Working with WASH market systems to improve emergency response and resilience in urban areas

Smaller, local-level market traders and service providers are often the principal means by which affected communities obtain the essential commodities they need during a crisis. In urban areas, these actors are part of supply chains consisting of larger suppliers and retailers, from both the public and the private sector. Instead of by-passing these market systems during emergency responses and distributing goods and providing services directly to those in need, humanitarian agencies are increasingly seeking ways to work with these actors to improve the effectiveness and efficiency of their responses. Working with market systems can also help support market rehabilitation and livelihood opportunities. In protracted and recurring crises in particular, there is a strong rationale for providing critical goods and services by working through existing supply chains. In most situations, these supply chains are already inadequate, and the impacts of crises are predictable. Seasonal impacts – notably related to changes in rainfall – repeatedly affect water, sanitation and hygiene (WASH) market supply chains, often leading to recurring disease outbreaks. Rather than waiting for emergencies to occur, it makes sense to work with and support these supply chains to strengthen their resilience to and preparedness for emergencies.

Mapping and analysing market systems to support market-based programming

A market analysis to understand the nature of supply and demand in the WASH market is an essential step in the design of a market-based programme, or potentially to decide that market-based programming is inappropriate in the first place. Such analysis maps out the capacity of the market system to supply essential WASH goods and services and assesses the level of demand in the community (such as people’s preferences and purchasing power). Various market analysis tools are available, including household surveys, seasonal calendars and market surveys. These tools are used to understand and map how the market functions (prices, volumes, stocks, transport, access to finance) and to understand what people spend their money on, why and what helps or hinders a target group to buy a good or service from the market. Tools such as Mobenzi or Survey CTO are often used to facilitate more rapid data collection and analysis.

Oxfam’s experiences in market analysis and programming

With funding from USAID’s Office of Foreign Disaster Assistance (OFDA), Oxfam set out to promote market-based responses to emergencies using pre-crisis market mapping and analysis in Bangladesh, Indonesia, South Sudan and Zimbabwe, focusing primarily in urban areas. The results of these market mapping and analysis activities were used to develop marketbased programmes in three categories of increasing depth and complexity, as described below. Oxfam focused on precrisis market analysis (PCMA), a version of the more widely recognised Emergency Market Mapping and Analysis (EMMA), which has been adapted for use in pre-crisis contexts.

At the most basic level, market-based programmes use market supply chains to provide goods and emergency services via existing market actors. However, these actors frequently require some form of assistance to be able to function effectively and meet the needs of affected people in accordance with humanitarian standards. Thus, supporting market actors to recover from the shock of a disaster after an event, or to prepare for an emergency prior to a crisis, is often an important programming activity. This may involve using the market for supply by contracting water truckers or procuring latrine slabs locally and stimulating demand with cash grants or vouchers for desludging latrines. Support may include small grants to repair water supply systems, restoring a latrine slab business or subsidising the bulk purchase of sanitary pads.

The third type of market engagement, which is generally only possible in a non-crisis situation, involves strengthening or developing the market system as a whole. This is generally a longer-term approach that expands or diversifies existing markets to improve access, or introduces new commodities that provide a better-quality product or service. Market-based programming also involves activities to promote the demand side of the market system, which in the majority of situations involves the use of some form of cash transfer programming, combined with marketing activities and hygiene promotion. Although there is increasing interest in multi-sector cash transfers, there are concerns in the WASH sector that cash will not be utilised for WASH commodities, and the majority of cash programming for WASH used vouchers.

The sections below describe in more detail these approaches to market-based programming with specific reference to Oxfam’s experience in the countries participating in its OFDA-funded programme.

Using existing market supply chains

Using the market to deliver WASH commodities is feasible as part of an emergency response where the market is still functioning adequately. The most common approach involves working with local market actors to provide commodities to affected communities upon receipt of cash or, as mentioned above, a voucher in exchange for water, a hygiene non-food item (NFI) or use of a privately operated toilet or washroom, for example. In the Gaibandha and Satkhira districts of Bangladesh, flooding and waterlogging affect vulnerable communities on an annual basis. The market assessment undertaken by Oxfam benefited from a Vulnerability and Risk Assessment (VRA), which added depth to the contextual and needs analysis and helped to identify critical WASH markets. The analysis showed that not all of the hygiene items distributed during traditional WASH responses were meeting priority needs. Critical commodities included soap, menstrual hygiene products and containers for storing water. Oxfam Bangladesh prepared framework agreements with local market actors to supply NFIs to affected communities through a range of cash transfer modalities, with a value derived from an estimate of the cash equivalent for the traditional WASH ‘basket’. These framework agreements define the payment mechanism, the location of material supplies, specific duties and responsibilities of the vendors and the distribution system, the quality of the materials and compliance with applicable laws, rules and regulations.

Supporting market actors

As mentioned above, markets systems may require additional support in order to provide essential supplies or services effectively during a crisis. Market support actions can help suppliers increase resilience and preparedness for future crises. One example of pre-crisis market strengthening was developed in Jakarta to meet the WASH needs of flood-affected populations. During large-scale flood events, the poorest and most vulnerable families are temporarily relocated to centres for shelter and safety. Framework agreements were signed with market actors requiring them to maintain the functionality of the public toilet/shower facilities during flooding. Private sector WASH providers were given grants to upgrade their facilities and, through the agreements, mandated to provide access to these people upon receipt of a voucher. An e-payment system was set up to enable them to access the public toilets/showers during floods, reducing the risk of disease outbreaks in and around centres without such facilities.

Another example of a market support action implemented under the OFDA-funded programme is from Juba, where Oxfam provided support to the community-managed water supply system in Gumbo to enable the operator to understand market demands, function more commercially and be better equipped to deal with a crisis. The aim was to supply potable water from the small water treatment system to households via bicycle vendors, and also to sell water to water tankers. Oxfam carried out market research to understand users’ socio-economic backgrounds, consumption patterns, service expectations and willingness and ability to pay for improved water services. Customer profiling combined with an ability and willingness-to-pay survey was used to assess Gumbo’s commercial viability, strengthen management arrangements and set up appropriate accountability systems to protect users’ interests and rights. Oxfam provided institutional support to ensure that the management of the system was commercially viable, with separate roles and responsibilities between the operator (i.e. the entity with direct responsibility for the day-to-day operation of the system and sales of water) and the water management committee responsible for oversight and accountability.

Developing markets

Market development is a longer-term approach designed for pre- or post-crisis situations. It helps markets diversify products or services, expand existing businesses and access new markets. The supply side of the market may be strengthened through training and the development of public–private partnerships. Demand for new products or services may be stimulated through promotional campaigns, as described below from the example from Harare. As an alternative to traditional emergency responses to outbreaks of waterborne disease involving the in-kind distribution of household water treatment chemicals, Oxfam in Zimbabwe initially worked with MSF Belgium to map market systems in Harare using GIS, to prioritise areas for intervention and map WASH facilities, market actors and service providers. Oxfam’s market analysis found that the majority of households could afford to purchase water purification chemicals, but chose not to because of their taste and smell, and the fact that they would be provided free of charge during an outbreak. Consequently, only a few market traders stock these items, and those who did reported little change in demand during an outbreak. In this context, Oxfam’s market development programme in Harare focused on promoting a locally manufactured water treatment product (Waterguard) using conditional vouchers in tandem with water quality monitoring and hygiene promotion. Demand was stimulated using a targeted ‘buy one get one free’ promotion. Increased sales have enabled market traders, such as the one shown, to develop and expand their business, which was an additional benefit of the programme.

Ensuring wider uptake of market-based programming

Although market-based programming potentially provides a wider set of benefits than traditional humanitarian programmes, there is often a narrow view of what PCMA can achieve and how it fits into the wider context of WASH humanitarian and development strategies. This is based on the under-standing that a PCMA is used in a specific crisis context, rather than as a means to reflect upon and potentially change the overall approach towards emergency responses. In addition, implementing the recommendations from PCMAs can be challenging due to the mandate and capacity of the organisation responsible for the analysis. Close collaboration and coordinated action is therefore required between humanitarian agencies, which are often responding to the needs of populations affected by the same crisis, but also between humanitarian and development agencies, for instance in integrating social protection and cash transfer programmes. Delivering these programmes requires expertise in market development and a good understanding of development programming, as much as it does experience working in emergencies. There is therefore a need for a concerted capacity-building effort in the sector, and a commitment from agencies to support this activity over a sustained period.

Jonathan Parkinson is a Principal Consultant at IMC Worldwide Ltd. Formerly he was Senior WASH Programme Development Advisor for Oxfam. Tim Forster is Technical Engineering Advisor (Sustainability Lead) and Esther Shaylor is WASH Knowledge and Communications Adviser, Oxfam. The authors would like to thank colleagues from Oxfam involved in the implementation of the programme, both past and present, for their support and contributions. The contents of this article are the responsibility of the authors and do not necessarily reflect the views of USAID or the US government.