Is volumetric pricing for drinking water an effective revenue strategy in rural Mali?

The paper addresses how different user payment modalities—volumetric (pay-as-you-fetch) versus monthly flat fees—affect water use, revenue generation, and cost recovery for rural handpumps in Mali. The context is a persistent challenge in rural Africa where 25–30% of waterpoints are non-functional at any time, leaving significant capital underused. Despite decades of community-based management, operational performance and financial sustainability remain weak. Professional service delivery models show promise but typically require subsidies. With user payments being a major WASH financing source, there is debate over pricing strategies that balance affordability and cost recovery. In Mali, policy recognizes both flat fee and volumetric modalities, but their effectiveness for handpumps is unclear. The study leverages a large-scale professional service rollout (UDUMA) in Sikasso Region to empirically compare these modalities and their implications for SDG 6.1 under seasonal climatic variability.

The literature identifies user payments as the largest WASH financing source and highlights tensions among equity, efficiency, and cost recovery in tariff design. Volumetric pricing is common in urban piped systems to encourage efficient use and improve financial sustainability and is spreading in rural Africa with kiosks, small piped systems, ATMs, and digital payments. However, for rural handpumps, empirical evidence on volumetric pricing’s effectiveness is limited. Prior studies report poor sustainability under community-based models and improved performance with professionalized maintenance, though subsidies remain necessary. Seasonal and climatic drivers (temperature and rainfall) significantly influence demand in both urban and rural settings. Evidence from Kenya and other countries suggests volumetric pricing can suppress consumption among lower-income users, and payment behaviors vary with local context (alternative sources, social dynamics, community practices). Policy guidance often relies on limited data, underscoring the need for performance-based monitoring and data-informed tariff and subsidy design.

Setting and provider: The study focuses on Sikasso Region, southern Mali, with a dry season (Mar–Jun) and wet season (Jul–Oct). UDUMA, a professional service provider operating under contracts with local governments, manages 177 handpumps (Vergnet-Hydro and India Mark II), each metered and uniquely identified, guaranteeing high uptime (breakdowns <72 h). Payment modalities: Initially (Nov 2019), a volumetric tariff of 500 FCFA/m³ (~$0.80) was charged via pay-as-you-fetch at the pump. Between Apr 2021 and Mar 2022, UDUMA gradually switched waterpoints to a monthly flat fee paid upfront by a community representative. Data: Monthly meter readings and payment records were collected Nov 2019–Apr 2023 across 177 waterpoints in 23 municipalities, producing an unbalanced panel of 4447 records; after cleaning (capping daily use at 11 m³; 34 observations removed), the final dataset comprised 4413 records: 1885 volumetric and 2528 flat-fee observations. At least two monthly records per modality exist for each waterpoint. Outcomes: (1) Daily volumetric use (m³/day per waterpoint), computed as monthly volume divided by days in month; (2) Average monthly revenue per waterpoint (US$), computed as total monthly revenue divided by active waterpoints; (3) Working ratio (% of recurring local O&M costs—estimated at $24/month per waterpoint—covered by local revenue, including OpEx and direct support but excluding CapEx, capex maintenance, cost of capital, and overheads); (4) Collection efficiency (%), defined as paid/billed volume for volumetric, and as whether the flat fee was paid in a month for flat-fee months. Main predictor: Payment modality (binary: 0=volumetric, 1=flat fee), with a waterpoint-specific cut-over at the first recorded flat-fee payment (staggered adoption). Controls: Monthly municipality-level climate variables—total rainfall (TAMSAT TARCAT) and average temperature (Copernicus ERA5-Land). Statistical analysis: Waterpoint fixed-effects panel regressions estimate within-unit changes associated with the modality switch, controlling for rainfall and temperature. Robust standard errors are clustered at the waterpoint level to address within-unit autocorrelation. Models were implemented in R (v4.0.3). Ethical approval: University of Oxford Central University Research Ethics Committee (SOGE 1A2020-195; SOGE 1A2021-046). Data availability: All data and supplementary information are provided with the article (csv file Flatfee-Data).

- Water use: Average daily water use per waterpoint more than doubled under flat fees (mean 1.74 m³, SD 2.26) versus volumetric (mean 0.84 m³, SD 1.48). Fixed-effects regression associates flat fees with +0.908 m³/day (≈+900 L/day) per waterpoint, controlling for climate. A 1 °C increase in monthly average temperature is associated with +0.180 m³/day (+180 L/day) per waterpoint. Strong seasonality: higher demand in the hot/dry season (Mar–Jun), lower in the rainy season (Jul–Oct). - Collection efficiency: Flat fees show higher collection efficiency (mean 54%, SD 50%) than volumetric (mean 29%, SD 37%). Regression indicates flat fees increase collection efficiency by about 24 percentage points (Table 1, Model 8). Spatial variation exists across municipalities; flat fees are not uniformly superior in every locality. Collection efficiency under flat fees exhibits a downward trend from July 2022. - Revenue: Flat fees generate higher average monthly revenue per waterpoint: $12.85 (SD $11.97) versus $3.42 (SD $9.78) under volumetric. Fixed-effects regression associates flat fees with +$9.37/month per waterpoint, controlling for seasonality; each +1 °C corresponds to +$0.82/month. Month-by-month, volumetric revenues track seasonal water demand with occasional peaks (max $163 at one waterpoint, May 2021), but remain lower than flat-fee revenues on average. - Cost recovery (working ratio): Mean working ratio improves under flat fees (53.5%, SD 49.8%) vs volumetric (14%, SD 41%). Regression shows a +39 percentage-point increase in working ratio with flat fees, driven by higher monthly revenues. - Subsidy needs: Estimated average subsidy requirements decline from >$20/month per waterpoint (volumetric) to <$12/month (flat fee), a short-term reduction of about 40% post-transition. - Scale effects: Despite a ~50% reduction in the number of actively paying waterpoints after mid-2022, total monthly revenue under flat fees matched volumetric revenues during the best volumetric months (Apr–May 2021).

The study’s findings address whether volumetric pricing is an effective revenue strategy for rural handpumps in Mali. The evidence suggests flat fees outperform volumetric tariffs for generating revenue, improving cost recovery, and supporting higher water consumption, particularly during periods of high demand. Seasonal and climatic factors significantly shape water use, with temperature increases driving higher daily abstraction. These results imply that flat fees may be more acceptable and enforceable for handpumps where users expend time and effort to fetch water, whereas volumetric tariffs risk suppressing consumption—especially among lower-income users—and underperform on collection efficiency. The improved working ratio under flat fees narrows but does not eliminate the subsidy gap, underscoring the need for targeted, data-informed subsidies aligned with local demand and climatic patterns. Professional service providers play a critical role by ensuring reliability, providing performance data, and adapting business models (e.g., switching modalities) under government oversight. Such models can help build climate resilience by assuring dry-season supply and informing spatial prioritization of investments, though sustaining collection efficiency over time remains a challenge. Overall, tariff designs effective in urban piped systems may not translate to rural handpumps; context-specific strategies that couple professionalized operations with appropriate subsidies are essential.

Flat fee contributions, compared to volumetric pricing, substantially increase daily water use, collection efficiency, monthly revenue, and cost recovery for rural handpumps in Mali, while reducing required operating subsidies by roughly 40% in the study period. Nonetheless, subsidies remain necessary to guarantee reliable, safe water access, especially in high-demand seasons. Performance data from professional service providers enable evidence-based tariff and subsidy design, climate-resilient planning, and targeted infrastructure investment. Policy implications include linking infrastructure finance with clear service delivery arrangements and adapting tariff modalities to local contexts. Future research should: (1) assess household-level affordability and welfare impacts of payment modalities; (2) examine long-run trends in use, payment compliance, and sustainability; (3) test generalizability to other technologies (small piped systems, kiosks) and regions; and (4) identify local determinants of collection efficiency to tailor modality choices.

- Observational, non-experimental design with staggered (non-random) adoption of flat fees; causal inference is limited to within-unit associations. - Study period constrained to Nov 2019–Apr 2023; long-term trends remain uncertain, including the observed decline in collection efficiency under flat fees since mid-2022. - Findings pertain to handpumps; applicability to other rural water technologies (piped systems, kiosks) is unknown. - No detailed household-level affordability analysis; potential equity impacts (e.g., under volumetric pricing) are inferred from related literature rather than directly measured. - Unbalanced panel due to phased rollout and varying waterpoint activity; potential residual confounders despite fixed effects and climate controls. - Data cleaning capped daily use at 11 m³ and removed 34 observations; meter or reporting errors may persist.