Despite water being a basic human need, the residents of Sibi in Ghana’s Nkwanta North District struggle to obtain potable water, which negatively influences their livelihoods. This study aimed to evaluate the impacts on households’ livelihoods due to difficulties in accessing potable water and accordingly give policy recommendations. Data were collected through questionnaire surveys, interviews, geographic information systems (GIS), and remote sensing (RS) techniques. Questionnaire surveys were administered to 314 randomly selected household heads. The results indicated that the water sources available in Sibi were not sufficient; the boreholes and public tabs/standpipes in the communities were not dependable for regular access. As a result, households needed to depend on distant streams and dams for water. The households generally spent more than two hours at the water sources to collect water. Evidently, the Sibi residents did not have sufficient access to potable water, which severely affected their livelihoods. It is recommended that government agencies collaborate with related non-governmental organizations (NGOs) to help expand potable water projects in Sibi, Ghana.