WILLINGNESS TO PAY (WTP) FOR WATER IN URBAN GHANA: THE CASE OF TAMALE METROPOLIS

Abstract

In recent times, there have been calls for private sector participation in water delivery in Ghana. Such calls are propelled by the notion that public utilities are not being managed efficiently and are in most cases either grossly under-priced or heavily subsidised. Proponents of the private sector participation in water delivery have often cited the payment of higher prices to vendors by households outside the piped-water system as an indication of willingness to pay. But is this actually the case? Are households willing to pay for improved water supply? How much are households willing to pay? What are the factors that influence their willingness to pay? This paper contributes to the ongoing debate by assessing households' willingness to pay (WTP) for improved water supply in Tamale, one of the cities in Ghana with acute water supply problems. Contingent valuation is used to solicit WTP bids from respondents. Factors influencing WTP and the maximum amount households are willing to pay are estimated using the probit model and Box-Cox regression respectively. The study found that sex, age, income, regularity of water supply and the pressure of flow are factors that influence the probability of WTP. The paper concludes that though there is the need for "realistic pricing" of water so as to at least ensure cost recovery, government and other actors in water supply management should be mindful of the direct relationship between access to potable drinking water and the health of the population.