Tuesday, July 5, 2022

Water and electricity sector shrinks by 205.5%

The latest update on Botswana from the African Development Bank (AfDB) shows that the water and electricity sector continues to affect the economy and in the fourth quarter of 2013 shrunk by 205.5 percent.

All other sectors of the economy grew by more than 3 percent during the same period.

Minister of Finance and Development Planning, Kenneth Matambo, also spoke about the sluggishness of this sector in his 2014/15 budget speech, noting how the cost of inputs into it exceeded the value of sales.

This negative growth was a result of the delay in the commissioning of Morupule B Power Station which resulted in a shortage of domestic power supply, and increased costs of imports from South Africa.

Increased operational costs at the Botswana Power Corporation (BPC) required government funding support.

In the 2011/12 financial year, the Corporation had recorded a loss of P1.652 billion, following a loss of P796.6 million recorded in the previous year, again as a result of the Morupule B Power Station failing to take off as planned.

Recurring drought in Botswana has resulted in water shortages countrywide for both human and agricultural use.

As a result, the government has had to undertake measures that include development of water infrastructure such as dams and water pipelines.

Taking stock of its situation, the Water Utilities Corporation (WUC) opened talks with the continental bank last year to seek funding that would enable it to make more real its slogan – “we keep it flowing for you.”

In the past, the Bank has expressed concern (shared by both analysts and members of the public) that the two major consumers of water ÔÇô agriculture and mining ÔÇô continue to get heavy subsidies (up to 40 percent) from the government.

This subsidy is seen as unfairly high and coming at great disadvantage to ordinary people who have to bear its burden.

AfDB stated that this situation underscores the need to restructure the water sector, and commended the government for trying to consolidate all of the water activities into one organisation rather than have water supplied to villages from various agencies and urban water supplied by WUC.

The latter’s loss has been attributed to its inheriting “poor, old, and dilapidated infrastructure” from district water authorities and having to spend a substantial amount of money fixing it.
The Bank also co-sponsored the Morupule B Power Station with the World Bank.

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