Business landscape and growth determinants of micro- and small enterprises working in WASH sector: evidence from Ethiopia

Abstract

This study aims at assessing business landscape and growth determinants of micro- and small enterprises working in WASH sector. The study also investigates the effect of determinant factors on enterprise growth. The study population comprised 6000 enterprises working in six cities. The study used varieties of data collection instruments including questionnaire administered with randomly selected enterprises and collected valid data from a total of 300 enterprises; conducted 24 Key informant interviews with different officials in the Cities who are concerned with WASH products and services including private WASH goods and service suppliers; conducted 12 FGDs with utility officers; community representatives; enterprise owners to triangulate the data come up with the questionnaire result. The WASH business landscape in Ethiopia faced several challenges that hinder its ability to create demand for WASH products and services among enterprises. These challenges include inadequate and ineffective demand creation efforts, low capacity of private commercial operators, limited financial services available to both the private sector and households, inadequate business support services at the local level, and inadequate workspace for WASH enterprises. However, there are also several drivers of WASH sector development in the city, such as increased government commitment to supporting access to WASH services through policies and budget support, support from development partners like the World Bank, and an increase in the city’s population. The structural equation modeling result revealed that finance resources, administrative skills, marketing competence, and technical support were found to be significant. However, infrastructure facility was found insignificant. The study recommended that the government and stakeholders come together to support enterprises and play their roles in the growth of enterprises in Ethiopia.