An enthusiastic global campaign on intervention in water in the Lower Income Countries (LICs) was launched by the UN at the International Conference on Water and the Environment (ICEW), in Rio de Janerio, in January of 1992. In June of the same year, in Dublin, a plan of action was devised and a commitment to the water related goals highlighted in Rio de Janerio was made. Close to fifteen years on, there is little to show by way of success in the intended countries. Over 1.1 billion people in the LICs lack safe water. The direct impact of this is a higher risk of waterborne diseases. The waterborne diseases claim 42,000 lives every week in the LICs. By any standards this is a serious depletion of the human capital stock. Looked at in light of the fact that these countries still heavily rely on labour in production, amplifies the need to preserve health. The inherent danger posed by the poor quality water‐ as can be drawn from the above statistics‐ seems to suggest that improving the quality of water would go a long way in improving and preserving societal health in the LICs. By implication this would improve the productivity of the workers. Other benefits include cost mitigation, improved investor confidence as well as increased tourists’ confidence‐ all of which are vital for LICs’ growth prospects. It begs the question of why these countries have not improved their water quality. With specific reference made to Uganda, this research is bent on answering this question. In Uganda, there is consensus among scientists that the ground and open water sources are degraded to dangerous levels. Water quality parameters like turbidity, coliform count, and colour are all above the WHO minimum specifications for potable water and are on the rise in the country. This is indicative of water quality deterioration and it heightens the risk of waterborne diseases to the users. The waterborne burden of disease in Uganda is on the rise with a high fatality rate of 440 lives every week. The need to improve water quality in the country has been acknowledged. However, attempts to address the problem have only been undertaken on a small scale, most notable of these being the PuR home water treatment vii program. There is evidence in the country that the water quality would have apparent benefits. Strong correlations have been found between improved health in HIV patients and improved water quality in the country. In the economics of health, improving societal health inherently improves workers’ performance and productivity, leading to higher growth of the economy. There is an economic imperative therefore, as to why countries like Uganda should improve their water quality. In spite of this, even the country’s most urbanized setting‐ Kampala‐ lacks potable water. This study therefore investigates why, in a time when not only the global agenda is more supportive than ever and when the country’s water resources have been found to be risky to use, Uganda has not improved water quality. Kampala is used as the model district for this study. The district accounts for three quarters of users of treated water in the country. The problem is investigated by assessing the efficiency case of such a project (a water quality improving project) in the country; the methodology employed to this end is the Cost Benefit Analysis (CBA). The methodology compares the costs and benefits of a project, in monetary terms, in the same analysis, over its useful life. In the application of CBA one allows for the time value of money by using the discount rate to make the costs and benefits of the project occurring in different years comparable. In principle, the methodology is simple to apply‐ only that issues arise in the quantification of benefits and the determination of the discount rate. Benefits of the Kampala water quality, improving project include non‐market values and for this reason a non‐market valuation technique, the Contingent Valuation Method (CVM), was employed in their quantification. The CVM technique estimates the benefits by measuring the individuals’ willingness to pay for the improved scenario‐ in this case the scenario was one with a water quality‐improving project. The application of the CVM across many disciplines has invited a lot of criticism over the reliability of its estimates as a measure of value. A panel assembled by the North Oceanic and Atmospheric Administration (NOAA) to investigate the reliability of the CVM resolved that as long as the CVM was well conducted, the generated results would reliably predict non‐market values. The Kampala CVM, for the benefits’ quantification, was conducted with the NOAA guidelines in mind. The final value of the project’s benefits was the WTP predicted for the viii median respondent namely Ushs 385.07/= per cubic meter of water. The discount rate was deemed to be the social opportunity cost of capital in the country, viz 12 percent, this being that rate of return foregone by investing in another sector. The project’s costs were arrived at through liaison with water engineers and consulting past data from Uganda’s Water suppliers. From this, the project’s fixed costs were predicted to be Ushs 1451/= per cubic meter of water and the operation and maintenance costs predicted to be Ushs 591.7/= per cubic meter of water. The project’s useful life was deemed to be the average life of a Ugandan, namely 52 years; this choice reflecting the belief that the benefits would last over the users’ whole life. The results of the Kampala water quality‐improving project indicate that the project would not be feasible. It did not matter what discount rate one employed, the project’s operating and maintenance (OM) costs exceed the benefits. The results offer an indication as to why water quality has not been improved in Uganda‐ because the paying population is unwilling to pay for the entire cost of the project. This deduction is not to suggest that the users do not recognize the benefits of the project. The unpleasant truth is that the users’ incomes are typically stretched so thin by other demands that a decision to make more deductions from these incomes is not an inviting one. However, there is a need to improve water quality in LICs like Uganda, as can be deduced from the analysis of the risks of not doing so and benefits of doing so. Accordingly, such projects have to be funded by mechanism that does not require the users to cover the whole cost, but only part of such a cost, with the remainder from other sources like NGOs and foreign aid.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:9007 |
| Date | January 2007 |
| Creators | Wasswa, Francis |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Business and Economic Sciences |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, MCom |
| Format | xiv, 170 leaves, pdf |
| Rights | Nelson Mandela Metropolitan University |
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