BPC - Buy Paraffin and Candles?

Sometimes the cheapest short term commercial answer proves very economically expensive in the long term and delaying the building of important infrastructure just retards the country in the longer term. How did a nation like Botswana, which has 2/3 of Africa's coal, with an enormous inferred resource of some 212 billion tonnes end up sitting in the dark? The simple answer is that Gaborone is no different from Lagos or Baghdad which both sit on a sea of oil and like Gaborone, also sit in the dark. Depending on what one believes, it is either God or nature that makes coal and oil, but it is men that generate electricity and it is the decisions of men that explain our darkness observes *PROFESSOR ROMAN GRYNBERG

It must be extraordinarily difficult to be in the shoes of Jacob Raleru, the CEO of the Botswana Power Corporation or BPC (not so affectionately dubbed ' Buy Paraffin and Candles' by the nation's long suffering and intermittent electricity users).  As I sat in my hot box sweating without electricity, I like so many people in Gaborone, had unkind thoughts about those who were stopping me from working. But the important question is not whose fault this is but what economic lessons there are for Botswana from its dependence on South African imports.

It is perhaps worth framing the issue a little differently. How did a nation like Botswana, which has 2/3 of Africa's coal, with an enormous inferred resource of some 212 billion tonnes end up sitting in the dark? The simple answer is that Gaborone is no different from Lagos or Baghdad which both sit on a sea of oil and like Gaborone, also sit in the dark. Depending on what one believes, it is either God or nature that makes coal and oil, but it is men that generate electricity and it is the decisions of men that explain our darkness. To understand Botswana's situation one needs to go back to decisions about electricity supply that were made by presidents Sir Seretse Khama and Ketumile Masire. At the time of the apartheid regime, the South African government pursued a 'two-legged' policy of economic development. One leg was cheap electricity and the other was cheap labour which itself was a result of apartheid. It was a very successful formula, which assured the prosperity of the white minority in South Africa for many decades. In order to assure both adequate and cheap electricity the apartheid government ran Eskom as a utility with the clear instruction from government to provide electricity cheaply at no profit. Eskom's managers behaved like all managers with such a commercial mandate and proceeded to use whatever surpluses that they generated not to make profits but to expand their generating capacity to assure a huge excess supply for the government, business and the country as a whole. In the process the South Africans created one of the world's biggest utilities and by the end of apartheid had far more capacity than it could possibly use.

Editor's Comment
Has life become worthless?

As many wondered what wrong the young boy could have done to end up killed, it emerged that his own cousin was a suspect in the murder after he claimed P50,000 from Botswana Life. Thato Tsametse, who was last week sentenced to death for the murder of his cousin, had reportedly taken out two Mmoloki Funeral Covers valued at P25,000 each.Over the years, the media has been covering the murder case, and some revelation has come up that certain...

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