Placed 29th among a total of 36 countries, Botswana is doing poorly in Africa’s Electricity Regulatory Index (ERI) for Africa 2020. The regulator, the Botswana Energy Regulatory Agency is not doing too well itself, getting a low score among a group of regulators that have been operational for less than five years or have recently been restructured.
The 36 participating countries were ranked into four performance bands, reflecting how developed their electricity regulatory frameworks are and to what extent they align with international best practice. A score range of 0.800 to 1.000 indicated a high level of regulatory development; 0.600 to 0.799 indicated a substantial level of regulatory development; 0.500 to 0.599 indicated a medium level of regulatory development; and 0.000 to 0.499 indicated a low level of regulatory development. For the most part, Botswana was shown to have a low level of regulatory development.
The ERI is made up of three pillars: the Regulatory Governance Index (RGI), which assesses the level of development of the legal and institutional set up of the regulatory framework of a country; the Regulatory Substance Index (RSI), which assesses how the regulator has operationalized the mandate bestowed on it by the RGI in developing and implementing key regulatory instruments and frameworks for the sector; and the Regulatory Outcome Index (ROI), which assesses the outcomes of regulatory decisions, actions and processes on the sector from the perspective of regulated entities. With a score of 0.681, Botswana’s RGI is substantially developed but it does poorly in terms of RSI (0.305) and ROI (0.228), bringing its ERI down to 0.336.
One of the key findings of ERI 2020 is that generally across the 36 countries surveyed, political authorities had significant influence on regulatory authorities.
“In 90 percent of the countries surveyed, the executive holds the power to appoint board members and heads of regulatory institutions, and this has the potential to subject the regulator to subtle and direct political pressure to skew key regulatory decisions towards the political inclination of the government in power,” it says.
This is indeed what happens in Botswana: the Minister of Mineral Resources, Green Technology and Energy Security appoints BERA board members. As in almost all instances where the minister discharges such responsibility, some have expressed grave concern that people appointed to the board are affiliated to the ruling party. The minister also appoints the Chief Executive Officer – which is the exact opposite of what happens in eight countries in the survey sample: Namibia, Sierra Leone, Uganda, Zambia, Liberia, Malawi, Mali and Mauritius. In those countries, it is the board that appoints the chief executive.
The ERI assesses adequacy of regulatory capacity (in terms of level of skills and number at the senior staff level) in key functional areas of regulatory practice. Generally, there is inadequate regulatory capacity for most regulatory institutions, especially the nascent regulators in areas such as financial analysis, economic analysis, engineering analysis, econometric modelling, financial modelling, tariff modelling, technical performance analysis, quality of service performance analysis and in 2020, expertise for legal issues in regulation. BERA is among nascent regulators and has been found to have a low level of regulatory development for both RSI and ROI.
