Cape Coast once a national capital of Ghana and its environs in recent years have constantly suffered perennial acute water shortage. The Brimsu dam which takes its supplies from the Kakum River with current production capacity of 1.4 × 104 m3/day cannot meet the water needs of the study area. The operating levels of the dam during crisis have reduced from 7.3 meters to 4.7 meters over the years with subsequent reduction in water production by 35%. Recently, the operating level has reduced further to about 3.5 meters with 60% reduction in water supply. This study evaluated alternative water resources to augment water supply and mitigate the impact of perennial water shortage. Among the alternatives considered are surface water from Twifo Prasso on the Pra River, groundwater supplies, and the desalination technology. Mean annual streamflow of Pra River at Twifo Prasso was used to evaluate the continuous availability and reliance on surface water. Hydrogeological assessment of geology underlying the study area vis-à-vis the existing borehole and their yields was used to evaluate groundwater potential. Desalination technology which is not currently in existence in the study area was considered based on available literature. Since the implementation of projects of this magnitude are the responsibilities of the central government through grants and loans, the study focuses on the cost implications of water from these alternatives to the final consumer in terms of affordability. In considering the cost of water from the various alternatives to per capita per day consumption in rural and urban settlements within the study area for a household of five, the cost of surface water remains the most affordable means of water supply, followed by groundwater. Borehole yields indicate that intensive exploitation of groundwater even though more expensive than surface water sources could minimize the effect of perennial water shortage and over dependence on surface water. The cost comparison analyses have shown that the cost of desalination using reverse osmosis is still expensive and could not compare favorably with the existing water supply alternatives. The analyses have thus confirmed the long held perception that "desalination is expensive and cannot be used in study area".