The role of a social enterprise in achieving WASH impact

Posted in — Ghana Sanitation > Impact
March 18, 2021
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Photo by Chris Nicoletti, iDE, 2018
iDE Global WASH

In a weak market, building your own business might be the best path to create change.

iDE's goal in everything we do is to create long-lasting, sustainable change for the people, businesses, and markets with which we work. In Ghana, we have found that the clearest path to impact is to establish a social enterprise that can provide solutions to intractable WASH problems over the long term.

Understanding the context

Our initial market research in rural northern Ghana uncovered a nearly nonexistent WASH market full of unmet need. In 2014, according to the Demographic and Health Survey, only 9.6% of households in rural Ghana had an improved, unshared toilet facility, and over two-thirds had no facility at all. Compounding the problem was the absence of any sophisticated manufacturers or service providers that could be leveraged to meet such substantial WASH needs. This is in contrast to the market context in other iDE countries such as Bangladesh or Nepal, where stronger supply chains have allowed us to drive impact by building connections between existing market actors.

The unique context in Ghana underpinned how we designed our impact model. Because we didn't see any strong existing partners on the ground, we created Sama Sama, a social enterprise with the ultimate objective of generating sustained profit by becoming Ghana's leading provider of WASH products and services. Taking a social enterprise approach has several advantages.

Why we chose social enterprise

First, by positioning Sama Sama in the market as a business rather than a traditional NGO, we are able to (slowly) change consumer expectations for free or heavily discounted WASH products. Our customers have developed these expectations over time because the government and many development actors have provided subsidized toilets in an effort to improve sanitary conditions. This type of consumer attitude can cripple a burgeoning market of any kind and is especially damaging in markets for products like toilets, which customers don't typically prioritize.

Second, establishing a social enterprise has allowed us to design and sell Sama Sama-branded products which, over time, have come to represent quality, durability, and aspiration. This is a critical component of our business model, but it's also an important aspect of building a market system in which customer demand for high-quality products is great enough to support local businesses.

Finally, our business approach has afforded us credibility with key stakeholders aside from customers. We have crowded in local business partners — toilet business owners, or TBOs — by offering affiliation with a recognized and trusted brand in the community. Indeed, we've even started to see “copycat” businesses sprout up as the Sama Sama model gains traction. We have also established important partnerships with government representatives who are looking to understand market-based approaches to sanitation at the national, regional, and local levels.

Making an impact

Sama Sama has seen some promising results in the first several years of operation. As shown in the figure below, toilet sales have grown steadily over time and we had sold over 8,060 toilets as of January 2021. More important than these relatively short-term outcomes, though, is the fact that we've begun to build the business infrastructure that will allow Sama Sama to continue delivering impact over time.

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Ensuring a sustainable future

Starting a business anywhere in the world is challenging. Starting a social enterprise in a geographically dispersed, poor, and underdeveloped market like northern Ghana may look to outsiders like a nearly impossible proposition. But our results to date and the prospect for building a sustainable engine for change has convinced us that the Sama Sama model holds great potential for the future.

Ramping up our sales is the final frontier to achieving profitability for Sama Sama. Increasing our sales volumes so that the margins we make per sale—which are under constant pressure from inflation—are sufficient to cover the full operating costs to deliver these products and services to customers is a crucial step in achieving profitability. A rural, dispersed customer base is also a high-cost-to-serve customer base. But Sama Sama has never shied away from a challenge. And if it were easy, someone else would have already done it. We've gone further than anyone else in establishing a sustainable solution to the sanitation challenge in Ghana, and we're just getting started.

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Program undertaken with the financial support of the Government of Canada provided through Global Affairs Canada.