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Infrastructure regulation in Africa: Botswana

Botswana, a middle-income nation, has one of the fastest growing economies in the world today. It has enjoyed an excellent record of political stability since independence in 1966, a consistent focus on education investment has led to high education levels, and the country has one of sub-Saharan Africa’s highest investment grade sovereign credit ratings.

The infrastructural challenges in the country are quite big, from developing rail links with neighbouring countries’ ports to increase its export revenue to dealing with an energy supply deficit and growing its broadband; this makes it an investment destination for many prospective investors.  Below we discuss some of the country’s various sectors to see where things stand and what plans are in the works:

Roads

Botswana’s road safety reputation is not good, the consequence of a very high fatality rate. Moreover, like elsewhere in Africa, the rate of accidents is steeply increasing. In 2008 road deaths were the second leading cause of death in Botswana after HIV/Aids[i]. In an effort to turn things around, the Road Traffic Amendment Act of 2008 was implemented, which increased the fines and prison sentences afforded to those who violate the country’s road safety laws.

Rail

Botswana’s rail network caters to south-eastern portion of the country. The state-owned Botswana Railways (BR) is the only rail operator in the country.

Botswana is expecting its coal production to increase greatly over the coming years, and as such the landlocked country is in talks with Namibia, South Africa and Mozambique to build rail lines connecting it with Walvis Bay, Richard’s Bay and Maputo respectively. Charles Siwawa, chief executive officer for Botswana’s Chamber of Mines, has said that the country’s coal production is sufficient to warrant construction of all three lines (there is an estimated supply of 200 billion metric tons in the country’s central expanse)[ii]. Siwawa added, “The railway lines are very, very important to us. They will take us to the next level of our development.”

Healthcare

At present the greatest health challenges in Botswana, like elsewhere in Sub-Sahara Africa, are HIV/Aids, malnutrition, and tuberculosis. According to the World Health Organisation (WHO), healthcare services in Botswana “are decentralized to the district level and delivered through a hierarchical network of health facilities, ranging from referral hospitals (0.5%) to district (2%) and primary hospitals (3%), and finally to clinics (43%) and health posts (52%) operated by the Government of Botswana through the Ministry of Health, faith-based organizations and mining companies.” It adds that there are more than 800 mobile services available to the public.

Energy and water

The Botswana Energy and Water Regulatory Agency (BEWRA), in the process of being established, is an independent regulator that will hopefully meet the power and water challenges faced by the country. The hope is that it will draw in more private sector funding, which is needed to build up the infrastructure in order for Botswana to be self-sufficient and progressive. In 2011 Botswana was importing 68 percent of its electricity needs from South Africa, but owing to South Africa’s own energy crisis the cost of importing power has become unsustainably expensive, and so Botswana has recognised the need to focus on developing its own sources of power[iii].

“New power generation capacities will most probably be based on coal, given the large untapped deposits available in the country,” says Celine Paton, research analyst at Frost & Sullivan’s Energy and Power Systems.

“They will be owned by independent power producers (IPPs) given the limited financial means available to the loss-making state-owned power utility, Botswana Power Corporation (BPC). Indeed, new power generation capacities are urgently required in Botswana as peak power demand is hardly met.”

It is also hoped that BEWRA will guarantee better tariffs, thereby drawing in more private sector investors.

ICT

Botswana liberalised its telecoms sector back in 1994. Today the Botswana Communications Regulatory Authority (BOCRA) is responsible for licensing all independent operators.

Botswana’s ICT sector is currently experiencing substantial growth, particularly in terms of mobile. The CIA World Factbook estimated that in 2011 there were 2.9 million cell phones in the country, a figure that outstrips the 2012 World Bank population estimate of 2.004 million people.

The country however is lagging in terms of its internet use. According to BOCRA, “Usage of the Internet in Botswana is still in its infancy, with low Internet penetration and extremely low broadband penetration due to a number of factors including high computer prices, high cost of services, low IT literacy, a lack of local Internet content, power supply problems and a perception of low-quality service. [A 2008 BOCRA market study] established that the international data gateway market in Botswana is not yet competitive and that the ADSL access, leased lines and international data markets potentially need price regulation.”[iv]

The ICT, energy and rail sectors in Botswana have clear development goals ahead of them, while the healthcare and road sectors have more perennial issues that require robust strategies if real and sustainable progress is to be made. The country has reasonably strong economic and resource bases such that the future could prove bright provided these infrastructure challenges are timeously and effectively met.

 

David Okwara

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