Sanitation and Business

More than one in ten people in the world (nearly 750 million) lack access to safe water and more than one in three people (2.5 billion) lack access to adequate sanitation.^[1]

One study shows that the lack of sanitation has cost countries anywhere from 1 percent to 7 percent of their GDP.^[2] Losses due to lack of safe water and sanitation are substantial in some of the world’s poorest countries. “Sub-Saharan Africa loses about 5% of GDP, or some $28.4 billion annually, a figure that exceed[ed] total aid flows and debt relief to the region in 2003.” On the other hand, “every $1 spent in the sector creates on average another $8 in costs averted and productivity gained.”^[3] A recent World Health Organization study recently showed that a dollar invested in improved sanitation had an economic return of $2.80-$8.00 USD, depending on the nation and technology used, with a world average of $5.50 USD.^[4]

People living in rural communities make up the vast majority of those living without clean water and improved sanitation. In lesser developed nations in Africa and Asia, these communities are disproportionately dependent on natural resources in order to live and generate income and therefore endure a heavier burden induced by unsafe water and lack of access to sanitation.^[5]

At any given time, nearly half of the population of the developing world suffers from illness caused by lack of access to safe water and sanitation.[6] Due to the high rate of diarrheal diseases worldwide as a result of inadequate sanitation, many are forced to miss work due to illness, losing out on business gains for the duration of their illness. Often individuals have no choice but to attend work where sanitation facilities are not available and open defecation is practiced, exposing them and fellow workers to disease and illness. Schools in rural areas find it particularly hard to retain teachers without nearby latrines. Areas around schools and public markets are often contaminated with human waste, helping spread diarrheal disease even further among students and small businesses.

Clean water and adequate sanitation, even simple projects like wells, spring caps, and latrines, are vital inputs for economic development as well as poverty and disease alleviation. Access to adequate sanitation is crucial for communities to maintain businesses, and increasing the availability of sanitation facilities close to homes, schools, and businesses remains essential for all growing economies in Africa and Asia.

[1] WHO and UNICEF Joint Monitoring Programme for Water Supply and Sanitation, Progress on Drinking Water and Sanitation: 2014 Update (Geneva: WHO Press, 2014), 8.

[2] Hutton G, Rodriguez UE, Napitupulu L, Thang P, Kov P, “Economic impacts of sanitation in Southeast Asia: summary report.” (World Bank: Water and Sanitation Program, 2007), 3.

[3] United Nations Development Program, Beyond Scarcity: Power, Poverty and the Global Water Crisis, Human Development Report (2006), 6.

[4] Guy Hutton, Global costs and benefits of drinking water supply and sanitation interventions to reach the MDG target and universal coverage (Geneva: WHO, 2012), 4.

[5] Stockholm International Water Institute. Making Water a Part of Economic Development: The Benefits of Improved Water Management Services, 2005, 16-19.

[6] United Nations Development Program, Beyond Scarcity: Power, Poverty and the Global Water Crisis, Human Development Report (2006), 6.