Willingness to Pay to Improve Domestic Water Supply in Rural Areas of Central Tanzania: Implications for Policy

This analysis estimates willingness to pay to improve community-based rural water utilities in the Dodoma and Singida Regions of Central Tanzania using Multinomial Logit functions. An estimate of willingness to pay provides an indication of the demand for improved services and potential for them being sustainable. Surveys were conducted in a total of 30 villages in the two regions. In the Dodoma Region about 14% of respondents indicated that they were satisfied with the status quo, 64% suggested increasing water discharge and watering points, and 22% proposed other improvements relating to water quality. In the Singida Region, 31% of the respondents were satisfied with the status quo, 59% wanted deeper boreholes and watering points, and 10% indicated other types of improvement relating to water quality. The Multinomial Logit functions indicated that the interaction between the water quality variable and proposed bids were important in making choices with reference to the type of improvement desired. Respondents who wanted to increase water supply in Dodoma Region were willing to pay 32 Tsh above the existing tariff of 20 Tsh/bucket. In the Singida Region, the analogous amount was 91 Tsh per household per year above the existing user fee of 508 Tsh per household per year. If the tariff or user fees have to be increased, the estimated average potential revenue for the surveyed villages was 252 million Tsh/year ($265,263) in the Dodoma Region, and 5.2 million Tsh/year ($5,474) in the Singida Region. In the future, strategic planning is needed to ensure that improvements proposed potentially improve cost recovery initiatives and increase the level of consumer satisfaction. Also, care will be needed to ensure that more disadvantaged community members do not suffer unduly from increases in tariff or user fees.