That we have been warned of a higher cost of living in the next few months is already old news. What is new though is that the Botswana Power Corporation (BPC) is planning to embark on what it calls ‘Mass Disconnection of electricity services”. The exercise will see the power corporation cutting-off the national grid its customers whose accounts are in arrears. From a commercial perspective this could make business sense. From a Motswana’s corner this is surely a final nail in the coffin. Given the subsequent electricity tariffs hike over the past three years, few households can stomach any further ‘spending’ – apart from their monthly electricity purchases, on BPC related bills. This is the general feeling across the country.
The rate at which energy prices have been rising globally, and the same being equal locally, households’ bills are wiping out monthly incomes of many families in Botswana. There are other ways the government can intervene and it does not come anywhere close to disconnecting electricity supply. Many people in this country lost their incomes while being asked to stay home to stop the spread of the deadly Covid 19. As if that was not enough, the cost of living has skyrocketed at a pace not seen in more than 10 years, draining our spending power, leaving many more without the means to pay for food or monthly household bills including outstanding electricity bills.
With our pandemic-worn economy, it is highly likely that inflation won’t let up soon. Lower-earning Batswana — and minorities — are certainly going to be affected by the problem. The decision to force them to pay for outstanding BPC bills by threatening to cut their supply can only work against their efforts to trim back spending. The decision will also work against any effort of closing the gap between those who are well-off and those at the lower part of the economic ladder. There are countless figures to showcase the rise in poverty associated with increasing inflation more especially the kind that is fuelled by prices of basic needs such as energy and housing prices – all coupled with stagnating wages. Thanks to the all-time low wages in country, Batswana are not just seeing the effects of inflation, they are also feeling it in their pockets.
Elsewhere countries are cutting burden on their citizens. These progressive countries are ensuring that policies that distort or inflate their economies are off the table. We should also strive that such policies, including cutting our people off the national electricity grid in the foreseeable future is off the table. In the meantime, SOEs like BPC need to keep the cost-of-living front of their mind. In the face of this cost of living crisis, the State and by extension SOEs need not to be powerless. At domestic level the state need to ensure that it is taking every opportunity to ease the burden on Batswana’s income. This is mainly because while the broader economy seems to be going gangbusters with a projected 4 percent growth, the micro-economy is beating a path to household pain. Almost all the economists that we have spoken to in recent times has made it clear that the biggest threat to Batswana’s livelihoods will come from the massive hike in administered prices. This is a sentiment also shared by the central bank at each and every Monetary Policy brief it has held in the last 12 months or so. Amongst the administered prices that went up, and that will likely go up soon is that of electricity tariffs.
Year in, year out Batswana face this hikes because their power utility company is fighting for survival. For many years now they company has been in a battle to rescue itself while at the same time ensuring that it secures the country’s energy needs. Years of maladministration, mostly highlighted by what by now should be the country’s biggest power plant – Morupule B is part of the reason we find ourselves where we are as a nation. The real scandal, of course, is the woeful inability of the then cabinet to select a credible and competent company to build a power station of what was to be Morupule B. As a result of that failure, BPC then terribly mismanaged the energy supply expansion through the now ill-fated Morupule B; a multi-billion pula investment that has somewhat failed its good intensions. This should explain, to anyone who cares to know why, the corporation finds itself in a position in which it wants to cut poor households off the national grid in the middle of an economic crisis. But of course, no one can downplay the implications that were brought by the Government’s decision to reduce, if not cut its subvention to BPC and other SOEs/Parastatals.
The Morupule B project failure and the stoppage of government subsidy are the two reasons why BPC seeks to put in use a Setswana saying that goes like, “Molato ga o bole”. In other words, the BPC does not care if at this very moment Batswana are hard pressed or not. Its survival appears to be top of its agenda. Unfortunately, life in Botswana is only getting worse. Batswana are trying to make ends meet but the sobering fact is that Russia’s invasion of Ukraine in the past few weeks has placed further pressure on the locals despite the geographical distance between us and those European nations. Thanks to the Russian-Ukraine war, the talk of the town is that soon we shall get another fuel prices hike, which means another big dent on the disposable incomes of Batswana. This should tell BPC that the chances of ‘forcing’ some of its customers to get it back to its knees are getting slimmer each passing day.
The BPC should have worked on its campaigns and demanded payments of the arrears some years back when the economy and the people of this country were still in a better fiscal position, not now when the main worry is the price of bread. While there can never be the right time to hike tariffs or to demand one’s dues, the #Bottomline is that the BPC has chosen the wrong time to go after its defaulting customers. The corporation should consider postponing the planned massive cuts given the economic circumstances of the majority of its patrons, being poor Batswana.
