There is a growing need for private sector participation (PSP) in the provision of water infrastructure to boost availability and efficiency, especially in developing economies. This study investigates users' preference for PSP in water infrastructure provision in Lagos, Nigeria.
Using a multistage sampling, the study selected 57, 172 and 296 buildings in Shomolu, Surulere and Ikeja local government areas, respectively, in Lagos. Closed-ended questionnaires were administered to one adult resident in each building. From a total of 525 questionnaires, only 450 (85.71%) were returned and analyzed using descriptive and inferential statistical techniques.
The analysis revealed that users had a higher level of awareness of PSP in water infrastructure provision, though preference for PSP was slightly lower. Three key determinants of PSP acceptance were identified: effective management/policy framework, service competitiveness/effectiveness and price increase. While users recognize the advantages of improved service delivery, the positive attitudes are offset by concerns of increased costs. Anticipated price increases and reduced affordability diminish perceived behavioural control and present compatibility challenges. Regression analysis confirms that while governance and efficiency drive acceptance, affordability is a factor limiting support. Thus, users' preferences rely not solely on efficiency, but on equitable pricing, regulatory transparency and socioeconomic factors.
Evaluating end-users’ perspectives could encourage PSP in water infrastructure provision, thereby limiting environmental hazards, guaranteeing quality control and reducing individual expenses through economies of scale.
Quality water supply infrastructure significantly influences housing quality and property values. However, empirical research on the determinants of user preferences for PSP in developing countries remains scarce.
1. Introduction
Infrastructure development strongly correlates with economic growth (Xu and Luo, 2018). However, infrastructure provision is capital intensive, and extant studies (Xu and Luo, 2018; Mofokeng et al., 2024) have noted that strained public resources and high budget deficits have widened the gap between the demand for infrastructure and the availability of funds across most developing countries.
Across developing nations, there is an increasing neglect of water supply infrastructure. Highlighting the severe challenge, data from UNICEF reports that, as of 2022, 36% of the sub-Saharan Africa population has access to potable water. Access to potable water supply across most developing countries is becoming a major challenge, as expounded by SDG GOAL 6, “clean water and sanitation for all”. Investment in water supply infrastructure, that is, what is built to pump, divert, transport, store, treat and deliver to end users, is central to economic development and significantly enhances housing quality and property values (Hsu and Shr, 2023).
There appears to be an imbalance in the water supply infrastructure in Nigeria, especially in fast-growing states like Lagos. Public water supply is constrained by financial limitations and inefficiencies (Benitez et al., 2012). Hence, users seek alternative water sources which are costly and could pose environmental danger and could be unfit for human consumption. Water infrastructure, when provided disjointedly or individually, loses the efficiency and value of its provision. Hence, there is a need for organized private sector participation (PSP) to boost availability and efficiency.
Extant studies (Ameyaw et al., 2017; Simões, 2017) have advocated for PSP in water infrastructure. PSP in water infrastructure is an investment; the expectation of investors is the ability of the investment to give suitable returns, while minimizing unforeseen risks. Therefore, investors seek to identify the inherent investment potential, especially from the perspective of the end-users. However, scarcity and demand are not adequate to evaluate value creation and sustainability, but users' desire and effective purchasing power. Thus, value is driven by acceptability and affordability. Therefore, the investment potential in private provision of water infrastructure is beyond the supply and demand imbalance, but also in the assessment of end-users’ preferences and acceptability.
While extant studies have investigated the benefits of private infrastructure provision (Mawejje, 2024), and constraints to direct investment (Clark et al., 2012), there is a dearth of studies assessing users' preference for PSP in water infrastructure in the global south. Thus, this study investigates users' preferences for PSP in water infrastructure provision in Lagos, Nigeria. Evaluating end-users’ preferences, from the demand perspective, could encourage water infrastructure financing through PSP, enhance the achievement of the SDGs and limit individual expenses through economies of scale.
Towards this end, the research questions set for the study include:
What is the level of users' awareness of PSP in water infrastructure provision?
What is the level preference for PSP in water infrastructure provision?
What factors influence users' preference for PSP in the provision of water infrastructure?
How do the emergent underlying dimensions of PSP in water infrastructure predict users' overall preference?
2. Literature review
2.1 Infrastructure financing
Traditional infrastructure funding through taxes, the municipal bond market and loans are increasingly inadequate. Given the increasing pressure on public funds, widening infrastructural gap and paucity of finance, governments are beginning to adopt more innovative financing options. Innovative finance includes a range of non-traditional mechanisms such as public-private partnerships (PPP), bonds green finance and market-based financial transactions. Consequently, extant studies (Zakeri et al., 2025; Li et al., 2021; Tshehla and Mukudu, 2020) acknowledge the significant role of private finance, via PPPs and Private Participation in Infrastructure (PPIs), in supplementing public funds.
2.2 Infrastructure financing in emerging markets
Despite its application across emerging markets, private infrastructure financing in Sub-Saharan Africa remains critically low, facing an estimated USD 130 billion gap between 1990 and 2013 (World Bank PPI database, 2015). Existing literature attributes infrastructure financing in these markets to four interrelated factors. These include institutional and regulatory frameworks, economic/market conditions, financing instruments and risk management approaches.
Institutional and regulatory frameworks are a major determinant for attracting PSP in infrastructure. Investors require a stable investment climate characterized by the rule of law, transparency, institutional quality and enforceable legal frameworks (Tshehla and Mukudu, 2020). Conversely, Tayeng et al. (2024) highlighted the data irregularity and political volatility are major drawbacks to investors. Regarding economic fundamentals, macroeconomic stability, market size and purchasing power have a significant influence on the availability and cost of project finance (Tshehla and Mukudu, 2020). While public funds are essential for initiating large-scale projects, private sector finance is naturally drawn to favourable economic environments, subsequently providing efficiency, expertise and innovation.
Finally, mitigating perceived risks, such as regulatory disputes and political or financial volatility, are important to securing private investment (Tayeng et al., 2024). Infrastructure, particularly in the water sector, faces distinct challenges including high capital intensity, extended payback periods, low returns and varying levels of public acceptance. This study posits that public acceptance is inextricably linked to user awareness and preference. Therefore, understanding the determinants of user preference for PSP is a crucial step in mitigating investment risk and successfully leveraging private sector efficiency.
2.3 Factors influencing users' preference for PSP in water infrastructure
As the shift towards PSP in water infrastructure increases, understanding the demand-side perspective, specifically user preference based on findings from extant studies, is important.
Public perception significantly influences users' preference for PSP in water infrastructure provision. Several factors contribute to shaping this preference, which also impact the level of acceptance and success. PSP is often expected to increase efficiency and reduce costs, empirical evidence suggests that PSP does not necessarily result in efficiency gains or cost reductions for users (Dehner, 2011). The discrepancy between expectations and reality negatively impacts public opinion. Public perception of PSP is more favourable where there are well-designed PPP contracts that ensure regulatory compliance and transparency (Dehner, 2011; Ameyaw et al., 2017). Conversely, users in low- and middle-income urban areas are wary of PSP due to profit-driven motives, reduced accountability and negative experiences in other sectors (Rakodi, 2000). Public utilities are often preferred to private utilities where previous privatization has led to price hikes or controversial outcomes (Kallis et al., 2010).
Also, equity and accessibility concerns shape user preferences. In developing countries, users fear that privatization may restrict access to affordable water in marginalized communities exacerbating inequalities (Dehner, 2011; Twum and Abubakari, 2020). Extant studies such as Rakodi (2000) noted that while users recognize the need to pay for water services, their willingness is contingent on service quality. Users also express concern about the impact of cost recovery and fear of excluding the poor. Increasing disparity adversely influences users' perceptions of PSP, especially in regions where equitable access to water is a critical issue. Chernavsky (2021) noted that users' scepticism is fuelled by perceptions of excessive profits, monopolistic tendencies and ineffective government regulation.
Public acceptance is a critical success factor for PSP. Without public acceptance, investors become hesitant due to a lack of community cooperation (Ameyaw et al., 2017; Dithebe et al., 2019). Thus, participatory decision-making and stakeholder consent are essential in fostering successful PSP in water provision (Ameyaw et al., 2017; Swamy et al., 2018). While reasonable pricing is considered, social acceptability is a more important factor (Swamy et al., 2018) and unwelcome privatization could lead to tariff resistance (Galaa and Bukari, 2014). Thus, public transparency, effective communication and engagement are necessary to foster a positive perception and cooperation (Dithebe et al., 2019).
However, users' conceptual knowledge or education is insufficient to ensure positive perception and attitudes. Wang et al. (2021), using a Taiwanese case study, noted that despite high awareness of the environmental impact of water infrastructure, users did not support additional fees for maintenance. Resistance often stems from deeply rooted socio-economic traditions where water is viewed as a basic right and a core state responsibility to ensure equitable access (Rakodi, 2000; Simões, 2017). This perception makes users sceptical of PSP. Thus, socio-economic context plays a crucial role in shaping perceptions, as private involvement is viewed with suspicion in regions with strong public sector traditions. Thus, users' preference is not driven solely by expected efficiency but by nuanced evaluation of equity, ownership, legal frameworks, political stability, equity/transparency, social context and level of community participation. Analyzing these factors will provide information for investors navigating emerging economies.
2.4 Theoretical and conceptual underpinning
The study adopts a dual theoretical lens, combining the Theory of Planned Behaviour (TPB) and Diffusion of Innovation (DOI) to address issues of awareness and the individual-level factors that influence users' preference for PSP.
The TPB (Ajzen, 1991) posits that individuals' behavioural intention, such as preference for PSP, is determined by three core constructs, including attitude, subjective norm and perceived behavioural control (PBC). In this instance, attitude refers to a favourable or unfavourable evaluation of PSP in water provision, and subjective norm evaluates the perceived social pressure from community leaders, family, or peers. PBC evaluates the perceived ease or difficulty, reflecting users' experience and anticipated obstacles.
Complementarily, DOI Theory (Rogers, 2003) explains the spread of new ideas. PSP in the water sector is a social innovation, and the DOI provides an understanding of how awareness-knowledge and perceived attributes influence the adoption rate. While the awareness-knowledge addresses users' exposure and understanding. The perceived attributes refer to relative advantage, compatibility and complexity, which influence adoption rates. While TPB has been applied to understand public acceptance of water-related policies (Mahdavi, 2021), DOI assesses the temporal and social dynamics of how initial awareness translates into preferences.
Thus, this study conceptualizes awareness as the main precursor to preference (see Figure 1). The study posits that the preference for PSP begins with the knowledge stage, which directly corresponds to users' level of awareness. Awareness is defined as the users' exposure to and understanding of the PSP model, including its existence, the nature of the private entity's role, and the general implications for service delivery. Without a foundational awareness, a meaningful preference cannot be evaluated. Assessing users' level of awareness of PSP helps in evaluating their preferences and factors influencing the preference. The conceptual framework posits that users' preference for PSP is a cumulative function of initial awareness, the evaluation of perceived attributes, subjective norms and PBC. Ultimately, a positive evaluation of these combined factors will enable a favourable attitude and high preference for PSP.
The conceptual model is arranged from top to bottom with two main sections. At the top, a single box labeled “Awareness-Knowledge” has arrows leading downward to three boxes labeled “Perceived Attributes”, “Subjective Norms”, and “Perceived Behavioural Control”. The box “Perceived Attributes” further connects downward with arrows to three subordinate boxes labeled “Relative Advantages”, “Compatibility”, and “Observability”. A dashed rectangular boundary surrounds these labels: “Perceived Attributes”, “Subjective Norms”, “Perceived Behavioural Control”, “Relative Advantages”, “Compatibility”, and “Observability”, with the label “Factors Influencing” positioned below it. From the middle of the dashed boundary, an arrow leads downward to a box labeled “Attitude and Preference for P S P”, which connects downward with an arrow to the bottom box labeled “Behavioural Intention”.Conceptual framework. Source: Authors' own work
The conceptual model is arranged from top to bottom with two main sections. At the top, a single box labeled “Awareness-Knowledge” has arrows leading downward to three boxes labeled “Perceived Attributes”, “Subjective Norms”, and “Perceived Behavioural Control”. The box “Perceived Attributes” further connects downward with arrows to three subordinate boxes labeled “Relative Advantages”, “Compatibility”, and “Observability”. A dashed rectangular boundary surrounds these labels: “Perceived Attributes”, “Subjective Norms”, “Perceived Behavioural Control”, “Relative Advantages”, “Compatibility”, and “Observability”, with the label “Factors Influencing” positioned below it. From the middle of the dashed boundary, an arrow leads downward to a box labeled “Attitude and Preference for P S P”, which connects downward with an arrow to the bottom box labeled “Behavioural Intention”.Conceptual framework. Source: Authors' own work
This study contributes to existing literature on PSP in water infrastructure and the application of behavioural theories. The study advances theoretical understanding by integrating the TPB and DOI theories. While both theories have been individually applied to various adoption contexts, their combined application to explain user preference for PSP in water infrastructure, particularly in a developing economy, is limited. Also, the study contributes empirically by providing evidence from Lagos, Nigeria, a rapidly urbanizing developing region facing critical water infrastructure challenges. While this context is often underrepresented in global literature, our findings fill a significant geographical and sectoral gap. The findings from the study are invaluable for policymakers, urban planners and private sector entities engaged in sustainable water provision strategies in similar developing contexts.
3. The study setting: Lagos, Nigeria
Lagos is characterized by high population density. Lagos is a major centre for commercial, industrial and political activities and a major port of entry and exit for Nigeria (Healy et al., 2020). However, as one of the world's fastest-growing cities (Faisal et al., 2021), the rapid pace of urbanization has led to housing problems, overcrowded slums and strain on public facilities and infrastructure.
A manifestation of this pressure is the widening water infrastructure gap. In 2018, the daily water demand of 540 million gallons exceeded the Lagos Water Corporation production capacity, creating a 320 million gallon deficit (Akinbode, 2018). Current estimates suggest that the daily demand exceeds 700 million gallons (Abiodun, 2025), while the LWC's total installed production capacity remains at 210 million gallons per day. This disparity results in a deficit of nearly 490 million gallons per day. Exacerbated by rapid urbanization, increasing demographics (Olabode and Comte, 2024), dilapidated infrastructure and low budgetary provisions (Iniobong, 2024), the scarcity in water supply highlights the state's inability to meet public needs. Thus, the infrastructural gap presents potential value for prospective institutional and private investors.
4. Research method
The study utilized primary data collected from users of water supply infrastructure in residential buildings in Lagos, Nigeria. Using the latest house numbering project by Lagos State Signage and Advertisement Agency (LASAA) done in 2012, the number of residential houses in Lagos State is put at 1,194,525. Based on the Independent National Electoral Commission, Lagos state is divided into three senatorial districts: Lagos East and Lagos Central, each comprising five (5) Local Government Areas (LGAs) and Lagos West, comprising ten (10) LGAs.
The study adopted a multi-stage sampling technique. The first stage entails purposively selecting one LGA in each of the senatorial districts. From a pilot survey, the selection was based on the LGA having the highest level of perceived water infrastructure gap and service complaints. The purposively selected LGAs include Shomolu (Lagos-East), Surulere (Lagos-Central) and Ikeja (Lagos-West).
In stage two, the study used the LASAA 2012 records to obtain the number of streets in each of the selected LGAs. The number of streets in Shomolu, Surulere and Ikeja are 55, 167 and 286, respectively, making a total of 508 streets. For data manageability, systematic sampling was used for the on-field selection of every 5th street (i.e. 20%) from the list of streets in each selected LGA. During the selection, consideration was given to the next street if the fifth street selected had no residential properties. A total of 101 representing 11, 33 and 57 streets in Shomolu, Surulere and Ikeja were selected, respectively.
The third stage entailed the selection of buildings from the selected streets in each LGA. Based on the LASAA records, there are 572, 1,716 and 2,964 buildings in the selected streets of Shomolu, Surulere and Ikeja, respectively. A systematic sampling of every 10th building (10%) was adopted to select the buildings from the selected streets in each LGA. Consideration was given to the next building if the tenth building selected is not a residential building. The study selected 57, 172 and 296 buildings in the Shomolu, Surulere and Ikeja LGAs, respectively. Consequently, 525 residential users were sampled for the study. One adult resident per selected building was surveyed. The survey instrument underwent content validation by three senior academics prior to administration to ensure clarity and internal consistency. The feedback was incorporated to refine and finalize the instrument. The survey achieved a response rate of 85.71% (450 out of 525 questionnaires). Evidence from studies such as Groves (2006) suggests that a response rate above 80% is considered excellent and significantly reduces non-response bias.
The study collected data about users' socio-economic characteristics using categorical data. The users' level of awareness, preference for PSP, and factors influencing users' preference were measured using 5-point Likert scales. While the users' socio-economic characteristics were analyzed using frequency and percentages, users' level of awareness and preference were analyzed using mean and standard deviation and a one-sample t-test. Regarding the factors influencing users' preference, this was analyzed using mean and standard deviation, one-sample t-test (statistical significance set at p < 0.05), and factor analysis. For the purpose of inferential analysis, the Likert-type items were treated as interval data. The items for each component, as extracted from the PCA, were aggregated to form composite scores used in the regression analysis. This approach is supported by the literature (Norman, 2010; Sullivan and Artino, 2013), which suggests that parametric tests such as the t-test and linear regression are robust to the ordinal nature of Likert scales, particularly when using large sample sizes. The use of parametric techniques in this study allows for a more nuanced interpretation of the mean differences and the predictive power of the identified components. This is also consistent with practices in other infrastructure research, such as (Dithebe et al. (2019) and Li et al. (2021). The reliability of the components was analyzed using Cronbach's alpha. The Cronbach alpha values obtained were above 0.900, and this was considered adequate (DeVellis and Thorpe, 2021). The extent to which the latent dimensions (independent variables) identified through factor analysis influence users' preference (dependent variable) for PSP were further tested using multiple regression analysis.
In interpreting the mean results, a benchmark mean value of 3.0 (mean value of 5-point) was adopted. Consequently, the mean score range becomes
x > 4.50 – Very-High-Importance (VH-I)
4.49 < x > 3.50 – Medium-High-Importance (MH-I)
3.49 < x > 3.00 – High–Importance (H-I)
x < 3.00 – Low–Importance (L-I)
5. Results and discussion of findings
5.1 Users' socio-economic characteristics
The socio-economic characteristics of the respondents (Table 1) show that most respondents (45.1%) were between the ages of 41 and 50 years, suggesting that most respondents were within the highly active age bracket and would readily expect the convenience of efficient water supply systems. Regarding users' educational status, 87.6% were educated up to the tertiary level. Thus, the users are expected to have knowledge about the role of PSP in water provision. The household size shows that the majority (50.2%) were 4–6 in sizes. The users' response to the type of accommodation shows that 95.6% occupied one to three-bedroom apartments. The property ownership status indicated that 80.7% were tenants. It is expected that tenants' satisfaction could significantly hinge on access to the water supply. Also, 444 (98.7%) users were employed, while 6 (1.3%) users were retired. The monthly income shows that 52.2% earn in the range of ₦50,000 to ₦150,000.
Respondents socio-economic characteristics
| Demographic variable | Local government areas | Total | Percentage | |||
|---|---|---|---|---|---|---|
| Shomolu | Surulere | Ikeja | ||||
| Age | 30 years and below | 4 | 1 | 27 | 32 | 7.1 |
| 31–40 | 26 | 14 | 92 | 132 | 29.3 | |
| 41–50 | 14 | 84 | 105 | 203 | 45.1 | |
| 51–60 | 9 | 48 | 18 | 75 | 6.7 | |
| Above 60 | 2 | 1 | 5 | 8 | 1.8 | |
| Total | 55 | 148 | 247 | 450 | 100.0 | |
| Educational Status | Secondary Education | 7 | 49 | 0 | 56 | 12.4 |
| Tertiary Education | 48 | 99 | 247 | 394 | 87.6 | |
| Total | 55 | 148 | 247 | 450 | 100.0 | |
| Household Size | 1 to 3 | 4 | 84 | 36 | 124 | 27.6 |
| 4 to 6 | 48 | 59 | 119 | 226 | 50.2 | |
| 7 to 9 | 3 | 5 | 44 | 52 | 11.6 | |
| No response | 0 | 0 | 48 | 48 | 10.6 | |
| Total | 55 | 148 | 247 | 450 | 100.0 | |
| Type of Accommodation | 1 Bedroom | 1 | 124 | 31 | 156 | 34.7 |
| 2 Bedrooms | 14 | 14 | 85 | 113 | 25.1 | |
| 3 Bedrooms | 35 | 7 | 119 | 161 | 35.8 | |
| 4 Bedrooms | 1 | 3 | 12 | 16 | 3.5 | |
| 5 Bedrooms and Above | 4 | 0 | 0 | 4 | 0.9 | |
| Total | 55 | 148 | 247 | 450 | 100.0 | |
| Property ownership status | Owner | 11 | 42 | 34 | 87 | 19.3 |
| Tenant | 44 | 106 | 213 | 363 | 80.7 | |
| Total | 55 | 148 | 247 | 450 | 100.0 | |
| Employment Status | Employed | 55 | 147 | 242 | 444 | 98.7 |
| Retired | 0 | 1 | 5 | 6 | 1.3 | |
| Total | 55 | 148 | 247 | 450 | 100.0 | |
| Monthly Income (in NGN)* | Below 50,000 | 1 | 45 | 6 | 52 | 11.6 |
| ₦50,000 – below ₦150,000 | 9 | 56 | 170 | 235 | 52.2 | |
| ₦150,000 – below ₦500,000 | 32 | 47 | 71 | 150 | 33.3 | |
| ₦500,000 – below ₦2,000,000 | 11 | 0 | 0 | 11 | 2.5 | |
| ₦2,000,000 and above | 2 | 0 | 0 | 2 | 0.4 | |
| Total | 55 | 148 | 247 | 450 | 100.0 | |
Note(s): * 1 USD = NGN 1,650 as at November 2024
5.2 Users' awareness and preference for PSP in water infrastructure provision
The analysis indicates a medium-high (M-H) level of users' awareness and preference for PSP across the three locations. Awareness is highest in Shomolu (mean = 4.25), Ikeja (mean = 3.82) and lowest in Surulere (mean = 3.67), with an overall average of 3.82. Similarly, preference scores show an overall mean of 3.65, with Ikeja (mean = 4.01) demonstrating the highest preference, Shomolu (mean = 3.78) and the least preference in Surulere (mean = 3.01). The overall mean values exceed the 3.0 benchmark, suggesting a generally favourable disposition toward PSP in water infrastructure provision within the locations. This outcome is, however, expected, because the TPB and DOI, as described in the conceptual framework suggests that users' preference for PSP is a cumulative function of initial awareness. The lower rating of the preference for PSP could be informed by users' reluctance to pay for water, because of its perception as a “social good”.
5.3 Factors influencing preference for PSP in water infrastructure provision
Descriptive Analysis
The factors influencing users' preference for PSP in water infrastructure provision were examined (Table 2). The results of the mean rating showed that attitude towards PSP was largely positive, driven by behavioural beliefs regarding the benefits. Findings reveal that factors such as “Transparency in charges” (mean = 4.22), “Better quality of service to consumers” (mean = 4.19) and “Improved quality of product supply” (mean = 4.16), “Technical/Operational competence” (mean = 4.13) and “Improved service reliability and continuity” (mean = 4.13) had high mean scores. This underscores users' belief that PSP could offer tangible improvements over existing public water provision. However, in terms of compatibility of PSP with existing values and needs, the results present a nuanced picture. While the desire for improved water services aligns well with user needs, the potential for increased prices poses a challenge to compatibility. Factors such as “increase in prices of services”, “services may be less accessible to the poor” and “services may be less affordable to low-income earners”, had lower mean scores of 3.51, 3.26 and 3.23, respectively. This indicates a conflict between the perceived benefits of PSP and users' economic realities, suggesting that while the innovation is compatible with the need for better service, it may be incompatible with their financial capacity. This also impacts users' PBC, as users' perceived ability to manage the financial implications of PSP directly influences their overall preference.
Factors influencing users' preference for PSP in water infrastructure provision
| Factors | Mean | Std. Deviation | Interpretation | Test value = 3.0 | |||
|---|---|---|---|---|---|---|---|
| t | df | p-value | Mean difference | ||||
| Transparency in charges | 4.22 | 0.982 | M-H | 26.075 | 436 | 0.000 | 1.22 |
| Better quality of service to consumers | 4.19 | 1.072 | M-H | 23.580 | 449 | 0.000 | 1.19 |
| Improved quality of product supply | 4.16 | 1.095 | M-H | 22.470 | 449 | 0.000 | 1.16 |
| Safety and security of service supply | 4.13 | 1.053 | M-H | 22.828 | 449 | 0.000 | 1.13 |
| Technical/Operational competence | 4.13 | 1.080 | M-H | 22.255 | 449 | 0.000 | 1.13 |
| Improved service reliability and continuity | 4.13 | 1.080 | M-H | 22.227 | 449 | 0.000 | 1.13 |
| Productivity and efficiency in service delivery | 4.07 | 1.075 | M-H | 20.755 | 433 | 0.000 | 1.07 |
| Increased accessibility to infrastructure services | 4.07 | 1.059 | M-H | 21.452 | 449 | 0.000 | 1.07 |
| Increased investment in infrastructure services | 4.06 | 1.053 | M-H | 21.390 | 449 | 0.000 | 1.06 |
| Managerial expertise | 4.03 | 1.139 | M-H | 19.245 | 449 | 0.000 | 1.03 |
| Availability of a standard regulatory framework | 4.00 | 1.029 | M-H | 20.670 | 449 | 0.000 | 1.00 |
| Reduced the need for resources on backup facilities | 4.00 | 1.127 | M-H | 18.827 | 449 | 0.000 | 1.00 |
| Sustainable pricing policies | 4.00 | 1.071 | M-H | 19.521 | 436 | 0.000 | 1.00 |
| Reduction in wasteful cost | 4.00 | 1.048 | M-H | 19.919 | 435 | 0.000 | 1.00 |
| Increased availability of resources for investing in expansion | 4.00 | 1.057 | M-H | 19.973 | 449 | 0.000 | 1.00 |
| Improved financial discipline | 3.99 | 1.050 | M-H | 19.980 | 449 | 0.000 | 0.99 |
| Expansion of service delivery | 3.96 | 1.028 | M-H | 19.522 | 433 | 0.000 | 0.96 |
| Reduction of leakages and wastages | 3.95 | 1.152 | M-H | 17.164 | 433 | 0.000 | 0.95 |
| Improvement in the financial performance of the infrastructure | 3.90 | 1.105 | M-H | 17.274 | 449 | 0.000 | 0.90 |
| Attempt by PSP to cut expenditure on safety and security of supply for an increased profit margin | 3.89 | 1.071 | M-H | 17.103 | 420 | 0.000 | 0.89 |
| Reduction in prices of infrastructure services | 3.86 | 1.009 | M-H | 18.182 | 449 | 0.000 | 0.86 |
| Efficient personnel management | 3.86 | 1.114 | M-H | 16.339 | 449 | 0.000 | 0.86 |
| Improved self-sustainability of infrastructure services | 3.83 | 1.029 | M-H | 17.138 | 449 | 0.000 | 0.83 |
| Increase in employment | 3.82 | 1.061 | M-H | 16.489 | 449 | 0.000 | 0.82 |
| Adequate allocation and management of associated risk in the investment | 3.81 | 1.103 | M-H | 15.515 | 449 | 0.000 | 0.81 |
| Improvement in the enforcement of environmental protection laws | 3.80 | 1.075 | M-H | 15.876 | 449 | 0.000 | 0.80 |
| Availability of resources for investing in expansion | 3.78 | 1.053 | M-H | 15.509 | 435 | 0.000 | 0.78 |
| Reduced financial losses | 3.78 | 1.072 | M-H | 14.915 | 420 | 0.000 | 0.78 |
| Opportunity to improve the Nation's fiscal policy | 3.72 | 1.283 | M-H | 11.784 | 436 | 0.000 | 0.72 |
| Effective revenue collection of user fees | 3.70 | 1.029 | M-H | 14.518 | 449 | 0.000 | 0.70 |
| Opportunity for government to raise revenue for much-needed social programs | 3.67 | 1.128 | M-H | 12.575 | 449 | 0.000 | 0.67 |
| Inclusion of environmental norms in private participation arrangement | 3.62 | 1.085 | M-H | 11.956 | 435 | 0.000 | 0.62 |
| Increase in wages and salaries | 3.62 | 1.127 | M-H | 11.454 | 433 | 0.000 | 0.62 |
| Private participation may warrant laying off staff | 3.59 | 1.046 | M-H | 11.947 | 449 | 0.000 | 0.59 |
| Increase in prices of services | 3.51 | 1.375 | M-H | 7.751 | 433 | 0.000 | 0.51 |
| Possibilities of private participation leading to corruption | 3.47 | 1.064 | H | 9.115 | 433 | 0.000 | 0.47 |
| Reduced financial constraints on the government | 3.37 | 1.101 | H | 7.104 | 449 | 0.000 | 0.37 |
| Service may be less accessible to the poor | 3.26 | 1.108 | H | 4.937 | 433 | 0.000 | 0.26 |
| Service may be less affordable to low-income earners | 3.23 | 0.962 | H | 4.988 | 433 | 0.000 | 0.23 |
| Reduction in revenue to the government | 3.15 | 1.202 | H | 2.631 | 435 | 0.009 | 0.15 |
| Reduction in employment | 3.14 | 1.158 | H | 2.529 | 433 | 0.012 | 0.14 |
| Private participation may allow for competition | 3.08 | 1.237 | H | 1.317 | 435 | 0.189 | 0.08 |
| Overall | 3.81 | 0.9155 | M-H | 18.733 | 449 | 0.000 | 0.81 |
The higher mean scores of factors such as “Reduction of leakages and wastages” (mean = 3.95) and “Improvement in the financial performance of the infrastructure” (mean = 3.90) are highly observable outcomes that could significantly accelerate the diffusion of PSP. Observed improvements in service delivery would serve as motivators, encouraging broader acceptance and adoption by users. Regarding subjective norms, mean rating shows that “Availability of standard regulatory framework” (mean = 4.00) suggests that users' preferences are shaped by the expectation of institutional oversight and normative rules of engagement. Furthermore, “Inclusion of environmental norms in private participation arrangement” (mean = 3.62) and “Improvement in the enforcement of environmental protection laws” (mean = 3.80) suggests a social and institutional pressure to align water provision with broader societal standards of environmental responsibility. All the variables were statistically significant and had positive mean differences (mean values > 3.00 benchmark).
Principal Component Analysis
To identify the principal components within the larger variables, the study employed the factor analysis. To ascertain the suitability of the data, the Kaiser-Meyer-Olkin (KMO) and Bartlett's test of sphericity were conducted. The results revealed a KMO value of 0.564. While this value is below 0.70, it exceeds the minimum threshold of 0.50 required to proceed with factor analysis (Field, 2005). Furthermore, the Bartlett's test was highly significant (χ2 = 16,781.075, p < 0.001), indicating that the variables are sufficiently correlated to provide a stable factor structure. Also, given the large sample size (N = 450) and the exploratory nature of the study, these parameters confirm that the dataset is appropriate for factor extraction.
From the PCA output (Table 3), the first three components have eigenvalues greater than one and these components constitute a total of 91.635% of the cumulative variance. The result of the rotated loadings showed that component one captured the bulk of the variation, having 57.939% variance, component two has 27.994% variance and component three captures 5.703% variance. Although the third component, named “Price Increase,” emerged as a single-item factor, it was retained. Statistically, the factor met the Kaiser Criterion with an eigenvalue of 1.622, and the item exhibited a high factor loading of 0.735, confirming a strong relationship with the latent construct. The 0.735 factor loading aligns with the submission of Wanous and Hudy (2001) on the decision criteria for single factor loading. Also, the item was retained as it measures a distinct, unidimensional concept that is not strongly correlated with the other variables in the analysis. Furthermore, the retention of this factor aligns with extant literature, which emphasizes that factors related to the prices of services are critical considerations for users when evaluating PSP in service delivery.
Rotated component matrix
| Variables | Components | ||
|---|---|---|---|
| 1 | 2 | 3 | |
| 1. Effective Management/Policy Framework (Cronbach Alpha = 0.994) | |||
| Availability of standard regulatory framework | 0.934 | ||
| Expansion of service delivery | 0.930 | ||
| Productivity and efficiency in service delivery | 0.903 | ||
| Improved financial discipline | 0.902 | ||
| Improved self-sustainability of infrastructure services | 0.899 | ||
| Increased investment in infrastructure services | 0.895 | ||
| Increased accessibility to infrastructure Services | 0.892 | ||
| Technical/operational competence | 0.889 | ||
| Efficient personnel management | 0.889 | ||
| Managerial expertise | 0.885 | ||
| Inclusion of environmental norms in private participation arrangements | 0.884 | ||
| Improvement in the enforcement of environmental protection laws | 0.882 | ||
| Opportunity to improve the Nation's fiscal policy | 0.881 | ||
| Reduction of leakages and wastages | 0.879 | ||
| Improved service reliability and continuity | 0.876 | ||
| Sustainable pricing policies | 0.876 | ||
| Attempt by PSP to cut expenditure on safety and security of supply for increased profit margin | 0.874 | ||
| Safety and security of service supply | 0.870 | ||
| Increased availability of resources for investing in expansion | 0.867 | ||
| Opportunity for government to raise revenue for much-needed social programs | 0.863 | ||
| Availability of Resources for Investing in Expansion | 0.862 | ||
| Better quality of service to consumers | 0.858 | ||
| Improvement in the financial performance of the infrastructure | 0.854 | ||
| Reduced need for resources on back up Facilities | 0.844 | ||
| Adequate allocation and management of associated risk in the investment | 0.843 | ||
| Reduction in wasteful cost | 0.831 | ||
| Improved quality of product supply | 0.825 | ||
| Transparency in charges | 0.720 | ||
| Reduced financial losses | 0.700 | ||
| Increase in employment | 0.680 | ||
| Reduction in prices of infrastructure Services | 0.651 | ||
| Reduced financial constraints on the government | 0.630 | ||
| 2. Service Competitiveness and Effectiveness (Cronbach Alpha = 0.968) | |||
| Reduction in revenue to the government | 0.964 | ||
| Private participation may warrant laying off staff | 0.948 | ||
| Increase in wages and salaries | 0.889 | ||
| Private participation may allow for competition | 0.874 | ||
| Services may be less accessible to the poor | 0.845 | ||
| Services may be less affordable to low-income earners | 0.841 | ||
| Possibilities of private participation leading to corruption | 0.817 | ||
| Effective revenue collection of user fees | 0.758 | ||
| Reduction in employment | 0.732 | ||
| 3. Price Increase | |||
| Increase in prices of services | 0.735 | ||
| Rotation Sum of Squared Loadings | |||
| Total | 24.334 | 11.758 | 2.395 |
| % of Variance | 57.939 | 27.994 | 5.703 |
| Cumulative % | 57.939 | 85.933 | 91.635 |
| Initial Eigen Value | |||
| Total | 32.759 | 4.106 | 1.622 |
| % of Variance | 77.998 | 9.777 | 3.861 |
| Cumulative % | 77.998 | 87.774 | 91.635 |
Note(s): Extraction Method: Principal Component Analysis
Component One (Effective Management/Policy Framework): Users' positive attitude, as highlighted in the mean score, is further reinforced by the factor analysis, where “Effective Management/Policy Framework” (Component 1) emerged as the most significant factor. This component encapsulates several positive attributes associated with private sector efficiency, collectively influencing users' favourable disposition towards PSP.
Water infrastructure projects inherently lack trialability; users cannot experiment with PSP before full adoption. This absence of a trial phase influences the importance of effective management and regulatory frameworks. These reflect users' need for assurances and guarantees in the absence of direct trialability. Thus, the items loaded onto Component 1 indicate that the preference for PSP is not merely a personal choice but is embedded in a normative framework of effective policy and legal compliance. Effective management and policy frameworks are crucial in influencing public perception of PSP in water infrastructure provision (Aigbavboa et al., 2023). This finding corroborates the submissions of Mause (2019), which underscored the importance of policy/governance issues on private infrastructure provision. This often significantly affects public perception, especially if the project fails to meet expectations. Effective management and policy frameworks that ensure transparency, accountability and performance can positively influence public perception of private infrastructure provision (Sutherland et al., 2011; Mause, 2019). Policy/regulatory independence can reduce inefficiencies and improve users' perception of private investments. However, policy/regulatory bottlenecks can lead to inefficient pricing and negatively impact users' perception (Schram and Ule, 2024). Across most emerging economies, issues relating to governance and effective management remain critical areas to address to ensure PSP acceptance.
Component Two (Service Competitiveness and Effectiveness): The second component, “Service Competitiveness and Effectiveness” primarily influences users' attitude. Items such as “Private participation may allow for competition” (0.874) and “Effective revenue collection of user fees” (0.758) contribute to a positive attitude. Users may perceive that competition fosters innovation and efficiency, leading to better service quality, thereby forming favourable behavioural beliefs about PSP. Efficient revenue collection might also be viewed positively as a sign of improved financial management and sustainability, further enhancing a positive attitude. Conversely, items within this component significantly challenge a positive attitude and directly impact PBC. Concerns like “Services may be less accessible to the poor” (0.845) and “Services may be less affordable to low-income earners” (0.841) represent significant control beliefs. If users perceive that PSP will erect barriers to access or affordability, it negatively impacts their intention to support PSP.
From a DOI perspective, the component directly relates to the attributes of relative advantage and compatibility. Users might see the positive aspects as superior ways of organizing water services, promising greater efficiency and responsiveness. This perceived advantage is crucial for the initial adoption and continued diffusion of the innovation. However, the negative aspects of this component highlight challenges to compatibility. The concerns about services becoming less accessible or affordable to vulnerable populations directly conflict with existing social values and expectations regarding equitable access to essential services. For PSP to diffuse widely, it must be perceived as consistent with the values, past experiences and needs of potential adopters. When an innovation is seen as incompatible with these elements, its rate of adoption is significantly hindered.
Thus, while PSP can enhance service competitiveness and effectiveness, this is, however, dependent on effective government regulations to mitigate agency problems and opportunistic behaviours of private investors (Koo et al., 2013). In addition, prioritizing financial gains over quality can lead to a lack of effectiveness and compromise of quality (Reynaers, 2019). Competition generally leads to efficiency. Users may perceive PSP more favourably in competitive markets due to the potential for improved services and efficiency. However, the complexity of PSP arrangements could erode the benefits of competitive market pressures (Cruz and Sarmento, 2022).
Component Three (Price Increase): The only variable loaded under this component is the increased prices of services. Price increase impacts PBC and influences users' attitude towards PSP. An increase in water price implies a reduced ability to afford the service. For households with limited disposable income, a price hike translates into a lack of resources to comply with the PSP model. When users perceive that they lack the necessary financial resources, their preference for PSP significantly diminishes. Furthermore, price increases form a negative behavioural belief, contributing to an unfavourable attitude towards PSP. While users may justify price increases if they lead to service improvements (Matas et al., 2018), the negative utility of higher costs can outweigh the benefits, leading to a net negative evaluation of PSP, thereby reducing the intention to support PSP.
Also, a price increase directly impacts the compatibility and relative advantage of PSP. For an economically constrained population, price increases make PSP incompatible with their financial realities and expectations. This incompatibility will deter adoption, as PSP is seen as misaligned with their needs and resources. If the financial burden outweighs the service improvements, the net relative advantage becomes negative, making PSP adoption less attractive. However, if regulatory and policy frameworks can ensure that fair pricing remains aligned with users' interest, users are more likely to view PSP favourably (Schram and Ule, 2024).
Linear Regression Analysis
The results of the multiple regression (Table 4) show that the multiple correlation coefficient, R value, has a value of 0.809. This indicates a very strong positive correlation, suggesting that the three factors, effective management/policy framework, service competitiveness/effectiveness and price increase, are highly effective in predicting the observed variation in users' preference for PSP. The coefficient of determination, R2 value, is 0.654. This shows that 65.4% of the total variance in the dependent variable, i.e. Users' Preference for PSP, is accounted for by the three independent variables included in the regression model. The R2 value is considered substantial, confirming that the conceptual framework adequately captures a significant portion of the determinants of user preference for PSP in water infrastructure provision. The minimal difference between the R2 (0.654) and the Adjusted R2 (0.651) suggests that the three components contribute meaningfully to the prediction of the dependent variable without overfitting the data.
Regression analysis outputs
| Model summary | ||||
|---|---|---|---|---|
| Model | R | R2 | Adjusted R2 | Std. Error of the estimate |
| 1 | 0.809 | 0.654 | 0.651 | 0.596 |
| ANOVA of preference for PSP in water infrastructure provision | ||||||
|---|---|---|---|---|---|---|
| Model | Sum of squares | Df | Mean square | F | Sig | |
| 1 | Regression | 268.978 | 3 | 89.659 | 251.996 | 0.000 |
| Residual | 142.319 | 400 | 0.356 | |||
| Total | 411.297 | 403 | ||||
| Coefficients of the equation predicting users' preference for PSP | ||||||
|---|---|---|---|---|---|---|
| Model | Unstandardized coefficients | Standardized coefficients | ||||
| B | Std. Error | Beta | t | Sig | ||
| 1 | (Constant) | 0.656 | 0.124 | 5.296 | 0.000 | |
| Effective Management/Policy Framework (C1) | 0.651 | 0.032 | 0.660 | 20.411 | 0.000 | |
| Service Competitiveness/Effectiveness (C2) | 0.322 | 0.029 | 0.399 | 11.044 | 0.000 | |
| Price Increase (C3) | −0.160 | 0.026 | −0.221 | −6.252 | 0.000 | |
The ANOVA section (Table 4) shows that the independent variables statistically significantly predicted the dependent variable, where the p < 0.005; in other words, the regression model is a good fit of the data.
The general form of the equation to predict preference for PSP in water infrastructure provision from any one variable in component one (C1) – “effective management/policy framework”; component two (C2) – ‘service competitiveness/effectiveness and component three (C3) – “price increase”, is obtained from the coefficients table. The un-standardized coefficients show how much the dependent variable varies with an independent variable, given that other independent variables are held constant. Table 4 also shows the statistical significance of the independent variables. The p-value indicates that all the independent variable coefficients are statistically significant.
Thus, the general form of the equation to predict preference for PSP in water infrastructure provision from the coefficient Table 4 is:
The unstandardized coefficient B for C1 is 0.651, for C2 it is 0.322 and for C3 it is −0.160. This implies that for every one increase in component C1, preference will increase by 0.651; for every one increase in C2, preference will increase by 0.322; and for every one increase in C3, preference will decrease by 0.160.
The results reveal that Component One, an effective management/policy framework, is a positive predictor of users' preference (beta = 0.651). This component directly links to the TPB construct of PBC. This suggests that users' preference for PSP is not solely driven by the mere promise of better service, but by assurance of accountability and effective governance (Dehner, 2011; Ameyaw et al., 2017). High PBC, based on a belief in a robust and transparent management and policy structure, is an important factor in fostering a positive attitude (preference) among users. The other two components represent the user's cost-benefit analysis, aligning with the TPB's behavioural beliefs and the DOI's relative advantage attribute. Component Two, service competitiveness and effectiveness (beta = 0.322) capture the perceived positive outcomes of PSP, such as better quality of service and efficiency. This positive coefficient confirms that the anticipated benefits of service improvement are an important driver of preference. Conversely, Component Three, price increase (beta = −0.160) with a negative coefficient, highlights the critical trade-off users make. While users value the improvements in service, the associated cost increase acts as a detractor, reducing the level of preference (Swamy et al., 2018). This finding underscores that the perceived relative advantage of PSP is based on the benefits outweighing the financial cost. Summarily, while effective management/policy framework had a greater positive influence on users' preferences than service competitiveness/effectiveness, an increase in prices decreases users' preferences.
6. Conclusion
The study investigated the users' preference for PSP in water infrastructure provision. The analysis revealed a high level of users' awareness of PSP in water infrastructure provision. However, users' preference for PSP in water infrastructure is a complex interplay of perceived benefits, social influences and economic considerations. The application of the TPB reveals that a predominantly positive attitude towards PSP, driven by expectations of enhanced service quality and efficient management, is an important determinant. Also, subjective norms, manifested as the expectation for standard regulatory frameworks and environmental compliance, play a significant role in legitimizing PSP within the social system. However, this positive disposition is influenced by concerns related to PBC, particularly the affordability of services in the face of potential price increases. From a DOI perspective, PSP is viewed as an innovation with considerable relative advantage, though its compatibility is challenged by socio-economic constraints. The inherent lack of trialability necessitates robust regulatory frameworks and transparent practices to foster trust and facilitate the diffusion process. Thus, there is a need to strengthen the regulatory body and governance mechanisms. This involves ensuring the regulatory framework is transparent, independent and capable of enforcing performance standards, protecting consumer interests and holding the private investors accountable. Policy efforts should concentrate on establishing clear performance metrics, accessible complaint mechanisms and public reporting on compliance, thereby increasing the user's PBC and building the necessary trust for a positive preference toward PSP.
6.1 Limitations
The study focused on users' perception of PSP. Further studies could triangulate responses from service providers, using objective water quality assessments to provide more nuanced information. Also, further research could operationalize the core constructs of the TPB and DOI and assess the direct influence of these constructs on users' preference for PSP in water infrastructure. Research could further explore providing qualitative insights, such as interviews, to understand the underlying reasons behind users' support or scepticism for PSP. Further studies could also extend to peri-urban and rural LGAs to capture the full spectrum of water supply challenges across the urban-rural continuum.
