Thursday, June 4, 2020

Botswana’s fuel delivery routes should be diversified away from South Africa

Recent attacks in South Africa highlight the need for countries like Botswana that rely so much on South Africa for their trade and economic survival to plot an alternative course – at least in the medium term.South Africa is an ongoing political risk.Because of the history of that country, South Africa is potentially an explosive powder keg.Botswana is one of the countries that could not survive beyond a few days of SA shutdown

Every little thing consumed in Botswana comes from South Africa.And it is really in Botswana’s interest to actively look at cultivating other trade routes, especially for strategic resources like oil.The dynamics really call for Botswana to craft a vision for the future whose main objective would be to create a secure and reliable supplies.The temptation is to do nothing and hope that sanity will prevail.That in our view is insane

Getting other routes over and above SA would allow Botswana to get fuel uninterrupted even if South Africa, a politically volatile country went up in smoke as it almost did recently

South Africa is a very important regional partner for Botswana, thanks to its sophisticated and thoroughly developed economy by comparison. Officially, South Africa is the second largest economy after Nigeria.But the truth is that such an assertion hides a lot of truths.South African economy is much more dynamic than Nigeria’s and certainly much more diversified. Nigeria’s over-reliance on oil makes it much more vulnerable to global shocks.But even it is not in Botswana’s interest to allow itself to be a sitting duck even to a hegemon the size of South Africa.Botswana has to do all it takes to ensure that fuel destined to this country can always enter regardless of the political situation in South Africa

History teaches us that South Africa would only safeguard and guarantee Botswana’s interest if those interests do not collide or clash with South Africa’s.A Hyundai car assembly in Gaborone was forced to closed down because of hostile trade responses from South Africa.The plant was viewed as a threat to South Africa’s huge car manufacturing industry

Even the most powerful labour unions in South Africa viewed the Gaborone plant with suspicion and ultimately hostility.The reason why a Mmamabula power plant that had been planned on the Botswana side never took off was also a result of similar reactions from South Africa.There is a big risk that something might go wrong. And Botswana should always be prepared.South Africa has in many respects been good to Botswana; take the electricity deal between the two countries’ power utility companies for example

But in equal measure Botswana has always existed under the shadow of a big brother to the south of its border.Exclusive of South African ports and roads naturally gives that country excessive power and leverage over Botswana.But it is the volatile and unpredictable nature of internal politics of that country that should be of supreme concern.For the last few weeks the world watched in helpless horror as people were torched simply because they were black and also non-South Africans.Truck drivers were especially targeted as they were accused of stealing South African jobs.

It was impossible to understand the South African grievances.Surprisingly whites were spared.Admittedly fuel supplies in Botswana were not affected, largely because of national strategic reserves but also the reserves managed by oil companies themselves

These reserves are not limitless.Had the mayhem in South Africa continued for much longer Botswana was going to be adversely affected.For Botswana, alternatives exist in using Mozambique and of course Namibia as alternative routes.But there will be need for new investments to bring infrastructure up to speed.The problem with Mozambique is that the route does not entirely circumvent South Africa as at least two – possibly three- provinces still would be traversed.

These are important decisions that nobody among political contenders is interested in for now as a shortcut to securing votes rules supreme.

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