Applied Economics

ISSN: 0003-6846 (Print) 1466-4283 (Online) Journal homepage: http://www.tandfonline.com/loi/raec20

Comparative evaluation of the cost of water in

northern Malawi: from rural water wells to science
education
Rochelle Holm, Wales Singini & Simeon Gwayi
To cite this article: Rochelle Holm, Wales Singini & Simeon Gwayi (2016): Comparative
evaluation of the cost of water in northern Malawi: from rural water wells to science education,
Applied Economics
To link to this article: http://dx.doi.org/10.1080/00036846.2016.1161719

Published online: 30 Mar 2016.

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Date: 30 March 2016, At: 22:47

APPLIED ECONOMICS, 2016

http://dx.doi.org/10.1080/00036846.2016.1161719

Comparative evaluation of the cost of water in northern Malawi: from rural

water wells to science education
Rochelle Holm

, Wales Singinib and Simeon Gwayic

a
Centre of Excellence in Water and Sanitation, Mzuzu University, Mzuzu 2, Malawi; bDepartment of Fisheries, Mzuzu University, Mzuzu 2,
Malawi; cDepartment of Physics, Mzuzu University, Mzuzu 2, Malawi

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ABSTRACT

Worldwide, improved sources of drinking water are still lacking for 663 million people. With
Malawi as a case study, we aim to address the scarcity of data available to understand the full
cost and options of drinking water at a regional level covering both urban and rural areas. We
studied options in the northern region of Malawi under the following thematic areas: urban
piped water, water wells, handpump spare part supply networks, household point-of-use water
treatment, the cost of entering a water business and capacity building in science education.
Primary locally sourced data were collected as well as secondary publically available data.
Additionally, local markets were surveyed for spare part networks. This research has shown
that when looking at water resource economics in northern Malawi, it is not a monopoly and
options are available at a range of costs. The data challenge policy-makers to reach the last 10%
of the population still lacking improved drinking water. This will require a combination of
expansion of urban piped water infrastructure, new boreholes in rural areas, increased handpump functionality rates, scale-up of household drinking water point-of-use treatment and
growth of local universities to train local experts within the sector.

I. Introduction
Worldwide, improved sources of drinking water are
still lacking for 663 million people (WHO/UNICEF
2015). Globally, the costs and benefits across a range
of water and sanitation service interventions is well
studied (WHO 2004). A strong economic case has
been made for investing in improved water supply
and sanitation in developing countries, where costbenefit ratios suggest at least USD 5 in economic
benefit per USD 1 invested (Hutton, Haller, and
Bartram 2007). While many of the least developed
countries have met the Millennium Development
Goal (MDG) target for water, in Malawi 10% of
the population, mostly rural, remains without access
to improved sources (United Nations 2015a; WHO/
UNICEF 2015). Reaching this last 10% of the population and working towards the sustainable development goals (SDG) will require creative and
innovative strategies (United Nations 2015b).
Water resource economics includes consumptive
(e.g. drinking, sanitation and hygiene) and nonconsumptive
categories
(e.g.
agriculture
and
CONTACT Rochelle Holm

rochelle@rochelleholm.com

2016 Informa UK Limited, trading as Taylor & Francis Group

KEYWORDS

Water resource economics;

national policy; Malawi
JEL CLASSIFICATION

O55; Q25; I31

manufacturing). The cost of water in Organisation

for Economic Co-operation and Development countries is well studied (OECD 2010), and shows the
complexity of the cost of water in developed and
developing counties. Globally, even in developing
countries there is a willingness to pay for improved
water supply service (Al-Ghuraiz and Enshassi 2005;
Briscoe 1992; Casey, Kahn, and Rivas 2006). Rogers,
de Silva, and Bhatia (2002) argue that it is possible to
achieve water pricing with equity, efficiency and
sustainability, even for the poor. Beyond general
truths across many countries, local particulars matter. Water resource management in Botswana offers
a unique economic perspective on the cost of water
in a developing country where diamond mining
offers high economic returns of nonconsumptive
water use (Rahm, Swatuk, and Matheny 2006).
Although one of the least developed countries in
the world, there is a strong legal framework in
Malawi to support the cost and options of improved
household water supply, and against monopoly. The
National Water Policy (Malawi Government 2005)
guides both urban and rural water supply. The

Downloaded by [196.216.8.133] at 22:47 30 March 2016

R. HOLM ET AL.

policy states a vision of Water and Sanitation for

All, Always. The policy also references social and
economic development benefits of water, and interestingly, spare part supply networks for handpumps
are specifically listed as a role for the private sector.
Water is also referenced in the Public Private
Partnership
Policy
Framework
(Malawi
Government 2011). Additionally, while a household
point-of-use drinking water treatment National
Action Plan has been proposed, it has not yet been
signed. The National Water Policy (Malawi
Government 2005) makes reference to use of portable treatment units for disaster response water
supply as point-of-use, and the National
Environmental Health Policy (Malawi Government
2010) includes a strategy to Strengthen water treatment at point-of-use. Lastly, the National Water
Policy specifically notes the need for local university
and training institutions to build the capacity within
the water sector (Malawi Government 2005).
This study is informed by the Integrated Water
Resources Management (IWRM) framework.
Motivated by the lack of data, water resource economics in Malawi requires an examination of the
cost of improved drinking water, from water wells to
science education, with a new lens. The aim of our
study is to address the scarcity of data available to
understand the full cost and options of drinking
water at a regional level, covering both urban and
rural areas, to ensure policy-makers and implementers are working towards the SDGs. Therefore, this
study sets out to bridge the information gap and
discusses water economic issues under the following
thematic areas: urban piped water, water wells,
handpump spare part supply networks, household
point-of-use water treatment, the cost of entering a
water business and capacity building in science
education.
II. Materials and method
This study was conducted in the east African country of Malawi, and specifically the authors studied
water options within the northern region in 2015
and 2016 (Figure 1). The northern region has a
population of 1.7 million and covers an area of
26,931 km2 (Malawi Government 2009). 21 businesses were purposively surveyed in the northern
region including Ekwendeni trading centre (1),

Karonga district centre (5), Mzimba district centre

(6), Mzuzu city (4), Nkhata Bay district centre (3)
and Rumphi district centre (2) in person using a
checklist for handpump spare part availability and
public pricing in a given geographic area. Data on
water well cost, household point-of-use water treatment and the cost of entering the water business
were collected from existing technical reports ancillary to the work at Mzuzu University. In addition,
secondary publically available data were compiled,
including commercial rates from the Northern
Region Water Board (NRWB), which supplies
urban piped water, and graduation and tuition
rates from Mzuzu University. At the time of the
study, the exchange rate was 500 Malawi Kwacha
(MK) = 1 USD, with a headline inflation for May
2015 at 19.5% (National Statistics Office 2015). Fuel
prices set by the government were MK 734.60/L
(USD 1.47/L) diesel and MK 723.6/L (USD 1.45/L)
for petrol (November 2015). The local minimum
wage was MK 18,000/month (USD 36/month). The
study does not cover cost recovery. Ethical clearance
for this study was obtained from the Republic of
Malawi, National Commission for Science and
Technology (protocol number P.12/15/67).
The data were analysed using Microsoft Excel.
The data for spare parts were summarized as ranges
and represented in tables. The data for postpaid
volume charges for NRWB, 20122015 (excluding
service charges), used the weight reference period
20102011 (based on expenditure data collected
from 20102011) and an index reference period of
2012 (2012 = 100).

III. Results
Urban piped water

Municipal piped water in Malawi is supplied

through five water boards, geographically grouped
to organize supply in the northern, central and
southern region, plus the cities of Lilongwe and
Blantyre. Piped water services for the northern
region of Malawi are covered by the NRWB. Water
boards were established as a corporate body, under
the Waterworks Act Number 17 of 1995 with a
mandate to operate as a profitable, efficient and
commercially viable business for urban areas. The
systems at the NRWB are similar to other regions

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APPLIED ECONOMICS

Figure 1. Study area, northern Malawi.

(Malawi Government 1995). Charges are collected

and remitted locally. Historically, the NRWB has
supplied customers on a postpaid billing arrangement, where consumers pay water bills after usage.
It is a fixed minimum plus variable-volume costing
model. Since 2013, the NRWB has also added household and industrial prepaid water connections and is
continuing to transition more customers from the
postpaid to the prepaid service model.
Mzuzu is the largest urban town in northern
Malawi, with a population of 133,968. In Mzuzu,
81.6% of households have access to piped water
from the NRWB, with the gap in service primarily
attributed to the recently established high-density
areas on the edge of the city growing at an increasing, and unplanned, rate due to rural to urban
migration (Mzuzu City Council 2014). Although
households in Mzuzu may have access to safe

piped water, through community neighbourhood

kiosks or household connections, they are not necessarily using it for drinking or willing to pay for the
piped water service and instead may still be using
well water. In a study by Holm (2012), households in
Mzuzu were observed to be consuming shallow dug
well water although municipal piped water was less
than 100 m away. One respondent offered, We
mostly use the shallow well water because the water
board (NRWB) is fond of raising up the price each
and every month. It seems as if they are charging per
20 L not per month. There are no households which
are serviced by water tankers in Mzuzu.
The cost of water from NRWB is based on a flat
rate, with volume and consumer categories
(Table 1). When considering the minimum volume
charge, there has been an inflation-adjusted increase
in the cost of water from 2012 to 2015. The

Real

89.40
84.28
92.52
89.40
107.28
177.66
59.58
56.17
61.66
59.58
71.50
118.40
394.87
372.27
408.62
394.87
473.84
784.69
163.17
166.65
198.17
163.17
212.12
380.55
152.50
155.76
185.21
587.85
600.40
713.93
100.000
127.283
192.033
2012
2013
2015

587.85
764.21
1370.98

152.50
198.25
355.66

>6 CU.M

Nominal
Real

3.0016 CU.M

Nominal
Real
Average consumer price index (2012 base)
Year

Nominal

Nominal

Real

Nominal

Real

Nominal

Real

Communal water points

03 CU.M
>6 CU.M
Individual-low density area

3.0016 CU.M
03 CU.M

Real

148.48
145.82
173.39
148.48
185.60
332.97
138.77
136.28
162.05
138.77
173.46
311.19
534.93
525.33
624.67
534.93
668.66
1199.58
130.30
125.92
149.72
130.30
160.27
287.52
121.78
117.68
139.93
121.78
149.79
268.72
469.45
453.65
539.44
100.000
127.283
192.033
2012
2013
2015

469.45
577.42
1035.90

Nominal
Real

3.0016 CU.M

Nominal
Real
Nominal
Real
Nominal
Real
Nominal
Real
Nominal
Average consumer price index (2012 base)

Individual-medium density area

03 CU.M
03 CU.M

3.0016 CU.M

>6 CU.M

Charges (MK)
Individual-traditional area

Table 1. Post-paid volume charges (Malawian Kwacha nominal and inflation-adjusted real) for Northern Region Water Board, 20122015 (excluding service charges).

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>6 CU.M

R. HOLM ET AL.

Year

inflation-adjusted increase has been highest for individual-traditional areas (15%), individual-medium
density area (17%), individual-low density area
(21%) and the least for communal water points (3%).
There is an additional cost of time with public
taps/standpipes which requires travelling outside the
home for water collection, and possibly further waiting in long queues which are not included in this
cost. In Mzuzu, 98% of households travel less than
14 minutes to the nearest drinking water source,
which compares more favourably to other urban
areas of Malawi such as Lilongwe (82%), Blantyre
(91%) and Zomba (96%) (Mzuzu City Council
2014). However, installation of individual household
connections can at times have long lead times by the
NRWB technicians. In northern Malawi, the poorest
members of the community who would inhabit the
traditional or communal water point areas pay the
lowest cost for water per volume unit.
Comparing volume charges to other urban residential developed areas (excluding service charges)
provides a perspective on water resource economics
in Malawi. In 2015, individual households in a medium density area of Mzuzu would pay a flat rate of
MK 1200 (USD 2.40) for 3000 L of water from the
NRWB. This same amount of water in developed
countries would cost MK 3957 (USD 8) of metered
water in London (Thames Water 2015) or would
cost MK 2720 (USD 5.44) in Seattle (USA) (City of
Seattle 2015). In Johannesburg, South Africa, up to
the first 6000 L of residential water is at no cost (City
of Johannesburg 2015). Another interesting comparison is the first step of the NRWB volume charge is
at 3000 L, whereas Johannesburg is at 6000 L and the
first step of the Seattle volume charge is per 14,158 L,
a telling example of the difference in water volume
usage between the ranges of developed to least developed countries.
Water wells

Water wells are being installed primarily in rural

areas of northern Malawi both by traditional
machine drilling and also more recently by manual
drilling. A manually drilled household water well
with a locally manufactured Rope pump would typically cost MK 600,000 (USD 1200) at a depth of
approximately 25 m. In comparison, the installation
of a machine-drilled community borehole with an

APPLIED ECONOMICS

imported Afridev handpump would cost MK

3,600,000-4,500,000 (USD 7200-9000) at depths of
25-50 m. In addition to drilled wells, shallow wells
with local handpumps are also still being installed in
rural parts of northern Malawi by nongovernmental
organizations (NGO) in partnership with local communities. Since 1990, one organization, Marion
Medical Mission, operating in Zambia, Tanzania
and Malawi has provided in total more than 10,000
rural shallow wells with local handpumps at a current cost of MK 200,000 (USD 400) (Marion Medical
Mission 2015).

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Spare parts supply network

The Afridev handpump is one of the most common

community pumps in Malawi. A survey of the five
northern Malawi market areas in 2016 found a range
of prices, quality and availability of the most common pump spare parts as shown in Table 2. Spare
parts availability was based on individual market
demands; no NGOs were found selling spare parts
in northern Malawi. However, Marion Medical
Mission has an internal spare parts network, and
Rope pump spare parts are common materials
found at the local market. While U-seals and
O-rings, a common part to wear out on Afridev
handpumps, appear to be available in each of the
areas surveyed, pipes and nuts were only available in
the larger locations of Karonga, Mzimba, Mzuzu and
Nkhata Bay.
Household point-of-use water treatment

There are two low-cost household point-of-use

drinking water treatment options readily available
in urban and rural areas of northern Malawi (Rowe
2012). The most common option is chlorine sold as
Water Guard, a 1.25% solution of sodium hypochlorite, available at retail outlets. Water Guard is
sold in a 150 ml bottle for MK 180 (USD 0.36), for a
dosage to treat 1000 L of water (MK 0.18/L; USD
0.00036/L). This compares to a single serving,
300 ml, bottle of local Coke at a cost of MK 160
(USD 0.32), or a 500 ml bottle of bottled water
priced at MK 250 (USD 0.50).
An additional household point-of-use drinking
water treatment available in Mzuzu is the tulip filter,
an imported candle-type filter element from Basic

Water Needs (Amsterdam, The Netherlands) made

from diatomaceous earth and silver and assembled
with a local plastic bucket and tap setup. It is a nonelectric counter-top filter. The filters are available
from small-scale local entrepreneurs in the Mzuzu
area. The filtering capacity of a single candle is
7000 L, which equates to a cost of MK 0.55/L
(USD 0.0011/L) in the first year. While household
sales are just starting, most filters at this time are
reportedly being sold to NGOs. The cost basis for
the filters includes the cost from the factory, local
customs, government value added tax (VAT) and the
cost of the local bucket and tap. There are no
reverse-osmosis water systems in the market in
northern Malawi.
Cost of entering the water business

In Malawi, loans may originate from informal lenders, such as family and friends, or formally through
local and international banks in a complementary
credit system. Informal lending especially meets
rural short-term consumption needs, whereas formal
lending is often used for agricultural production or
nonfarm diversification activities. Malawi credit systems are mostly based on group lending and joint
liability by lending to 5-10 individuals, which is distinctly different from countries such as the United
States or the United Kingdom which is often focused
on individual household lending systems. The
Malawian loan system often requires borrowers to
attend meetings to be eligible for credit, a unique
added cost to borrowers of time as a nonprice attribute. Inflation (and interest) rates have been volatile
and unpredictable in recent years. Bank interest rates
(nominal) in Malawi have historically ranged from
54% in 19951996 to 37% in 1996 (Diagne and Zeller
2001). In 2014, the nominal commercial bank loan
rates hovered around 40% interest per year.
The cost of entering the water business, such as for
a small business offering manually drilled household
water wells, is particularly expensive, due to the high
cost of business start-up loans. In 2014, the Mzuzu
University SMART Centre, which is training smallscale water businesses, linked these businesses with
commercial loan facilities. The programme evaluation results found water businesses would not qualify
for large- or medium-size banking institutional loan
programmes due to a lack of collateral and lack of

MK 241-350
MK 241-900
MK 450
MK 900

MK 390-650
MK 160-300 MK 500-650

MK 160-350 MK 520-720
MK 160-900 MK 520-900

MK 800010,500
MK 6500
MK 6500-8570

MK 390-1500

MK 520-1500

MK 160MK 790-1500 MK 6500

1000
MK 150-350 MK 520-1500 MK 5000-8570

bank account history. Tools for Enterprise and

Education Consultants (TEEC) is a Malawian entrepreneurship, economic and education development
consultancy linked with the programme to provide
loans and business training for people who had
shown interest in water and sanitation business.
About 20 people were invited to the programme.
The business education training was free to participants, but they were required to qualify for the loan
application procedure. The programme was designed
to maximize the number of participants who would
qualify for loans, and yet, some participants attended
only the first day and then dropped off for unknown
reasons. 13 of the 20 participants in need of business
loans finished the 1-week course. Ultimately, loans
with a payback term of 6 months were only offered by
TEECs to those with an established business and
business plan, not those looking to start a business.
Loans ranging from MK 100,000 to 300,000 (USD 200
to 600) were disbursed to four participants at an
interest of 30% payable over 6 months based on
criteria of having an established successful business
where a loan would allow business growth. Only three
loans were paid back on time. Although a small lending programme, evaluation shows there is interest by
water and sanitation business for small loans to allow
business growth.

MK 30,00050,000
MK 45,00065,000
MK 75,000
MK 45,195

MK 200MK
MK 25001500
268-4000
5000
Mzimba
MK 400-700 MK 268-700 MK 18202500
Mzuzu
MK 200-550 MK 268-650 MK 18206500
Nkhatabay MK 380-420 MK 268-595 MK 4500
Rumphi
MK 200-900 MK 268-900 MK 18203500

MK 45004500
MK 49506500
MK 49508950
MK 6500
MK 49156500

MK 85,000

Science education

Karonga

Bobbin

MK 6001000
MK 1501000
MK 241-500

MK 79009500
MK 1500MK 180-250 MK 25005000
6100
MK 5000MK 350-500 MK 61005850
7500
MK 6500
MK 450
MK 6100
Not available Not
MK 6100
available

MK 6100

Foot valve
Nuts
Pipes

Not available Not

available
MK 5000
MK 2500
MK 390
MK 8570
MK 520
MK 160
Not available
MK 4950
MK 1820
MK 600

Rod
centralizer
Pump rod
Bush
bearings
O-ring
Cylinder
Plunger rod
Plastic
plunger
Cup-seal
U-seal
Location

Table 2. Spare part availability and cost (Malawian Kwacha), major market areas of northern Malawi, 2016.

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MK 241

R. HOLM ET AL.

Ekwendeni MK 200

Progress towards safe water for urban and rural

areas cannot be achieved without trained professionals. Yet, evaluation of the costs and options of
improved drinking water often excludes capacity
building of local subject matter experts. Historically
in Malawi, many bachelors and postgraduates within
the water sector have been trained outside Malawi
due to lack of university programmes, but things are
changing. Mzuzu University, located in Mzuzu city,
was established by an Act of Parliament in May 1997
and admitted its first students in January 1999.
Within the Faculty of Environmental Sciences,
Mzuzu University offers a bachelor of science degree
in water resource management and development.
Graduates often go on to support governmental
and NGO water and sanitation project implementations countrywide. The programme graduated 40
students in 2013, 48 students in 2014 and 56 students in 2015. In 2015, tuition and fees per year were

APPLIED ECONOMICS

MK 250,000 (USD 500) for both government-sponsored and self-sponsored Malawian students, MK
750,000 (USD 1500) for non-Malawian students
from Southern African Development Community
(SADC) countries and MK 1,500,000 (USD 3000)
for non-Malawian students from non-SADC countries. In 2012, there was an increase in tuition fee per
year of MK 55,000 (USD 110) for government-sponsored and MK 168,100 (USD 336) for self-sponsored
Malawian students.

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IV. Discussion
To advance IWRM in Malawi, the significance and
broader implications of water resource economics
must be understood in both practice and policy.
When comparisons of cost are made against urban
piped water, installation of wells, maintenance of
wells, household point-of-use water treatment, the
cost of entering the water business, and capacity
building within the sector, benchmark data can
also provide an indication into the value of water
at a local level. This study has shown a range of
the high and low costs of water in Malawi
(Figure 2). Although the output units across
these categories are different, it is informative to
compare results to show it is not a monopoly.
Even the spare part survey results show cost
ranges from a low of MK 150 (USD 0.30) for an
O-ring, a common spare part for an Afridev pump
that was available in each of the cities surveyed, to
MK 85,000 (USD 170) for an Afridev pump
cylinder.

Figure 2. Cost of water by option, northern Malawi.

Although urban piped water customers have a negative perception of the pricing structure in Mzuzu, the
poor do not pay more for a volume unit of water than
higher-income households. But this does not guarantee that the poor can afford piped water. This is further
complicated in another report of piped water systems
in Malawi by Jimu (2008) where in Blantyre some areas
with neighbourhood communal piped water taps, thus
qualifying the area as having improved access to drinking water per the MDG, had weak local management
which resulted in disconnection of service due to nonpayment. Disconnection of water service for the urban
poor is not only a technical concern but also political
and legal as has been shown in South Africa (Smith and
Hanson 2003; Bond and Dugard 2008). Heino and
Takala (2015), based on a review in Finland, further
show there are both rational and emotional ties to
payments for water services. Mara and Alabaster
(2008) suggest that unmetered standpipe water tariff
cooperatives pay a 12% portion of the local minimum
wage, while yard-tap cooperatives pay a higher proportion (35% of local minimum wage), and further add
that in-house taps should be metered. They also propose water tariffs split equally among 10 times per year,
instead of 12. In Malawi, this idea is particularly interesting to limit payments during the 2-month hungry
season of February-March to give a break in water
tariffs, though collection rates may not be high enough
to cover NRWB system costs. As well, for the lowestincome individuals and households, in the traditional
areas, the minimum volume charge (not including the
service charge) is already at 3% of the local minimum
monthly wage.

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R. HOLM ET AL.

Bakker (2001) notes in England and Wales, temporal and spatial cross-subsidies exist in piped water
pricing and there is a false paradox between equity
and efficiency. Further,Jaglin (2002) points out the
often unmentioned challenge of piped water supply
in peri-urban, illegal, areas which are rapidly growing. In this case, is it equitable for water supply
infrastructure costs to be covered by low-income
households who have recently moved into new illegal areas? In Mzuzu the NRWB is currently working
with NGOs, including Plan Malawi and Red Cross,
as intermediaries to provide such infrastructure
expansion in these peri-urban areas.
The functionality rate of handpumps in subSaharan Africa is reported to be 64% based on data
from 20 countries, and 60% for Malawi (Rural Water
Supply Network 2009). When looking at cost, fixing
and maintaining handpumps at a community level
with local spare parts is one of the lowest costs,
whereas drilling a new machine-drilled community
borehole with an imported handpump has the highest cost. Where there are no hard rock layers present,
six manually drilled household water wells with a
Rope pump could be placed in an area for the same
price as one machine-drilled community borehole
with an imported Afridev pump.
Availability of spare parts is essential for improving
handpump functionality rates. In an earlier supply
chain study in Malawi, McNicholl (2011) observed:
Rather than cost or travel distance, it is a communitys
ability to mobilize and take ownership over pump
repair that seems to have the most noticeable effect
on pump breakdown durations. The ability of a community to cover the cost of even a simple repair may
be compromised by (a) an alternative water source that
reduces the pertinence of repairing the broken well or
(b) an ambiguous definition of responsibility where
communities believe someone else will provide either
funding or repair services. Access to spare parts, however, is not the chief constraint (page 8).

Similarly, Koestler, Kahorha, and Biteete (2014) also

found supply chains based on individual market
demands in the Democratic Republic of Congo
based critically on the number of handpumps
installed within a given area and functioning water
committees at the handpump.
In fact, the results from this study have also found
the cost of one machine-drilled well with an Afridev
pump is equal to the cost of tuition and fees for

several students within the bachelor of science in

water resource management and development programme at Mzuzu University. Although the benefits
of a machine-drilled well most directly impact
nearby households, higher- education degreeholders will impact the entire country towards
improved water supply. Loans or scholarships to
university programmes are not often linked to a
lower cost of water and improved access to drinking
water, ensuring safe and sustainable supplies, but
this important link should be seriously considered.
In Malawi, 32.6% of the population reports using
an appropriate point-of-use water treatment method
prior to drinking, including boiling, chlorine, straining, filtering, or solar disinfecting (Malawi
Government National Statistical Office and ICF
Macro 2011). Although only cost was considered in
this study, household point-of-use water treatment
methods need to also consider that there is no manufacturer in Malawi at this time. Work by
Massachusetts Institute of Technology (2015) in
India noted households generally replaced non-electric water filters every 5 years, but when considering
the total cost of ownership calculation, the study
found few gravity non-electric models were affordable for poor households by UN standards which is
also likely to apply to Malawi.
However, we have found that it is not straightforward for the private sector to provide expanded
water supply service in Malawi. Bank loan criteria
and rates may be prohibitive to individuals entering
the water business. Globally, in only five countries
does the private water supply trend dominate (over
50% of population served): Chile, the Czech
Republic, France, Malaysia and England. Of note,
none of these countries is in Africa. Even private
water supply in the United States has decreased from
94% in 1800 to 49% in 2005. In the United States,
private water supply currently serves mostly small
communities and is often negatively perceived by the
population (Prard 2009). It has also been found that
private sector participation, when considering cost
of funds, transaction costs, efficiency and political
costs, does not systematically have a significantly
positive effect on water system efficiency (Prard
2009). Greater awareness is needed of the opportunity for the private sector to serve the last 10% of the
population with improved water supply, yet recognizing privatization of water in Malawi alone is not

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APPLIED ECONOMICS

the full answer. There also needs to be some government oversight to ensure that the provider is profitable while customers are not overcharged, as well as
ensuring the sustainability of water supply for the
future.
A new look is needed in which policy-makers
move away from only the big option of installing
new machine-drilled community boreholes and
urban piped water. Policies need to more often
include training of local experts within the sector,
such as in bachelor of science programmes. Within
the IWRM framework, capacity development in
science education is essential for better water
resource management. Even though the output of
graduates within the water sector has been low, in
the case of Mzuzu University, it has steadily been
increasing over the past few years. These graduates
are contributing to greater efficiency of service delivery in the water sector in the country. Water-related
challenges can thus be effectively addressed through
an interdisciplinary approach with professionals in
the water sector working in collaboration with peers
in other relevant disciplines or sectors.

V. Conclusion
The aim of our study was to address the scarcity of
data available to understand the full cost and options
of improved drinking water at a regional level covering both urban and rural areas to ensure policymakers and implementers in a developing country
are working towards the SDGs. This research shows
the national policy framework in Malawi has strong
alternatives that provide options towards access.
This report paves the way forward to show households have options at a regional level. Many initiatives are being undertaken by the government, the
private sector and NGOs.
One thing that further examination finds missing
is access to financing for improved water supply,
inclusive of both lower interest rates and flexible
granting criteria, for water businesses. Additionally,
urban piped water systems in Malawi should do a
better job to remove the negative perception of the
pricing structure, which may also be better achieved
with the new prepaid service model. Further work is
also needed to investigate the potential for rain water
opportunities in Malawi.

In Malawi, national policy supports choices over

urban piped water, installation of wells, maintenance
of wells, household point-of-use water treatment, the
cost of entering the water business and capacity
building within the sector. Yet, the water vulnerability link is especially complicated as poverty often
forces people into solving immediate consumptive
needs, such as opting for imperfect repairs for a
broken handpump which might come at a low initial
cost, yet still prove more expensive in the medium
term than a more thorough fix. Even further
removed, for many people, are the truly long-term
choices that would help move communities out of
poverty and improve water supply, such as training
their children as new water professionals at the local
university. This research has shown that when looking at water resource economics in northern Malawi,
it is not a monopoly and options are available at a
range of costs. The data challenge policy-makers to
reach the last 10% of the population still lacking
improved drinking water. This will require a combination of expansion of urban piped water infrastructure, new boreholes in rural areas, increased
handpump functionality rates, scale-up of household
water point-of-use treatment and growth of local
universities to train local experts within the sector.

Acknowledgements
The study design, data collection, analysis and interpretation
of the results were undertaken exclusively by the authors.
Data are available from mzuniwatsan@gmail.com. The
authors thank Victor Kasulo and Kip McGilliard for their
support in the final report review.

Disclosure statement
No potential conflict of interest was reported by the authors.

ORCID
Rochelle Holm

http://orcid.org/0000-0001-8849-1390

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