Water value and demand for multiple uses in the rural areas of South Africa: The case of Ga-Sekororo

The provision of free basic water for domestic uses and a more equal distribution of water for productive uses are seen as important instruments to redress inequities from the past and eradicate poverty in South Africa (SA). Although the government committed itself to providing free basic water for all, this result is still far to be reached, particularly in rural areas. Financing of multiple use water services was identified as an important ingredient to insure improved access to water for rural poor in SA and at the same time allow productive uses and broaden livelihood options. Recent evidence indicated the potential contribution that productive uses of domestic water might make to food security and poverty reduction in rural areas of SA. Following the principles of integrated water resource management (IWRM), efficient, equitable and sustainable investment in improved water services should be demand driven, that is, it should be based on a thorough understanding of effective demand by consumers for multiple use water services. The assessment of demand for improved water services provides the basis for micro level analysis of consumer benefits from multiple water uses. Such studies are not common in SA's rural areas, where most of the economic analyses focus on either domestic or irrigation water demand. This study attempts to fill this gap by assessing the household demand for multiple use water services in Sekororo-Letsoalo area in the Limpopo Province. Choice modelling is the approach used to identify the attributes determining demand for water services and quantify their respective importance. Households are presented with alternative sets of water services, corresponding to different levels of the attributes. In this study, the following attributes were used: water quantity, water quality, frequency of water supply, price of water, productive uses of water, and source of water. Choice modelling allows estimating the relative importance of these attributes for various strata of the studied population, and ultimately provides a measure of the willingness to pay for different aspects of water demand (attributes), including productive water uses. Results show that households in rural areas are willing to pay for water services improvements. Due to the poor quality of present water services in the area, users are primarily concerned with basic domestic uses and demand for non domestic water uses is low. Only households already relatively well served are interested in engaging in multiple water uses.