This paper is a study on financial sustainability of water supply service to the city of Offa, in Kwara State, Nigeria. The value consumers place on water supply and the willingness-to-pay (WTP) for improved service and the factors that influence their preferences were determined using an econometric model. The WTP was estimated using a double-bounded dichotomous model and the mean WTP was found to be 70% higher than the current tariff, while the expected monthly revenue from domestic customers alone was 21 million ($175,000)1. The study revealed that the consumers were not satisfied with the level of service but they were willing to pay for improved service and even support reforms that will bring about this change. The mean WTP in practical terms gives social benefit of a policy for the offered service for the affected population. The study outcome shows that the high WTP is a good incentive for private sector involvement in the management of urban water supply.

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