The Community Water and Sanitation Agency (CWSA) in Ghana is considering a combination of insurance cover and mutual funds between villages to ensure that there is enough money in the system to repair and maintain water systems in rural areas.
Published on: 16/01/2012
IRC in Ghana is working with the WASHCost project to discuss with Government agencies and other key stakeholders a new system to ensure that breakdowns in rural water systems do not lead to a catastrophic loss of service.
Vida Duti, the new IRC Country Director from January 2012 says that lack of money in village accounts to carry out repairs is one of the major reasons for service failure.
“At the moment in Ghana there is no clarity on responsibility for capital maintenance and that affects the system, particularly when there are requirements for major repairs or for rehabilitation. Unfortunately, the communities are not able to collect enough tariffs and therefore are not able to have enough resources to take care of major costs that arise when the systems break down.”
Duti says that reliable information about capital maintenance costs, known as CapManEx, is essential for proper planning and budgeting. WASHCost and the CWSA, which has responsibility for rural water, have established a technical committee at national level to work with district assemblies and identify the main cost items that communities might be expected to meet.
This committee has also been looking at alternative ways of financing major repairs. The two options being considered are an insurance scheme to cover breakdowns, or a mutual fund into which districts and village water and sanitation committees would contribute, which would then pay out when a major repair came along.
Vida Duti says that most communities prefer the idea of the mutual funds, but some are sceptical because previous attempts to set up such schemes have failed. The technical committee will look at why previous mutual schemes failed and what could be done to improve them.
“We are going to look at the possibility that those parts of a system that cannot be insured can be supported through the mutual funds scheme.”
Vida Duti expects the work to take about six months, including a consultation exercise with communities. The next step will then be a national dialogue on sector finance with the Government, development partners and NGOs “so that we all as a country decide on an agreed scheme for providing reliable support to financing capital maintenance.”
