Below average rainfall that occurred over wide-spread areas in the RSA during the second half of the seventies caused critically low water levels in certain storage dams. The Department of Water Affairs has therefore been compelled (since March 1983) to introduce water restrictions in various areas. The direct financial consequences of the water restrictions on several sectors and areas were determined during an initial study. In order to determine the total financial consequences of the water restrictions on all sectors within the Vaal River water supply area, the input-output technique was applied dur;.ng a further study. With this technique, which takes into account the interdependency between sectors, the impact of water restrictions on the total region was determined. The regional input-output model is discussed in the paper. The composition of the total impact per sector and for the area as a whole is also analysed, and the value of water for the various sectors during water shortage situations is indicated. This information can be used inter alia to divide water optimally among sectors and consumers during shortage situations.