Willingness to pay for water in South African rural areas: a case of Nsikas Village of Mpumalanga Province

Abstract

The scope and focus of this study was narrowed to the rural households in Mpumalanga Province - Nsikazi villages. Therefore the study was titled: The willingness to pay for water in South African Rural areas: A case study of Nsikazi Villages of Mpumalanga Province. The principal objectives of the study are as follows: determining the level of the relationship between the households' willingness to pay and the household's socio-economic and water sources characteristics; determining the amount of money that rural households are willing to pay for an improved water service, and the level of service that they would prefer to use, and lastly, determining the payment system that households prefer in their rural areas. This study was limited only to those households, staying in those villages in which the RDP water service was already put in place by the government. A Contingent valuation questionnaire was used to collect data from households and the questionnaire comprised three parts, namely, water sources; household willingness to pay for three levels of water services, and questions about the socio-economic and demographic characteristics of the respondents. A Contingent valuation method was used in order to determine whether the households were willing to pay for the running costs of an improved water system.

Based on the willingness to pay estimates, households in Mpumalanga rural areas were willing to pay R6.1 million towards the cost of providing a yard tap water service. The revenue maximizing tariff per household in Mpumalanga Province for yard tap water was found to be R12.50 per household per month. An important finding of the analysis in this villages was that the overwhelming majority of households preferred a yard tap as they view it as a convenient water service option, and almost all the respondents expressed dissatisfaction with the street taps water supply system.