Financial and economic analysis - Factsheet of Working Group 2

Parkinson, J., Hutton, G., Pfeiffer, V., Blume, S., Feiereisen, P. (2012)

Published in: 2012

Publisher:
Sustainable Sanitation Alliance (SuSanA)

Author:
Parkinson, J., Hutton, G., Pfeiffer, V., Blume, S., Feiereisen, P.

Uploaded by:
SuSanA secretariat


6190 Views
257 Downloads

Content - Summary

This factsheet introduces financial and economic costs and benefits in relation to sanitation systems. It provides an overview of analytical approaches for comparing sanitation interventions using financial and economic analyses and illustrates these using results from various studies. The target group of this factsheet includes sanitation practitioners, researchers, policy makers and their advisers. The main focus is to provide a basis for informed choice based on financial decisions concerning the scaling up of sanitation services.

Financial and economic analyses are a crucial part of feasibility studies assessing the benefits of improved sanitation and thus feed into policy decisions, sanitation programming and project design. The data generated by financial and economic analyses have major implications for the programming and design of sanitation projects, and are therefore crucial for the planning and delivery of affordable and sustainable sanitation services.

In order to assess the relative sustainability of sanitation options, a range if comparative studies need to be conducted to show the real costs and benefits of moving from unimproved to improved and more sustainable sanitation options.

A comparison of costs and benefits of different sanitation options using economic and financial analyses provides a justification for investments in sanitation in the first instance and enables decision makers to allocate limited resources more efficiently. Financial analyses only measure the costs and benefits that have direct and measurable financial implications, whereas economic analyses include all broader costs and benefits, including those that do not have financial implications. For instance the costs for premature mortality are economic rather than financial.

Capital expenditure (CAPEX), operational expenditure (OPEX) and capital maintenance expenditure (CapManEx) are the key parameters for both the financial and economic assessment of sanitation options. Important tools for financial and economic analysis include the costeffectiveness ratio, Benefit-Cost Ratio (BCR), Net Present Value (NPV), or Internal Rate of Return (IRR). Key indicators for setting tariff structures and the assurance of affordability include: i) Full cost of sanitation per capita as a percentage of per capita GDP, ii) Cost of access to sanitation as a percentage of household income, iii) Annual cost of sanitation as a percentage of household income, iv) Long run marginal cost and cost of sanitation services as a percentage of water tariffs. Economic analysis can also be usedn to assess the cost benefit of investments in sanitation in relation to other types of development interventions.

Last updated: 30 April 2012

Bibliographic information

Parkinson, J., Hutton, G., Pfeiffer, V., Blume, S., Feiereisen, P. (2012). Financial and economic analysis - Factsheet of Working Group 2. Sustainable Sanitation Alliance (SuSanA)

Filter tags

English Factsheets and policy briefs Market development (WG2) Publications by SuSanA Publications by SuSanA

Download

Financial and economic anlysis - Factsheet WG 2

Format: pdf file
Size: 0.33 MB

Share this page on    


Follow us on    

SuSanA Partners  currently 349 partners

Sanitation events

SuSanA newsletter

Stay informed about the activities of SuSanA and its partners. The SuSanA newsletter is sent out around four times per year. It contains information about news, events, new partners, projects, discussions and publications of the SuSanA network.

Subscribe to newsletter »

Latest tweets mentioning SuSanA

Tweets mentioning SuSanA »

28th SuSanA meeting, Stockholm

The next SuSanA meeting will take place in Stockholm, Sweden. We will meet on the 24th of August, just before the World Water Week 2019 begins. More information will be available soon.

Find out more about the meeting! 

SuSanA meetings

Jobs

 


close  

 

Resources and publications

Our library has more than 2300 publications, factsheets, presentations, drawings etc. from many different organisations. It continues to grow thanks to the contributions from our partners.

Add item to library »

The three links below take you to special groups of items in the library for more convenient access:

Projects

The project database contains nearly 400 sanitation projects of many different organizations dealing with research, implementation, advocacy, capacity development etc. Advanced filtering functions and a global map are also available. Information on how and why this database was created is here.

People working for SuSanA partners can add their own projects through their partner profile page. You might need your SuSanA login upgraded for this purpose. Please contact us if you would like to add a project.


Trainings, conference and events materials

Missed important conferences or courses? Catch up by using their materials for self study. These materials have been kindly provided by SuSanA partners.

Regional chapters

Use the map or the search tool to access the most relevant information and knowledge products for your region or country. This includes relevant resources, events, partners or projects.

Shit flow diagrams (SFDs), excreta flow diagrams

Shit flow diagrams (SFDs) help to visualize excreta management in urban settings. Access SFDs and more through the SFD Portal.

 


close  

 

Discussion forum

Share knowledge, exchange experiences, discuss challenges, make announcements, ask questions and more. Hint: Your discussion forum login is the same as your SuSanA login. More about the forum's philosophy »


Integrated content

We are hosting content from some other communities of practice and information-sharing portals. This section also provides a link to SuSanA's Sanitation Wikipedia initiative.

Suggest content to add »

SuSanA partners

Not yet a SuSana partner? Show your organisation's support to SuSanA's vision and engage in  knowledge sharing by becoming partners.

Apply to become a partner »


Individual membership

Register as an individual member of SuSanA free of charge. As a member you can interact with thousands of sanitation enthusiasts on the discussion forum.  You can also get engaged in one of our 13 working groups and our regional chapters. Our FAQs explain the benefits further.

By getting a SuSanA login you can fully participate in the SuSanA community!

Register as a member

Login


Forgot your password?

 


close