BEMA opposes proposed BPC tariff increases

Laone Choeunyane | Wednesday February 18, 2026 06:00

Late last year, the power utility lodged a tariff application with the Botswana Energy Regulatory Authority (BERA) requesting for an average 46% increase in tariffs from April 2026, with the adjustment for households proposed for 68%. The request has since attracted objections from both domestic and business electricity users at a time incomes have been battered by weak economy. Last week, the Botswana Exporters and Manufacturers Association (BEMA) joined the call from those opposed to the requested increment in a letter addressed to Permanent Secretary in the Ministry of Trade and Entrepreneurship, Joel Ramaphoi. In the correspondence, BEMA CEO Mmantlha Sankoloba laid out what she described as far reaching risks to competitiveness, employment, investment and economic diversification. While acknowledging the need for BPC’s financial sustainability, Sankoloba argued that the proposed adjustments fail to sufficiently account for the broader economic consequences. “Electricity is a critical production input for manufacturing and industrial activities,” she stated.

“A significant upward adjustment in electricity tariffs will directly increase production costs, making locally manufactured goods less competitive in both regional and international markets.” She noted that manufacturers are already grappling with elevated operational costs linked to logistics, imported raw materials, regulatory compliance and financing, leaving profit margins razor-thin. “BEMA members already face high operational costs linked to logistics, imported raw materials, compliance requirements and financing. The proposed increase risks eroding already narrow profit margins and undermining national efforts to promote local value addition and industrial growth,” the CEO added.

Sankoloba stressed that “manufacturing remains one of the most labour-absorbing sectors of the economy, with strong potential for semi-skilled and skilled employment. Increased electricity costs will likely force manufacturers to reduce output, postpone expansion plans, or retrench workers to survive.” She added that small and medium-sized manufacturers would be disproportionately affected, potentially resulting in factory closures and significant job losses at a time when youth unemployment remains a critical national challenge. “Many competing economies actively attract manufacturers through subsidised electricity tariffs, industrial rebates and incentives within special economic zones. “A sharp increase in electricity tariffs in Botswana may encourage existing firms to relocate operations to countries offering more competitive utility costs and investment incentives, while simultaneously discouraging new manufacturing investments,” she said.

BEMA further warned that higher tariffs could undermine Botswana’s diversification agenda and Vision 2036 aspirations, weaken downstream industries linked to mining and agriculture, and slow progress on import substitution. The association also anticipates inflationary spillovers, arguing that increased industrial tariffs would be passed on to consumers through higher prices, thereby raising the cost of living and government procurement expenses. In its December 17 application, BPC justified the proposed 47% average increase, from P1.56/kWh to P2.30/kWh, by citing financial losses, unreliable local generation, costly electricity imports and rising input costs, resulting in a projected P3.477 billion revenue gap for 2026/27. Sankoloba urged the Ministry to work with BERA, industry stakeholders and BPC to explore phased adjustments and targeted relief measures. At the February 10 public hearing convened by BERA, she reiterated the association’s warning that approving the increase would amount to “killing this infant industry.”