... 11 3 Market Risks and Opportunities... 14 3.1 Opportunities along the water and waste chains... 14 3.2 Small-scale interventions (hardware, training, software)... 14 3.3 Large-scale interventions (hardware, training, software)... 15 3.4 Opportunities in specific large WASH programmes... 16 4 Relevant contacts... 17 5 Addresses Dutch foreign mission... 19 Pagina 5 van 21
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Summary This sector report deals with Water and Sanitation in Ghana, more specifically with drinking water, sanitation, hygiene, drainage, pollution and management of solid and liquid waste, in combination referred to as the WASH sector. With an increasing population, a rapid urbanization and a growing economy, Ghana faces many challenges related to WASH and the wider environment. Opportunities for investment and trade relate to hardware and software; consultancy, advisory services, project development, import, manufacturing, distribution and sales. The market is growing and there is plenty of scope for new players. When it comes to Water and Sanitation, yes, Ghana is ready for business! If you have any specific questions or need more information on any of the areas mentioned and their prospects kindly contact the Netherlands Embassy in Ghana, acc-ea@minbuza.nl or the Netherlands Enterprise Agency (RVO) klantcontact@rvo.nl. Pagina 7 van 21
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1 General Information: overview of relevant government plans Ghana has evolved into a stable and mature democracy throughout the last two decades. The country continues to show good performance on democratic governance, arising from strong multi-party political system, growing media pluralism and strong civil society activism. The Ghanaian economy has shown consistent economic growth over the last ten years. Due to relatively good economic management, competitive business environment, and sustained reductions in poverty levels, Ghana's economy has grown resulting in a strong macroeconomic condition, and a growing private sector. The country s economy slowed down from 8.2% in 2012, 5.5% in 2013 to an estimated 4.2% in 2014 and the forecast for 2015 is 3.9%. Ghana s GDP is 48.14 billion USD (2013). In August 2014 Ghana started talks with the International Monetary Fund on a programme to help to stabilise the macroeconomic situation. The government expects to sign a deal with the IMF mid 2015. Ghana s growth prospects remain positive in the long-term. Inflation was quite stable for many years but became high in 2014. Inflation eased to 16% in January 2015. The central bank sees inflation slowing to 8 percent plus or minus 2 percentage points in 2016. Ghana is eligible for most Dutch trade promotion instruments, which enhances opportunities for doing business with Ghana. Pagina 9 van 21
2 Country Water and Sanitation Situation 2.1 Overview Effective delivery of Water, Sanitation and Hygiene (WASH) services remains one of the major challenges facing Metropolitan, Municipal and District Assemblies (MMDA s) in Ghana. Recently a site in Accra was named as one of the 10 most polluted places in the world 1. According to the Joint Monitoring Programme (JMP) report 2013, the proportion of people in Ghana using improved sanitation facilities is only 13% (19% for urban areas) far below the 2015 Millennium Development Goals (MDG) target of 54%. With an anticipated increase in population, especially in urban areas and the recent cholera outbreak in Accra, the Government of Ghana has prioritized sanitation among the essential services needed. The JMP report presents a more positive outlook for water supply, with estimated water coverage of 86% (and even 91% in urban areas). As such, Ghana seems to be on track in achieving the MDG target (78%) for access to safe water. However, major challenges remain in providing water services in many urban areas: water provided by the utility (Ghana Water Company Ltd.) is rationed because of a gap between (high) demand and (inadequate) supply much of which is caused by poor planning and inefficient management. A large part of the population, especially the poorer segment, is not connected to the utility network and is heavily dependent on unregulated service providers for their water supply, at very exorbitant prices (in some cases, these prices are up to 12 times the price charged by the water utility). Industrialization is growing rapidly in Ghana, in particular the mining, oil and gas industry. On the one hand industrial plants will need a reliable supply of processing water, thereby raising the demand for clean water; on the other hand such plants will have to meet GoG guidelines for treatment of industrial waste and effluent water. It is expected that corporate demands for such environmental technology and services will increase substantially in the coming years. It is worth underlining that there exists a current sense of urgency and dynamism in the WASH sector in Ghana. Many new and promising initiatives are being undertaken at different levels (national and local) by a variety of actors, including the private sector. It is against this background of dynamism and national commitment that this study attempts to identify business opportunities. 2.2 Policy Framework for WASH Government policy generally allows businesses to operate without unnecessary interference, create sanitation business-friendly policies and strategies for WASH services. Ghana s Medium Term National Development Policy Framework gives the following priorities with relevance for WASH: Provision of safe water in rural and urban areas: investments for new and rehabilitation and expansion of existing water facilities; strengthen public- 1 This refers to a dumpsite for electronic waste: www.scientificamerican.com/.../10-mostpolluted-places-in-the-world/ Pagina 10 van 21
private and NGO partnerships in water provision as well as improve community-owned and managed water supply systems; Improving environmental sanitation: promoting the construction and use of appropriate and affordable domestic latrines, integrating hygiene education into water and sanitation delivery; support PPPs in solid and liquid waste management, promote cost-effective and innovative technologies for waste management; Implementing behavioural change as a component of all WASH programs: hygiene education in all water and sanitation programs, promotion of open defecation-free communities, promotion of hand washing with soap, promotion of hygienic use of water and the promotion of hygienic excreta disposal methods. Recently the government initiated monthly National Sanitation Days (every first Saturday of the month) and launched a waste segregation campaign at household level. Local sanitation courts have been installed to deal with offenders and to enforce legislation. Ghana is a member of the global Sanitation and Water for All (SWA) partnership. During the SWA meeting of April 2014, the Minister of Finance committed to allocate US$ 170 million annually to the water (US$ 120 million/ year) and sanitation (US$ 50 million/ year) sector, against an estimated need of US$ 237 million and US$ 402 million annually respectively for capital investments only. Policies on Decentralization: The Local Government Act 462 and the Local Government Service Act 656 provide the framework for decentralised sanitation policies and the municipal or district mandate for sanitation. Policies on Water and Sanitation Policy/Strategic Framework National Water Policy Water and Sanitation Strategic Development Plan National Environmental Sanitation Policy NESSAP/DESSAP & SESSIP SHEP National Policy (School Health Education Programme) Business related issues PPP orientation IWRM planning framework Sector priorities M&E arrangements Training, advisory services PPP orientation and private sector investments Household sanitation approach (CLTS) Equipment, technology Training, advisory services District environmental and sanitation action and investment plans Framework for delivery of school hygiene and sanitation interventions, equipment, technology; behavioural change 2.3 Institutional framework and actors in the WASH sector The WASH sector in Ghana knows a complex institutional framework spanning central, regional and local levels. In addition many NGO s, bilateral donors and Pagina 11 van 21
multilateral organizations are actors in the sector. Comparatively few private companies currently play a role, notably in engineering, waste collection and waste management. Government agencies & ministries Ministry of Local Government and Regional Development (MLGRD) - Environmental Health and Sanitation Department (EHSD) is responsible for the development of national policies and strategies related to sanitation and environmental health, as well as regional development. Sanitation is one of most decentralized sectors with responsibility for the assemblies at district/municipal level. Ministry of Water Resources, Works and Housing (MWRWH) is responsible for the formulation and co-ordination of policies and programmes for infrastructures with respect to public works and housing, water supply and sanitation, and hydrology. The Water Directorate (WD) is responsible for the policy/ strategy formulation and technical advice for drinking water supply. In rural areas the responsibility for water supply rests with the CWSA (Community Water and Sanitation Agency; CWSA is responsible for co-ordination of the National Community Water and Sanitation Programme). For urban areas the responsibility for water supply rests with the Ghana Water Company Limited (GWCL). The Water Resources Commission deals with permits for groundwater extraction. The Ministry of Health (MoH) and Ghana Health Services. Ghana Health Service (GHS) is a public service body that is responsible for implementation of national policies under the control of Minister for Health. Proper sanitation is an essential aspect in the implementation of health policies. Ghana Education Services (GES)- School Health Education Programme SHEP The Ministries of Education and Health provide directives for a school health system to promote an integrated health education and health delivery, which includes the promotion of WASH activities. The Government established the School Health Education Programme (SHEP) as a unit of Ghana Education Service (GES). The Ministry of Environment, Science, Technology and Innovation (MESTI) is the principal environment ministry responsible for the formulation and coordination of policies covering the environment, and environmental sanitation in regulation and provision of technical standards and manuals. The Public Utilities Regulatory Commission (PURC) is the regulator for, amongst others water supply, in line with its mandate to protect the interests of both consumers and providers of utility services. It has the mandate to set tariffs for urban water supply2. In rural areas, water supply systems are communitymanaged with the District Assemblies approving the tariffs and CWSA providing advice. Non-governmental organizations There are about 50 (small and large) organisations working in WASH-related activities. Most of these NGOs are working in sectors such as health, education, WASH, nutrition and HIV/AIDS. They are working at the national level down to the 2 Current water tariffs can be found at http://www.gwcl.com.gh/pgs/tarrifs.php Pagina 12 van 21
lowest level in communities and villages. The Ghana Coalition of NGO s in the Water and Sanitation Sector (Coniwas) acts as an umbrella organization for many NGO s in the WASH sector. There are also some large Dutch NGOs active in the WASH Sector in Ghana: for example the Dutch WASH Alliance (Simavi, WASTE, RAIN Foundation, ICCO and AKVO), IRC Ghana and SNV. Development Partners Multilateral organizations in Ghana cover various sectors and activities in the WASH sector: UNICEF, World Bank, African Development Bank, UN-Habitat and the WHO (World Health Organization). Besides the Netherlands, the following bilateral donors are also active in WASH: Canada, USAID, KOICA, JICA and the French AFD. Private sector actors Presently private actors in the WASH business are active mainly in engineering, design and construction of infrastructure (for water supply, drainage and waste water), drilling of boreholes and waste management (Zoomlion is the biggest local waste management company). Other local companies are engaged in bottling of drinking water, including sales of sachet water. Pagina 13 van 21
3 Market Risks and Opportunities 3.1 Opportunities along the water and waste chains Twenty one million Ghanaians lack improved sanitation facilities and most of the waste water/fecal sludge is discharged untreated in the environment. This means there are great market opportunities in this sector, although the sanitation market still requires significant efforts to create business models, to match supply and demand, to scale up technological options and to determine sustainable financing options. Business opportunities are likely more financially viable if steps/segments in the chain are packaged into one business model (for example, from collection of raw waste to processing and marketing of a commercially valuable product). Apart from investing in business models, these opportunities comprise trade in goods and service delivery as well. Markets, clients and target groups can be defined at all levels: domestic (households), communities, small and large towns, small and large corporations and industries. Given the differences in approach and technologies, opportunities are distinguished as small-scale and large scale interventions. 3.2 Small-scale interventions (hardware, training, software) The following market segments in the drinking water and waste chains can be distinguished with relevance for small-scale interventions and SME involvement: toilets (household, public and institutions): - flush: design, manufacturing, marketing, maintenance; - dry : dem (+ composting); - rental of mobile toilets; - construction and management of toilet blocks for schools or communities. drinking water: - boreholes, small-scale water supply systems (tanks, pipes, meters, pumps and other fittings); - treatment for bulk water supply and for bottling; - supply to beverage industry, food processing; - filters, chemicals; - equipment, quality control, testing. waste water/liquid waste: - sludge to fuel (biodiesel, briquettes); - sludge to compost; - wetlands/fishponds for treatment (aquaculture); - waste water treatment plants with sewerage; - idem without sewerage, tankers; - industrial waste/effluent (per industry/company); - collection and transportation; - equipment quality control, testing; Pagina 14 van 21
solid waste: - waste recycling to compost; - idem to fuel (biodiesel, briquettes); - plastic/metal/paper recycling; - waste to energy from landfills, biogas; - collection and transportation. financial services (micro/meso credit to various target groups): -manufacturers of hardware (toilets, pipes, digesters etc.); -transporters; -waste collectors/pickers; -households; -communities; -toilet operators; -processors/recyclers of waste; -mobile payment systems. advisory services to SME s: - Business model development: drawing on market research and through testing in different contexts in several countries, develop clear, replicable business models for sustainable sanitation service delivery that benefit the poor, which can be adopted by the private sector. - Business support: strengthen managerial and technical capacity of sanitation businesses to improve their ability to service the market and be competitive. - Building an evidence base: documenting where businesses make a clear case to customers, and cataloging formal service providers (e.g. public utilities/local governments), regulators, local investors, development organizations and donors about the role for businesses to address sanitation needs in poor areas. In-depth understanding of critical factors (demand, willingness to pay) which will inform the business model in a particular segment and the potential for scale-up. 3.3 Large-scale interventions (hardware, training, software) The current market for large investments in environmental and WASH technology is small, but sanitation problems are mounting, which creates many opportunities. In the coming years Ghana will need huge investments in WASH infrastructure, both new as well as rehabilitation of existing facilities. Capital requirements for these interventions are usually such that only public (or donor) funding applies, such as for urban sewerage and drainage systems. Other investments will be needed from public, private or PPP arrangements for large scale collection and processing of waste into recycled, commercial products or into energy, for waste water treatment facilities and for large industries that need to invest in WASH facilities. - Drinking water systems (treatment plants, infrastructure for drinking water, pipelines, processing plants for industries, supply and distribution systems, equipment, technology) - Assessment and management of (surface and/or groundwater) water sources for urban and industrial water supply - Waste water treatment Plants (public, institutional, industrial; equipment, technology): rehabilitation, construction Pagina 15 van 21
- Sewerage systems (planning, rehabilitation, construction) - Drainage systems (planning, rehabilitation, construction) - Full-scale laboratories for water quality control and testing - Solid waste collection, processing and recycling or composting - Nutrient or biomass recovery from waste - Sanitary landfills and biogas production - Liquid waste (fecal sludge) collection, processing and recycling - Management, operation and maintenance of WASH infrastructure or services - Waste to energy initiatives for biogas, electricity generation, biofuel - Clean up of contaminated sites (large and small) - Project development, financial and advisory services in above fields. 3.4 Opportunities in specific large WASH programmes 1. The Ghana Netherlands WASH Programme (GNWP): www.gnwp.nl; 2. The Ghana WASH Window (GWW) as a component of GNWP aims at PPP s, works through calls for proposals and requires 30% own contribution: http://english.rvo.nl/subsidies-programmes/ghana-wash-window; 3. World Bank: Greater Accra Metropolitan Area (GAMA) Project; http://www.worldbank.org/projects/p119063/gh-gama-sanitation-waterproject?lang=en 4. African Development Bank: Urban Sewerage Improvement Project; http://www.afdb.org/en/topics-and-sectors/sectors/water-supplysanitation/projects-activities/activities-in-ghana/ Pagina 16 van 21
4 Relevant contacts Netherlands Enterprise Agency (RVO) T +31 88 042 42 42 Suzanne Bouman, Adviser International Business www.rvo.nl/ghana Ghana WASH Window Peter Spierenburg, T: +1 88 602 4692, peter.spierenburg@rvo.nl http://www.rvo.nl/subsidies-regelingen/programma-publiek-private-samenwerkingppp List of Ghanaian organizations and major companies in WASH: Networks/ Associations:http://www.sandec.ch/forschung/sandec/gruppen/EWM/projects_ew m/fame/index_en; http://www.waste-enterprisers.com/our-businesses/; http://www.slideshare.net/jocelynwyatt/ghana-opportunities-in-sanitation; http://www.espaghana.com/ (Environmental Service Providers Association, ESPA); http://www.coniwas.com (Coalition of NGOs in Water & Sanitation, CONIWAS); http://www.tovilawatersolutions.com http://www.zoomlionghana.com Ghana Chamber of Commerce & Industry 1st Floor World Trade Centre, Opp. Children's Park, National theatre, Accra P. O. Box 2325, Accra T: +233 (0) 302 662860 info@ghanachamber.org www.ghanachamber.org Ghana Netherlands Business & Culture Council 2nd Floor Horizon Plaza, Woolworths Building 60 Liberation Road, Airport Area, Accra T +233 (0) 302 76 78 25 www.gnbcc.net, (check also www.ghanecc.com Managing Director: Lysanne Denneboom, lysanne@gnbcc.net Ghana Investment Promotion Centre Contact Person: Emmanuel Badger, ebadger@gipcghana.com Pagina 17 van 21
T +233 (0) 302 665 125 http://www.gipcghana.com/ Pagina 18 van 21
5 Addresses Dutch foreign mission Gladys Ofei Embassy of the Kingdom of the Netherlands 89, Liberation Rd. Ako Adjei Interchange P.O. Box CT 1647 Accra, Ghana T: +233 (0) 302 214350 gladys.ofei@minbuza.nl www.nlembassy.accra.org Pagina 19 van 21
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