Saturday, May 18, 2024

Water and electricity woes to slacken economic growth

Apart from disrupting production and economic activity, continued water and electricity cuts are expected to negatively affect the national economy by claiming a larger share of government spending. The Ministry of Minerals, Energy and Water Resources (MMEWR) received the largest share of the 2015/16 development budget, which was P3.32 billion or 25.7 percent of the budget.

The funds were primarily meant to address the country’s water and power problems. This therefore means the current water and electricity problems will exhaust the limited public funds as government battles to normalize production and consumption.

This obviously means that government will be tight-fisted in its allocation of funds to other sectors of the economy, thus depriving them of maximum value for the benefit of people. So, every other sector will suffer until infrastructural developments are in place to ensure reliable water and electricity supply. Recent Gross Domestic Product (GDP) figures indicate that the water and electricity sector recorded negative growth of 1.7 while the agriculture sector also recorded a decrease of 0.7.

The decline registered in water and electricity is a result of continuous technical and contractual glitches which have heightened the threat of regressive development. The dire water and electricity situation has piled pressure on government to maintain business confidence, which will complement Botswana Investment and Trade Centre (BITC)’s efforts to lure private capital into the country. Sadly, Botswana has not been able to quantify the impact of water and electricity outages on business confidence. This however does not negate the fact that addressing the water and power crisis demands agility and robustness in implementing working solutions. Meanwhile all other industries recorded positive growth of at least 1.0 percent over the period.

The figures show that trade, hotel & restaurants, general government and finance and business services sectors were the main contributors to increase in real GDP. Broadly speaking, real GDP increased by 4.3 percent in Q1:2015 against 3.6 percent in the same quarter in 2014. This is despite a measly increase of 1.2 percent in the mining sector, compared to 10 percent in the same quarter in 2014. The slow growth in mining was pinned to the decline in diamond production by 2.5 percent against 33.9 percent recorded over the same period last year.


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