Water, power blight Bots economic growth

Gaborone- With recent calls to declare water and power shortages in the country a national crisis, the Bank of Botswana warned this week the shortages will probably restrict economic growth at a time when low commodity prices have reduced mining revenue.

The central bank warned of “negative impacts” that may arise as a result of disruptions in electricity and water supply.

The bank’s governor Linah Mohohlo said the disruptions of power and water are likely to hit the country’s Gross Domestic Product (GDP) in the long run, adding that there is need for regular rebasing of the GDP, hence reliable data is essential.

Economic growth slowed last year from 9.3 percent in 2013 as mining output rose at a slower pace of 4.5 percent, the central bank said.

This year economic growth is projected to be around the same level as in 2014, when the economy expanded 4.4 percent.

Botswana has been faced with continued water and electricity shortages in recent years due to less rainfall and the nation’s sole power plant Morupule B Power plant that has not been running at full capacity.

Reports indicate that power imports from neighbouring South Africa have also been disrupted as power utility Eskom implements rolling blackouts in that country.

Economic analysts at brokerage firm, Motswedi Securities also noted this week that the water and electricity sectors remain a major concern as power and water supply particularly in capital Gaborone, remain a challenge.

“The water and electricity sector, which has been dragging economic growth, suffered a -236.4% the lowest figure during the year 2014. For the year 2014, GDP growth was 4.4% relatively lower than the 9.3% (revised) recorded in 2013 despite the stronger performance from the Jwaneng mines during q3; where higher grade carats were produced,” the analysts said in their quarterly bulletin.

Analysts further observed that “this slower growth was also attributable to the water and electricity sector which registered the only negative growth (of -18.5%) during 2014. The trade, hotels and restaurants (sectors) posted the 2nd largest growth of 7.1% reflecting the resilience of some of the developed economies such as the US.”

Recently Botswana Power Corporation (BPC) Chief Executive Jacob Raleru said that starting this month, the power utility will begin running unit three at Morupule B Power plant followed by the other units in due course. The power plant consists of four units all capable of producing 150 MW each and 600 MW collectively.

However, the BPC has admitted that at the moment only two units are operational though they are not producing power at full capacity.

This has left most parts of the country in the dark on daily basis between 6 and 10pm, and sometimes even beyond. The power cuts have affected companies which have since cut down their production forecasts.

 Permanent Secretary in the Ministry of Minerals, Kgomotso Abi told the Parliamentary Public Accounts Committee recently that Water Utilities Corporation (WUC) was failing the nation because of water losses that were above 50 per cent in some of the areas due to dilapidated infrastructure.

“WUC does not have the financial muscle to address problems of water resources and we are currently working on a proposal to submit to the cabinet and eventually to Parliament as an urgent matter,” he said.

Minerals, Energy and Water Resources Minister Kitso Mokaila say there were no improvements in water levels in the southern part of the country during the recent rain season.

Botswana relies on rainfall and recently the weather patterns have become very unpredictable culminating in dwindled rains.

Minister Mokaila this week met an irate contingent of the business community to explain the status regarding water and power situation in the country.

At the meeting which was mobilised by the private sector body, Business Botswana,  Mokaila explained that two dams near Gaborone were left with at most, four months water supply and soon, the north-south carrier would be the only source of water to the greater Gaborone area.

The business community took the opportunity to express its misgivings about the water and energy crisis while some proposed to find a way to have public-private partnerships, to exploit opportunities opened up by the situation.

Currently, water sources are providing only 67 million litres of water per day, only about half of the required 125 million litres in the region.

June 2015
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