Evaluating Users’ Willingness to Pay for Private Sector Participation in Water Infrastructure Provision: Evidence from Lagos, Nigeria

The importance of water infrastructure to housing quality, enhanced property values and economic development cannot be overemphasized This study examined the investment potential inherent in private sector participation (PSP) in water infrastructure by evaluating users' willingness to pay for the private provision of water infrastructure in Lagos, Nigeria. The study collected primary data using a closed-ended questionnaire. With a focus on three local government areas in Lagos, 296, 172, and 57 buildings were selected in Ikeja, Surulere, and Shomolu respectively through multistage sampling. Selecting one adult resident in each building, 525 questionnaires were administered, and 450 (85.71%) questionnaires were retrieved and analyzed. Descriptive and inferential statistical techniques were used for data analysis. The results of the gap analysis between the users’ satisfaction and accessibility showed a negative mean difference, revealing a low level of satisfaction with the existing water supply options. The users’ willingness to pay for the benefits of private water provision showed that better quality of service to consumers (3.84), transparency in charges (3.78), improved service reliability and continuity (3.77), and increase in employment (3.74) were more highly rated than other benefits, suggesting a preference to pay for benefits directly related to the users. Only about 50% of the users are willing to pay a premium of not more than N5 per gallon of water. While an understanding of users’ willingness to pay for PSP in water supply could help achieve targets such as the Sustainable Development Goals, it could also be used to develop hedonic pricing models to identify how access to water facilities contribute to property value.