The influence of water pricing on financial sustainability among water service providers in Kenya
Keywords:
financial sustainability, public utility pricing theory, water pricing, water service providersAbstract
Lack of financial sustainability among water service providers (WSPs) has been a key concern of the
water sector across the globe partly because water is a key enabler in the attainment of the sustainable
development goals (SDGs). The aim of this study was to establish the influence of water pricing on
financial sustainability among WSPs in Kenya. The study adopted the pragmatism research philosophy
and explanatory sequential mixed design. The target population constituted seven senior managers
from each of the 88 registered small to very large WSPs.The sample constituted four managers per
WSP as custodians of information relating to financial sustainability and also being responsible for the
specific inputs into water pricing. A structured questionnaire was used to collect the quantitative data
from the respondents while qualitative data was collected through interviews with the industry experts.
Data was analysed descriptively by use of mean and standard deviation and inferentially by way of
regression analysis using ordinary least squares (OLS). The findings of the study indicate that water
pricing does not have a statistically significant influence on financial sustainability of WSPs in Kenya
(F=1.113 (1,250df), P=0. 296; R=0.134, R2 =0.018, β= 0.122). Based on the findings, there is need for
to confirm the sufficiency of the current pricing methodology in addressing its four primary objectives
namely: equitable access, efficiency, simplicity and full cost recovery and review the same in order to
cushion WSPs from input cost variations while at the same time ensuring its adaptability to other
external shocks
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