Water Economics and Adequate Water Supply

This paper examines the role of water pricing with regard to water supply and demand of industrial, institutional and residential water infrastructure facilities in Enugu urban. Persistent inadequate quantity and quality is a major challenge to health, general livelihood, and well being of the populace. A weak water pricing structure is the bane of poor water delivery service among others. The theoretical framework of the study is hinged on the economic element of sustainable development concept and the economic theory of demand and supply. Using survey design method, the paper investigated the pricing system for water from the supply-side and demand-side. Questionnaires were the main instrument for investigation. Sampling frame constituted all industrial water-use, institutional water-use and residential water-use facilities. Data were sourced through primary and secondary sources. Sample sizes for residential water use only are selected by applying the Taro Yamani statistical distribution technique. Multiple regression analysis was applied to analyze the data. Findings revealed low billing/collection efficiency and Cash Operating Ratio (COR). Percentage amount billed that is not collected is also high, ranging from 66.6% to 97.1%. Multiple Regression Model (MRM) explained high proportion of variations in the factors that affect the water pricing structure in Enugu urban. Analysis of Variance explained by each variable shows that X3 (percentage willingness to-pay water tariff), X4 (availability of water delivery services in the facilities/dwelling unit), X6 (regularity of water delivery service), and X11 (earning capacity/income/funding), are the most important contributors to water pricing structure for the three multi-sectoral water uses. The paper recommends training workshops to build capacity on efficiency in billing and collection of water tariff, availability of water supply and equity in water distribution. Moreso, introduction of meterage system is very important as a major priority for achieving economic sustainability in water supply system in Enugu urban.