Over the years, Botswana business climate has been described as unconducive as foreign investors and international bodies scolded the country’s bottlenecks and advised government to consider a raft of measures in a bid to rectify the impediments.
Cost of utilities was one area that international bodies like the World Bank raised concerns about as they were likely to scare away investors.
Years later, when everyone thought the recommendations were being implemented; high electricity costs are seen as a rising cost concern to the country attracting FDI.
This is a concern, especially that there are more friendly destinations like Mozambique and Angola on top of South Africa and Namibia that traditionally gave the country competition.
The Managing Director of BP Implements, Kgosietsile Mariri, whose business uses electricity daily is worried about the rise in the cost of power and feels that other SMMEs might be forced to close shop.
Two years ago, Mariri used to pay Botswana Power Corporation (BPC) an average of P1 500 a month, but after recent hikes in tariffs, he forks out about P5 000.
“The bill has gone up. Electricity is just expensive. Small businesses that use machinery will collapse,” he said arguing that he foresees Eskom adjusting tariffs next, which means more problems for local businesses.
Last year, the Botswana Power Corporation increased electricity tariffs by 30 percent across the board and this year the tariffs are up 30 percent.
This year, the tariffs were reviewed by 30 percent for industrial users and large companies and 15 percent for domestic use. For small business customers consuming up to 500kWh, the tariff adjustment is 15 percent.
The increase will also hit hard mining companies as they use large quantities of power on a daily basis.
BCL, which operates underground mines, said in 2008 that it was paying P120 million in electricity bills to BPC every year. Debswana on average paid P150 million annually for electricity at its Jwaneng, Orapa, Letlhakane operations and Debswana house. The figures could be higher now after the new adjustments.
BOCCIM, which represents businesses in the country, said the power crisis and recently increased power tariffs by 30 percent, has been problematic for general public, trade and industry.
The organisation headed by Maria Machailo- Ellis stated that members of the business community have expressed concerns on the power cuts and load shedding which has left some businesses without back-up systems to be unoperative.
“The country is faced with power crisis in such unpleasant circumstances; the increase by 30 percent will aggravate the problems. Business expenses will go up, however, there is another side to it where some businesses appreciate that the tariff has to increase to improve the electricity supply,” the organisation said.
In a bid to have its voice heard over the power situation, it said the issue will be taken to the Sectoral Level Consultative Council Meeting chaired by the Minister of Minerals and Energy and the BOCCIM Sector Coordinator of Mineral and Energy as part of the lobbying process.
“BOCCIM also has plans to talk to BPC about this.”
The organisation has advised the businesses community to learn to conserve power, like switching off lights when not in use, switch of computers when not in use and minimise the use of air conditioning.
The businesses were told to abide by the advices given by BPC to utilise BPC Lesedi, which provides solar solutions, budget back-up system and educate themselves more about going green.
It also added that it has suggested alternative sources of energy to government and encourage our members to venture into this business sector.
One such idea is renewable energy, one of the available energy options. In Botswana, it is a matter of access, affordability and availability. It can reduce high cost of electricity in rural areas and it can contribute to the grid based energy mix to meet rapidly expanding electricity in urban areas.