This paper posits that lack of maintenance, planning and bad governance including corruption led to the failure of the Nigerian public water supply system. A reconnaissance literature survey showed that virtually every city has decayed public taps and infrastructure causing most rural dwellers to trek long distances to obtain water for use with spurious quality. These are inspite of grants and interventions from international donors and credit agencies including the World Bank. Against this backdrop, an investigation was caused to examine the correspondence between financial allocation to the sector and every swelling population. Using analysis of variance for a test population of 20 states from the 36 states in Nigeria with data from National Bureau of Statistics and National Planning Commission, results showed that linearity of statutory allocation was positive with the population density of states with R2 values at < 10%. Also, financial allocations to water supply over the period (1994 – 1996) were unstable occasioned by political and economic instability in the country. Further, the study observed that the epileptic water supply gave to private participation to provide portable drinking water which was hitherto alien to developing economies. The paper recommends that state governments should adopt a responsive model that will adjust allocations to water projects
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