Author(s)

J. A. Adelegan

Abstract

Over the years Government has made appreciable investment towards development and management of water for irrigation, drinking water and to a lesser extent recreation. For certain reasons, the demand for safe drinking water supply service continues to overwhelm the delivery. It is against this background that the study simulates the privatisation of water supply in Nigeria with a view to improve and expand the delivery and coverage of water services, increase the efficiency of operation and transfer of financial responsibility in the provision of water services to the private sector while allowing them a fair rate of return. The study sample cover ten Nigerian urban and semi-urban centers. Data for the study was largely obtained from the IBRD funded project. The Discounted Cash Flow (DCF) Principles including the Net Present Value method, the Internal Rate of Return method and the Discounted Pay back Period method constitute our major model for the study. Data analysis using computer techniques (spreadsheet applications) gave a mean net present value, NPVK of U.S $ 67224152.00, a mean internal rate of return, IRR of 28.35% and a mean discounted payback period, PBP of 4 years signiffig that the return on investment in the Nigerian water supply sector is high enough to attract a private sector participant. Our results also indicates that more of Nigerian citizenry would have access to potable water with increase in per capita per day water consumption through private sector participant.

Keywords