Socio-economic factors influencing sustainable water supply in Botswana.

Abstract

The paper examines the socio-economic and political issues of sustainable water supply in Botswana. It pays particular attention to the actual and potential role of economic instruments. Water consumption occurs both in a market and non-market contexts (producer = consumer). Due to rapidly increasing water demand and the fact that the "easy" solutions to increase water supply have largely elapsed, Botswana is concerned with water shortages which may hamper people’s basic needs and industrial development in the future. Other sustainability concerns relate to the environment (pollution), social factors (equity and affordability) and economic considerations (cost recovery and efficiency). Prices, costs and the value of water are instrumental in striking a compromise between these goals. Trends in pricing and their relationship with costs and resource value are presented, and the impact of prices and subsidies on water demand and supply reviewed in order to assess their contribution towards a sustainable equilibrium. There is a substantial scope to improve the performance of economic instruments such as price subsidies and tax relief. The long-term marginal costs calculated in the Botswana National Water Master Plan contribute to prices approaching the costs of water production, but it excludes the environmental considerations. Resource scarcity is partly reflected where it increases the water supply costs; the indirect use and non-use values and external impacts are not incorporated in the water charges. Higher prices would increase the economic feasibility of water recycling and water harvesting and generate investment capital needed for the expansion of the water supply systems. Government subsidies may discourage efficient resource use. It is generally concluded that there is need for greater emphasis on re-use of waste water and control of the demand by harmonizing fees or tariffs between urban and rural areas as far as non-essential use is concerned; and provide more incentives for large-scale consumers to increase water use efficiency and sustainability.