Monday, June 21, 2021

Call to revise water pricing policy Water pricing policy

The Botswana Institute for Development Policy Analysis (BIDPA) has proposed that the current water pricing policy in Botswana has need of a wholesale reform to comply with the government objectives of sustainability and the pricing of water based on long run marginal cost as outlined in NDP 10.

Botswana is one of the water stressed countries in Africa due to its climate topography. In a report titled ‘Water Pricing and Policy in Botswana’ complied by Professor Roman Grynberg and Kedibonye Sekakela, it is argued that there is need to impose a price for ground water for large abstracters like mining companies that reflects its opportunity costs.

“There is need to revise the Water Act of 1968 to remove the provisions, which provide mining companies with the right to abstract from their mining lease. The act affords mining companies unlimited mining abstraction rights over water in the mining area,” stated the report.

The report revealed that currently there exist individual prices for mining companies which are negotiated and many of these are well below the rates paid by domestic consumers.

Water supplied to mining companies emanates from WUC or ground water abstraction. The latest discovery of large deposits of base metals and energy minerals is a signal that the demand for water will increase drastically.

“If the economy will require further beneficiation of basic raw materials, then a more water intensive development path will eventuate,” stated the report.

The report has recommended that adjustment of the price of at least P22/m3 must be phased out. In addition, be modified to take into account government objectives, which include assuring that low income segments of the society have access to appropriately priced water.

According to the report, without ground water price that reflects the long run marginal cost of water, pricing of water by WUC will mean mining companies will choose to continue abstracting large volumes of ground water on an unsustainable basis.

The report recommended that without a reform of water pricing in Botswana no financial institution will fund the water pipeline from Pandamatenga to the North South Carrier. The government has reached agreement with the Zambezi Water Commission member states to abstract 495m3 of water per annum from the Zambezi River.

According to the report the water price will need to reflect the cost developing the new pipeline from Zambezi that is the long run marginal cost of water.

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