Even if much of the earth is covered by mater, the world population was suffered by water scarcity. Its severity also increased from time to time. This problem is affect the present generation to meet their needs and wants and compromises the next generation to sustain economic development and political stability. The study was carried out in Debre tabor town in south Gondar zone of Amhara region, Ethiopia, to assess water scarcity and its impact on daily activity and economic development of the local communities. For this study two Kebele (Kebele 01&02) were selected. The total household of the two Kebele have 14902 households. From these total populations 99 were selected as respondents by using simple random sampling technique. Primary data were used and collected through interview and questioners and secondary data also collected from published and unpublished material like book, article, senior essay and web site. The information's which were obtained from different source were analyzed through table, graph and charts with some interpretation. Based on the result of the study, the main cause of water scarcity is limited number of reservoir and catchment, topography, high population growth, limited capital, and unskilled man power. Finally based on the result of the data the following recommendations were made; people should use family planning, and participate in water facility construction and rehabilitation. Whereas the government should create awareness for the communities regarding with water scarcity, cause consequence, proper utilization of water, must allocate more fund for water resource development, and should distribute water fairly.
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