Effect of Legal Actions against People Who do not Pay Their Water Bills on NWSC's Performance
Abstract
This study examined the impact of legal actions against customers who fail to pay water bills on the performance of the National Water and Sewerage Corporation (NWSC) in Uganda. Using a mixed-methods approach that included both qualitative and quantitative data, the research assessed the relationship between legal enforcement measures and revenue collection. The findings indicated that a significant percentage of customers (76%) do not understand the water bill payment regulatory law, contributing to revenue loss. Although 62.4% of customers believe that NWSC strictly applies the regulations to enforce payment, over 62.5% admitted that the corporation rarely takes clients to court for non-payment. Grounded in deterrence theory, the study posits that legal penalties can effectively deter non-compliance, enhancing financial sustainability. It highlights the importance of a strong legal framework to ensure timely payments, particularly in the context of increasing urbanization that strains resources. Recommendations include implementing comprehensive awareness programs about billing regulations and strengthening legal processes for debt recovery. The insights from this research aim to improve financial performance and ensure sustainable water service delivery in Uganda
Downloads
References
Abdullah, M. (2014). Position theory and its implications for water service providers. Journal of Water Management, 12(3), 45-58.
Baker, J. (2012). The cost-recovery paradigm in water service provision: A political economy perspective. Water Resources Management, 26(7), 1895- 1908. https://doi.org/10.1007/s11269-012-0015-3
Becker, G. S. (1968). Crime and punishment: An economic approach. The Journal of Political Economy, 76(2), 169- 217. https://doi.org/10.1086/259394
Bhiman, A. (2018). Agency theory and its application in water management. International Journal of Water Governance, 6(1), 23-34. https://doi.org/10.7564/18-IJWG1
Creswell, J. W., & Plano Clark, V. L. (2018). Designing and conducting mixed methods research (3rd ed.). SAGE Publications.
Deloof, M. (2013). Does working capital management affect profitability? Journal of Business Finance & Accounting, 40(1-2), 1-27. https://doi.org/10.1111/jbfa.12001
Hayashi, K., Kato, H., & Takahashi, Y. (2006). The Theory of Reasoned Action and its Application to Water Payment Behavior. Environmental Economics and Policy Studies, 8(2), 123-140. https://doi.org/10.1007/s10018-006-0005-4
Iganga National Water and Sewerage Corporation (NWSC). (2023). Iganga Municipality water consumer statistics report. National Water and Sewerage Corporation.
Ikechukwu, O., & Nwakaego, C. (2015). Legal actions and the performance of water companies in Nigeria. Nigerian Journal of Water Resources, 10(2), 67-78.
Jochimsen, B. (2017). The brain disease theory and its implications for public service delivery. Public Administration Review, 77(4), 567-578. https://doi.org/10.1111/puar.12645
Kibombo, M., & Kasamba, J. (2022). The impact of urbanization on water supply systems in Uganda: Challenges and opportunities. Water Resources Management, 36(8), 2525-2537. https://doi.org/10.1007/s11269-022-02901-0
Lazaridis, I., & Tryfonidis, D. (2006). The relationship between working capital management and profitability: Evidence from the Greek manufacturing sector. Journal of Financial Management and Analysis, 19(1), 26-35.
Lorden, J. (2010). The assessment theory and its relevance to value recovery in water services. Journal of Economic Theory, 15(3), 301-315.
Mbula, M., Memba, H., & Njeru, A. (2016). The impact of accounts receivable on the financial performance of Kenyan firms. International Journal of Business and Management, 11(6), 45-56. https://doi.org/10.5539/ijbm.v11n6p45
Morgan, (1970). Determining sample size for research activities. Educational and Psychological Measurement, 30, 607-610.
Mubashir, M. (2012). Management strategies for accounts payable and receivable in the textile sector of Pakistan. Pakistan Journal of Commerce and Social Sciences, 6(1), 1-15.
Mugabi, H. (2010). Factors influencing bills receivable management and performance in water service providers: A case study of NWSC in Iganga Municipality
National Water and Sewerage Corporation (NWSC). (2023). Annual report 2023: Financial performance and operational efficiency. NWSC.
Raheman, A., & Nasr, M. (2007). Working capital management and profitability: Case of Pakistani firms. International Review of Business Research Papers, 3(1), 279-300.
Samiloglu, F., & Demirgunes, K. (2018). The impact of non-regulatory bill recovery processes on profitability: Evidence from the Istanbul Stock Exchange. Journal of Business Economics and Management, 19(4), 689-703. https://doi.org/10.3846/16111699.2018.1492171
Thomas, A. (2013). The effect of internal finance management regulations on the profitability of Ghanaian listed manufacturing firms. Journal of Finance and Accounting, 1(2), 45-56. https://doi.org/10.11648/j.jfa.20130102.11
Venkataramana, K., Kumar, S., & Reddy, P. (2013). Receivables management and its impact on profitability and working capital of national electricity companies in India. International Journal of Business and Management, 8(12), 1-10. https://doi.org/10.5539/ijbm.v8n12p1
World Bank. (2020). Uganda: Water supply and sanitation in Uganda: Challenges and opportunities. World Bank Publications. https://doi.org/10.1596/978-1-4648-1553-8
