African Water Development Report 2006 - United Nations Economic ...

African Water Development Report 2006value of water, the travel cost approach isused. Value is inferred from the value thatusers place on a recreational experiencefrom their travel behaviour. It is assumedthat the average cost that the person incursto visit a waterfall, a lake, or a river is theminimum amount that the person is willingto pay for the recreational and the aestheticvalue of water.Direct Methods of Water Valuation:Some African ExamplesAside from the indirect approaches mentionedabove, the direct approach of asking peoplehow much they are willing to pay for a resource(known as the contingent valuation method(CVM)) is also used to estimate the value ofwater. This method can be used to estimate thevalue of water used for agriculture, municipalities,industries, or even for recreation and aestheticpurposes. Questionnaires and surveys areconducted to elicit rank or value. In the contingentvaluation method, people are directly askedto state or reveal what they are willing to pay (oraccept as compensation) for good quality water,assured supply of water for irrigation, and otheruses. The reliability of the CVM method dependson the design of the questionnaire. Despite theshortcomings of the CVM method, includingproblems of designing, implementing and interpretingquestionnaires, the results of the variousapplications within the continent and otherdeveloping countries suggest that it is possibleto do a contingent valuation survey among thepoor, illiterate population and obtain reasonableand consistent answers – a way of integrating thevalues of the poor and marginalized in the decision-makingprocess (Ampomah, 2004).The World Bank’s programme on the economicvaluation of water supply has adopted two approaches:dichotomous and contingent valuation.The dichotomous choice makes it possibleto observe how people choose between alternativemeans of water supply evolving over time(Borgoyary M., 2002).KenyaThere have been several other applications ofCVM to water resource management issues indeveloping countries. In Ukundu, Kenya, villagerscan choose between water from vendors whovisit the home, water from kiosks in the villages,and water from the well. In terms of collectiontime, relative to use of the well, house deliverysaves the most time and collecting from kiosks,the least amount of time. In terms of expenditure,household vending costs the most, kiosk watersecond and well water is the cheapest. The Ukundustudy shows that users of vendors and kioskswere revealing high willingness to pay (WTP)for time saving, to the tune of about eight percent of their income.GhanaA contingent valuation study of household demandfor improved sanitation in Kumasi, Ghanain 1993 estimated that on average householdswithout water connection were willing to pay$US 1.52 for a water connection and $US 2.57per month for both a water connection and a toilet.Households with private water connectionsbut without a toilet were willing to pay seven percent more for a toilet than for the Kumasi ventilatedimproved pit latrine (KVIP). Householdsusing public latrines were willing to pay about37 per cent more for a KVIP than householdswith bucket latrines. In another study (1989), thewater quality of Barbados and Uruguay was estimatedusing the contingent valuation method.It is clear from the above discussions that wateras a scarce resource has been undervalued andoverexploited, especially in developing countries.Practical implementation of the Dublin Statementimplies proper valuation of water so as toreflect the actual value of this scarce resourceand thus guide policies that are favourable to thesector’s development.282