Does investing in water, sanitation and hygiene actually pay off?

We had Fresh Life's cost-benefit analysis of its container-based sanitation services in Kisumu, Kenya, as well as a WaterAid cost-benefit study covering four African countries, with the findings presented by WASH economist Guy Hutton.

The session explored the return on investment in WASH, presenting evidence that the economic benefits significantly outweigh the costs, and discussed how this data can be effectively used to influence policy and secure financing.

Fresh Life: the returns for each dollar invested in Kisumu

Ms. Wali Malagongo opened with Fresh Life's experience scaling non-sewered sanitation in Kisumu's informal settlements. The study, conducted in partnership with Aquaya, aimed to guide Fresh Life’s expansion into Kisumu, focusing on the cost of expansion and who would pay for it.     

The analysis assessed costs and benefits over a 15-year horizon from four perspectives: households, the sanitation duty bearer (in this case the utility, since sanitation is a devolved function under Kenya's constitution), the healthcare sector, and society as a whole. On the benefit side, households gained mainly through better health, time savings and lower expenditure. Most residents had access to a shared (and mostly pay-per-use) toilet, but these facilities were often too far away to be used consistently, so time savings (and the temptation to defecate in the open) were a key driver of uptake. Health gains followed a similar pattern.  At adoption rates below 75% of households, the benefits accrued primarily to those using the service. The study modelled the emergence of a “positive sanitation externality” around year seven, when community-wide disease reduction started to show.

After three years of operation, each dollar invested in Fresh Life's service was generating at least $2 in benefits. By year 15, that figure was projected to rise to $4 in benefits per dollar, and cumulative benefits over the 15-year horizon were expected to exceed $25 million. But the distribution of those gains was uneven. Society and households came out ahead, while the utility — the duty bearer required by law to guarantee the service — carried a negative net position, largely because of the subsidies extended to low-income customers. Fresh Life's model assumes that revenue from reused waste products (converted into agricultural inputs) could eventually offset that cost. In Kisumu, however, that reuse stream hasn't yet been activated, so the funding gap remains.

What stood out in the discussion afterwards wasn't really the ratio — it was what Fresh Life did with it. The research helped make the case, at city and eventually national level, for Kenya's new National Sanitation Management Policy. Under the policy, county governments are now required to budget for non-sewered sanitation and report on it to the Water Services Regulatory Board. Wali was clear that the sequencing mattered: policy first, then budget, then implementation. 

WaterAid: four countries, a wider lens

John Garrett and Guy Hutton then presented WaterAid's more recent, country-level cost-benefit work across Burkina Faso, Liberia, Niger and Zambia, published earlier this year. While Fresh Life's research took a service-specific lens, this study asks a broader question: what does inadequate WASH cost these countries, and what benefits would closing the gap deliver?

The study assessed health impacts (medical costs, productivity losses, premature mortality from WASH-related diseases like diarrhoea and respiratory infections), quantified time-use impacts (water collection, accessing sanitation), examined urban vs. rural contexts and gender-specific impacts (e.g., burden on women and girls for water collection and child care) and estimated unit costs for basic and safely managed water, sanitation, and hygiene services, including institutional costs (schools, healthcare facilities).

The combined cost of inadequate WASH across the four countries comes to $5.7 billion a year — a figure that's difficult to put into perspective given the differences in size of the four countries. So, the report expresses these costs as a percentage of GDP, ranging from 5.3% in Liberia to 11.1% in Burkina Faso, driven largely by higher rates of open defecation and the time costs involved. Guy flagged that WASH-related diseases account for only 2.8–5.2% of total medical expenditure across the four countries — a smaller share than many would guess, partly because not every WASH-related illness could be captured given the time and data available.

The distributional breakdown echoed Fresh Life's findings: rural areas absorbed 76% of the negative impact, mostly through time lost to water collection, and women bore 69% of the burden for the same reason, with children accounting for roughly half of the medical cost impact because of their higher disease burden.

For Burkina Faso specifically, the benefit-cost ratios varied sharply — higher in urban areas, higher for basic service levels than for safely managed ones (because safely managed services carry a higher incremental cost against a comparatively modest incremental benefit). Across service types, the overall benefit-cost ration for basic WASH was 5.5, in line with earlier studies, although Guy was candid that comparisons  with his own 2018 Copenhagen Consensus figures are not straightforward — unit costs change from study to study, and in this round value-of-statistical-life was used rather than the human-capital approach for valuing averted deaths. Also, this study measured safely managed water and sanitation specifically, something rarely done at country level. One gap the team couldn't close: they'd hoped to compare unit costs with and without climate resilience incorporated into the design, but too few country examples were available to make that comparison credible.

Who needs convincing?

We already know WASH delivers a positive societal return — so who, exactly, needs convincing, and does the figure itself change anyone's mind?

Wali's answer, based on the research in Kisumu, was that the research's value wasn't really about winning an argument. Rather, it was about giving the mandate holder (the county government) something concrete enough to act on, particularly since the utility itself had requested the analysis. John Garrett's example from Liberia was more overtly political: the WaterAid team used the country study to support advocacy directly with the Ministry of Finance, deliberately shifting the framing away from health and towards WASH as an economic and employment issue — an argument, he noted, that resonates differently with a finance minister balancing competing claims on the budget.

It's one thing to show that benefits exceed costs in aggregate, and another to be honest about who ends up carrying the loss. Across the four countries—Burkina Faso, Liberia, Niger and Zambia— the gap between a 3.4 benefit-cost ratio for basic WASH and 1.6 for safely managed services is real, and in both Fresh Life's Kisumu study and WaterAid's country work, it's government — the duty bearer — that ends up carrying the net cost. The useful next step for this evidence isn't just repeating that benefits outweigh costs; it's naming who absorbs the negative side of that ledger, and then working out which financing instruments can actually cover it.

Cost-benefit ratios and comparisons between sectors

The conversation then shifted: increasingly, funders outside the traditional WASH space are comparing interventions using a universal cost-effectiveness language — one discussant shared his own recent example on salt fortification, pitched as delivering 6.5 times more impact than an equivalent cash transfer. That's the language increasingly used by a growing pool of capital, tied to what he called the “third age” of philanthropic and impact-driven finance, is starting to use to allocate money across sectors. However, a compelling figure is a message, not a policy request — and advocacy built purely on “WASH is important because of this ratio” tends to stall because of the gap between the time needed for that message to gain political traction and the relatively short duration of a typical programme cycle.

Guy closed the technical thread with a note of caution about chasing comparability too far. League tables (ranked lists used in investment banking that compare organisations, companies, or teams based on specific performance criteria or metrics) across sectors — WASH against health (vaccines), against nutrition — quickly become complicated, and are not always in WASH's favour. Earlier headline numbers (the widely quoted Disease Control Priorities figure among them) may not have captured costs as comprehensively as they should have. He pointed instead to a promising and underexplored area: the documented cost savings from reducing healthcare-associated infections through WASH in health facilities, which he believes deserves greater attention in future community-level analyses. 

Where this leaves us

The two studies presented provide strong evidence to counter the perception that WASH is an "unproductive" sector, strengthening the case for prioritising investments despite competing demands on public resources. The examples from Kenya and Liberia demonstrate successful policy uptake and budget allocation following these studies.

What's still unresolved is how to turn a favourable cost-benefit ratio into a specific, actionable ask: one aimed at the right stakeholder, framed in language that reflects how that stakeholder actually allocates money, and honest about who bears the net cost once the investment is made.

The next Finance Connect session, in November, turns to finance for decentralised sanitation and value chains — we hope to bring to light some new research on the topic.

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About Finance Connect:

As part of an ongoing effort to deepen expertise and elevate the global conversation around WASH Finance, Water For People and Riva through the One For All Alliance have developed a series called Finance Connect. It brings together a range of perspectives and experiences and creates a space where WASH professionals present and discuss targeted topics to do with how water, sanitation, and hygiene work is funded. Each session produces a blog with insights from the discussion, which we hope can serve as a resource for the entire sector to learn and, ultimately, channel more resources and attention to the critical topic of universal and sustainable water, sanitation, and hygiene services for the billions of people whose needs are not currently being met.