Evaluating Externally Funded Water Supply Projects in Nigeria

Abstract

Hitherto, most policy issues in connection with water supply were usually without any detailed financial and economic feasibility studies. This has been so because of the popularly held misconception that water is a social commodity, which should be provided free of charge by government. With the now common resort to external loans to fund water project, the issue of project evaluation has become a precondition by foreign creditors such as the World Bank and the African Development Bank. This paper examines the necessity for evaluating externally funded water supply projects in Nigeria using the National Water Rehabilitation Project (NWRP) in some States as a case study. It examines some popular methods used in evaluating projects, noting that these methods are not suitable for water projects because SWAs in Nigeria have no investment options than in water supply for now. The paper suggests the adoption of the "priority index" approach.