Willingness-to-Pay for Potable Water in the Accra-Tema Metropolitan Area of Ghana

Abstract

A major problem confronting the Accra-Tema Metropolitan area of Ghana is the provision of potable water supply. One reason for this occurrence is the inability of Ghana Water Company Limited to meet the growing demand. This can partly be attributable to the ineffective pricing by the PURC which is below cost recovery levels. In this study we investigate household's willingness-to-pay (WTP) for potable water supply together with the factors that determine WTP by using the Contingent Valuation Method (CVM). The results indicate that households in the Accra-Tema metropolis are willing to pay on the average GH 0.10 cents for a bucket (17.5 litres) of water which is about 7 times more than what they are paying currently. Analysis of the factors that influence households WTP indicates that income, time spent to fetch water from existing sources, level of education, sanitation facility, perceived quality of current water supply, sex of the respondent and marital status are the main factors influencing households WTP for potable water supply services in the metropolis. We recommend that government improve water supply and increase tariffs since people are prepared to pay more for potable water supply as well as reduce inefficiencies that exist in the sector.