PROVISION OF WATER TO THE POOR IN AFRICA There are several advantages to household resale of water. It can reduce the burden of bill collection on the utility, and for consumers who have trouble managing a monthly payment (which is the majority of those in the informal sector), household re-sale offers a “middle ground” between standpipe and house connection service. However, this source is not necessarily equitable in terms of access (it can be denied at will and pricing is often different depending on whether one is known or not) nor in terms of prices compared to the person paying for a house connection. Nonetheless, for countries where utilities face financial constraints in terms of service extension or where the next incremental customer is unlikely to be able to sustain the monthly cost of a house connection, there is potential to better explore partnerships with private individuals over resale of water. This would imply focusing public efforts on providing good models for equitable pricing among neighbors, and providing support for safe storage of water.

# **Better monitoring indicators**

For countries with a significant informal sector, surveys and policymakers should consider monitoring not only the formal sector water prices and access, but also informal sector prices and market share (for example, using the WAIO measure introduced here). This is particularly true during periods of water sector reform, and would provide a better indication of the health of the overall water market. Mozambique provides a good example of how this was done over time.

In addition, in assessing the impact of higher formal tariffs, it would be useful for standardized surveys to assess and track the number of water sources per household over time, and to explore whether this is driven by supply constraints or by price. The use of multiple sources can be one sign of stress in terms of pricing.

Regulators need to play a greater role in monitoring the standpipe sector, including the number of operational standpipes and quality of service (in terms of price, water pressure, hours of service operation).

# **More transparency in pricing, increased social accountability and feedback mechanisms**

One way to increase the transparency of pricing mechanisms could be through the intensive publication of formal prices and of management arrangements and responsibilities to broader groups of consumers. This would increase the accountability of standpipe operators and could potentially place downwards pressure on prices. To improve the efficiency of this sector, and potentially reduce the amount of resources that are currently “captured” by middlemen, steps could include the following: provide regular feedback mechanisms for consumers; conduct beneficiary assessments to assess whether consumers are even aware of the responsibilities of the operator or rights of the consumer; monitor retail standpipe prices.It is likely that utilities will need to follow the example of standpipe arrangements that have been more successful, and invest in adequate incentive structures and monitoring. However, doing so may reduce the profit levels of standpipe managers, and allow the utility to raise the wholesale price for standpipe water.

# **Priorities for future research**

Given the importance of the unconnected market, there are several priorities for future research. These include: expanding the empirical cross-country research on management models (and management costs) for public standpipes; assessing the size and price of the resale market and improving existing 41