Poverty Penalty in Urban Water Market in Ghana

Public water companies in many countries in the global south struggle to meet the water needs of their growing urban populations, especially the urban poor. Consequently, the urban poor receive the worse form of water services mostly from unregulated water vendors and pay poverty penalty. Formalising the informal water vendors has only been mentioned in pro-poor water policies, but the reality only reveals policy rhetoric. This paper investigates the persistence of poverty penalty associated with water supply to the urban poor in Ghana from unregulated water vendors. The data used in the study were gathered through interviews with 78 water vendors (i.e. 53 fixed-point vendors and 25 mobile vendors) who were selected from two water-stressed poor urban communities and one poor urban settlement with water supply from the state utility provider. The results indicate that informal water vendors play a very important role in meeting the water needs of the urban poor. However, it was observed that the urban poor households paid a high-poverty premium for relying on these unregulated water vendors for their water needs. The paper concludes that a viable pro-poor water policy must strive to practically integrate the independent small-scale water providers in the urban water market in order to make an impact. Policy tools that can be used to integrate the private vendors into the urban water market and minimise the poverty penalty have been considered in the paper.