“Money is Not the Problem”: The Slow Financialisation of Kenya’s Water Sector

Abstract

This paper analyses the "arduous and contingent" process of creating the "preconditions" for financialised forms of development in urban Kenya. Building on a growing critical literature on how finance is shaping development in the global South, the paper traces the more-or-less concerted effort of an array of actors and intermediaries to create a functioning market for urban water services. Such efforts, which are justified through appeals to a "finance gap" are an attempt to connect capital seeking profitable investment opportunities with a sector long starved of funding. The pursuit of financialised models of water provision, however, is deepening the gulf between service areas that are deemed profitable (or potentially profitable) and those that are not. The paper argues that it is not lack of money, but an emerging system of water service provision which prioritises commercial principles and value extraction, that shapes where investment does (and crucially) does not flow.

Sustainable Water Infrastructure: Visions and Options for Sub-Saharan Africa

“…In addition, these instruments require institutional and human capacity, local capital and financial markets, and specific conditional requirements for access and successful incorporation, which are lacking in low-income countries where they are needed the most [74]. In Kenya, for instance, the commercialization of water to bridge the financing gap is causing a shift towards market feasibility and profit generation rather than meeting the basic needs of the people [171], which in turn increases the gap in access to water and sanitation services between urban and rural areas and between the rich and the poor.…”

Framing water as a financial risk: Reviewing the processes shaping a narrative

“…This is crucial, as scholars who contribute to the “linguistic turn” suggest that any new idea presented will be interpreted and assessed against existing belief systems, and any idea that resonates with existing normative frameworks has a greater chance of gaining traction (Falkner, 2012). Nature is, as noted by Williams (2021, p. 1878), becoming enrolled in “circuits of capital accumulation.” Overall, nature is increasingly described, treated, and governed as a financial asset. Redefining, and by extension increasingly speaking about, nature as a financial asset matters.…”

“…Examining the structure of utility governance over several decades in Medellín, Colombia, Furlong (2020) shows that financialization of utility services in this area led to prolonged debt-management, severely impacting the inhabitants as the indebtedness of utilities is transferred to users. Noting that most scholars focus on the effects of financialization and its impact on space and people, Williams (2021Williams ( , p. 1878 suggests that more work is needed to unpack what he refers to as the preconditions of financialization: "the re-alignment of sectors, driven largely by service providers, development professionals and state actors rather than investors, in order to encourage financialized forms of development." Exploring the financialization of Kenya's water sector, Williams shows that it does not happen spontaneously, but requires structured efforts, creating the enabling conditions for these processes to occur.…”

Blended finance, transparent data, and the complications of waters' multiple ontologies

“…Blended finance utilizes donor/philanthrocapitalist grants in order to de-risk repayable financing, such as microfinance, output-based aid, or raising equity. Blended finance forms part of the financialization of water in the Global North (Ahlers and Merme, 2016;Bayliss, 2014) and has started to enter water supply in the Global South as well (Williams, 2021).…”

“…In the face of the dire economic situation in Mathare, not only illegal vendors but also the official CBO sold water at a much higher price, ranging between KES 2 and KES 10 per jerrycan. As part of the "arduous and contingent" (Williams, 2021) process of creating the preconditions for the financialization of water in urban Kenya, the NCWSC turned towards revenue generation from informal areas (Drabble et al, 2018), which has been paired with the implementation of ICTs (Guma, 2019). The NCWSC tried to force out illegal vendors through competition by replacing the official CBOs with PAYGo dispensers and offering the presumably "same" water at the very cheap price of KES 0.5 per jerrycan.…”