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Small business and WASH in the age of coronavirus

Published on: 16/06/2020

Since the coronavirus began spreading throughout the world, few things have been unaffected by the COVID-19 pandemic. Our activities to develop markets for WASH products and services are no exception. 

We’re all figuring out how to shift and adapt to contribute to the prevention of this deadly virus. Naturally, water, sanitation, and hygiene (WASH) are at the centre of these efforts. The USAID Transform WASH team in Ethiopia has learned some important lessons about how to make these shifts and stay true to the central objectives of the project. 

 Transform WASH is mainly working on hand washing stations

Most emergency situations, such as natural disasters, affect WASH markets both negatively and positively. They can disrupt the market supply of WASH products and services, and humanitarian responses that include free distribution of WASH products can unintendedly create long-term damage to markets by reducing customers’ willingness to pay for such products. But emergencies can also be a blessing in disguise as key messages on good hygiene and sanitation practices reach a larger proportion of the population and are more likely to be adopted as people seek to reduce their vulnerability. This can, in turn, increase demand for WASH products and services, benefiting well-prepared businesses that are able to deliver to their household customers as well as to emergency response programmes.

For Transform WASH, the team has observed a range of negative impacts on their activities caused by the coronavirus pandemic: 

  • The supply of sanitation products has been negatively affected as local distributors are not able to travel freely and pick up products from warehouses.
  • Community demand for sanitation products to build new or upgrade their facilities has decreased, probably because households are prioritising purchases of food and other essential commodities. 
  • The construction of model latrines and water supply systems at healthcare facilities had to be suspended due to travel restrictions.
  • Group activities, such as government and business partner capacity building and social behaviour change training for health extension workers, have been postponed as current restrictions do not allow meetings with more than four participants. 

However, we have also seen positive effects of the pandemic. While demand for sanitation products has declined as a result of the outbreak, there has been a surge in household, business, and institutional demand for hygiene products, such as handwashing stations, soap, alcohol-based hand sanitisers, and personal protective equipment, like gloves and masks. This sudden high demand did not come without challenges and has placed a strain on supply chains, and it has been difficult to procure priority items centrally and distribute them where needed. 

For example, plastic handwashing stations, which had previously seen low consumer demand but reasonably steady institutional demand from NGOs and international agencies, were suddenly potentially attractive in the household consumer market, yet supply chains hardly existed outside of larger cities. Manufacturing inputs for these products have been in short supply due to the increased challenge of importing raw and some finished materials (such as plastic water taps) into the country. In addition, high demand has led to price escalations, putting the cost of many of these items out of reach of both businesses and consumers. Though the government has attempted to control prices during the outbreak, the focus has been primarily on fast-moving consumer goods like food items.   

These supply disruptions and shortages, and other logistical challenges caused by the outbreak, have highlighted the important role that an active private sector for WASH products and services can play when most needed. Interventions such as USAID Transform WASH, which seek to improve distribution systems and the operational capacity of small businesses, ultimately help Ethiopia meet current demand and build capacities to address similar types of public health emergencies in the future. However, it is important to start identifying the lessons emerging from the COVID-19 crisis now, such as:

  • Diversify product options and improve operations of businesses engaged in WASH: Sanitation products such as toilet pans and latrine slabs alone are clearly insufficient in response to the pandemic or to future crises in which WASH facilities are a critical component of disease prevention. We’re supporting local manufacturers, distributors, and masons to learn how to source, produce, sell, and install products such as handwashing stations, soap, alcohol-based hand sanitiser, and more. While this expanded capacity will help businesses bring in additional revenue even during “normal” times, it is needed more than ever during this emergency to increase local supplies so urgently needed by households and communities. 
  • Create strategic partnerships within the WASH market: Ensuring a reliable supply of raw materials to produce WASH products is essential during an emergency. Putting into place strong linkages between suppliers (manufacturers, distributors, wholesalers) and local businesses should therefore be a priority to strengthen systems now and for the future. Also, establishing partnerships between private sector businesses and the government could provide a mechanism for keeping stocks of critical raw materials and health-related WASH commodities available for emergencies. It also serves to promote important public policy initiatives, such as temporary tax and duty abatement and priority access to foreign currency, which increase affordability for households and grease the wheels for rapid accessibility in the market.
  • Capitalise on newfound demand: The COVID-19 outbreak is having a strong reinforcing effect on current and future behaviour change communications and demand-creating activities. The public has never been more aware of the link between disease transmission and hygiene-related behaviours and WASH infrastructure. WASH sector stakeholders agree on this and should work together to reinforce this heightened understanding in the public’s mind, as well as within healthcare institutions and educational facilities. And working to strengthen WASH-related businesses so they have higher capacity to scale up production of essential products during future emergencies could also lead to positive outcomes. Transform WASH is supporting small business partners across the country in connecting to supply chains for these products and promoting them through stepped up marketing, such as door-to-door campaigns and promotional materials to inform their customers what products are available, where, and at what price.

“We no longer need to convince the community about the importance of sanitation and hygiene. We have to diversify our product options creatively and respond to the huge demand created by COVID-19.” - USAID Transform WASH Business Advisor 

  • Advocate for market-based programming for emergencies: Government, at all administrative levels, is becoming aware of the benefits and limitations of the private sector to support their efforts during emergencies like the coronavirus pandemic. Rather than focusing only on direct handouts, WASH market development programmes support local businesses to increase affordable supply of products and installation services. In partnership with the government, they can promote equitable distribution to customers by cooperating to prevent negative trends such as price-gouging, profiteering and other unfair business practices and various types of corruption. A well-coordinated emergency response also helps governments from district, regional and national levels to avoid competing among each other for limited resources.

As the pandemic arrived in Ethiopia, USAID Transform WASH had just started, as part of our planned goals for the year, to support local manufacturing and distribution of handwashing stations. To date, in two short months, our business partners have sold 4,000 handwashing stations to household customers. Many more are in the pipeline, but with nearly 50 million Ethiopian people lacking access to this basic facility in their homes, the market has nowhere to go but up. 

About Transform WASH

USAID TRANSFORM WASH sets out to improve water, sanitation and hygiene (WASH) outcomes in Ethiopia by increasing access to and sustained use of a wide spectrum of affordable WASH products and services, with a focus on sanitation. It does so by transforming the market for low-cost, high quality WASH products and services: stimulating demand at community level, strengthening supply chains, and building the enabling environment for a vibrant private market.

USAID TRANSFORM WASH is a USAID-funded project implemented by PSI in collaboration with SNV, Plan International, and IRC. The consortium is working closely with government agencies including the Ministry of Health, the Ministry of Water, Irrigation and Electricity, the National WASH Coordination Office and regional governments.

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