2005 - 2006 - Pinsent Masons Water Yearbook 2012

NIGERIA PART 2: COUNTRY ANALYSIS
(LSWC). Capital spending requirements point to US$1.2 billion being needed during the first 15 years
of a contract and US$2.5 billion over 25 years. During 2002-03, LSWC has undertaken the
construction of 10 micro-waterworks costing NGN2.2 billion (€15.9 million) in various parts of the state.
Private sector participation is being considered if there are no increases in tariffs. A water policy bill
was under development in mid 2005 to allow the private sector to operate in water provision projects
nationally. This follows on from a bill passed in December 2004 for the legal framework for the
privatisation of the water sector in Lagos.
Guinness Nigeria has awarded a €3.8 million contract to Biwater (Pty) Ltd for the design, supply,
installation, and commissioning of an effluent treatment plant at the Ogba Brewery in Lagos. Work
started in October 2003 and was completed in December 2004.
In October 2005, Delta State announced that the Delta State Urban Water Board, will be one of nine
State Owned Enterprises to be fully commercialised with the aim of introducing private sector
operators from 2006.
MAJOR CITIES
City 2000 2015 Status
Ibadan 1,549,000 2,542,000 Privatisation under consideration
Lagos 8,665,000 15,966,000 Privatisation under consideration
Ogbomosho 809,000 1,356,000 Privatisation under consideration
Case study: Kaduna State Water Board
The state of Kaduna has a population of 2.7 million with cities of Kaduna (1.5 million) and Zaria
(800,000). Currently, the Kaduna State Water Board (KSWB) is a Parastatal, under the State Ministry
of Water Resources, responsible for urban water supply. Assets have been vested in KSWB but the
Ministry of Water Resources acts as a custodian to these. In 2002, households accounted for 76% of
consumption and 21% of revenues, with a system coverage of 46% and unaccounted water at 38%.
KSWB charges US$4.6 per month for households and 50% of bills are collected. In the regional
context, the KSWB has a good record, but there remains much room for progress. The state is
experiencing 3% per annum population growth, and has a target for 100% service coverage by 2025.
Capital expenditure of US$257 million is needed - US$38 million for rehabilitation, the rest for
expansion. As a result, PSP was planned for 2002-03; the first for a state water board but little
progress has been made.
There are many challenges: low income levels, with many below the poverty line (US$1 per day),
while service levels are bad and thus the willingness to pay is low. In addition, resistance to PSP is
expected due to the threat of tariff increases and lay offs. The Government aims to use a lease
contract as a stepping stone towards concessions in the longer term.
Sources:
Adelegan O.J. & Adelegan J.A. (2001). Investment appraisal of the privatisation of water supply in Nigeria. 27 th Wedc
Conference. Wedc, Loughborough, UK.
154 Pinsent Masons Water Yearbook 2005 – 2006