Whip keeps cracking on over-burdened consumers

Dire straits: The cost of living is rising above most people’s reach PIC: PHATSIMO KAPENG
Dire straits: The cost of living is rising above most people’s reach PIC: PHATSIMO KAPENG

Combi operators went on strike this week and if their demands are met, fares will reach P7 per trip. Meanwhile, electricity tariffs are due to rise by five percent next year and prices of goods and services have increased beyond the reach of many. For consumers, the hits just keep on coming, notes Staff Writer MBONGENI MGUNI

The list of items that have increased this year is lengthy and exhausting. From the sharp jump in general prices triggered by the increase in Value Added Tax (VAT) and the fuel levy in April to higher Botswana Housing Corporation rentals and the introduction of the sugar levy, consumers have endured a nightmarish year.

When the electricity and water tariff adjustments of April and June 2021 respectively are added to this picture, and the fuel price increases of July and October 2021 also considered, the pain consumers are suffering in their pockets becomes clearer.

And yet in a few days, consumers will find out whether public transport fares will go up for the second time in 15 months. Combi operators, a key part of the under-appreciated but critical sector that transports the economy, are pressing for fares to reach P7 from the current P5. The last increase was awarded in August last year and was met with outrage by commuters already overstrained by the impact of COVID-19 on incomes.

Mmegi samples some social media readers’ comments on the combi operators’ push for higher fares:

Mmoloki Osele

“Salaries for people were not increased why bone ba batla increment on minibuses? They should negotiate fairly looking at both sides themselves and the commuters.”

Scot Jake Seosenyeng

“Tomorrow an increase will be communicated and the people will cry... wait for it”

Phemo Keabaitse

“I hope they get what they want because essentially that’s what we need! If Taxi/Bus fare is up, salaries better be raised too!! I hope no union interferes and let Bus and Taxi Association do their thing...it’s a battle that is going to help us in the long run!”

Ca Lla“I think le rona we must stress out a point le our CEOs to organise pick up and drop transport. Bontsi ja rona are still crying out ka di salary amendment...I mean I personally don’t blame all the drama ...this was wise being put up with transport association le di secretary...WORD OF MOUTH”

Stanley Gwapela

“Waitse se se bothoko ke gore the government will increase the tariff and it will be felt by the end users.”

What consumers may not know, however, is that even more increases are waiting around the corner in 2022. The Botswana Power Corporation (BPC) has already requested an additional five percent average increase in tariffs for 2022, which will follow the three percent awarded this year and the 22% granted in 2020.

Earlier this year, the BPC submitted its tariff request for 2022-2023 to the Botswana Energy Regulatory Authority (BERA) saying the proposal was based on the projected required revenue to meet the operating, maintenance and financing costs of the corporation.

“The proposal also considered future energy demands, especially from Large Power Users such as mines,” BERA said in a notice.

“The need for sufficient revenues is also supported by Section 17 of BPC Act, which requires it to conduct its affairs on sound commercial lines and to produce a net operating income by which a reasonable return can be measured.”

The required revenue for BPC to meet its operating, maintenance and financing costs in 2022-2023 is about P6.15 billion coupled with a P500 million consumer tariff subsidy from government, as the shareholder.

The Water Utilities Corporation (WUC) is also expected to be pressing government for another upward adjustment in tariffs, after posting a pretax loss of P243 million for the year ended March 2021. The loss would have been deeper had government not injected a P167.3 million subsidy.

Earlier this month, WUC chief executive officer, Gaselemogwe Senai disclosed that the corporation was owed P1.3 billion in outstanding debts by various consumers, particularly households, due largely to the fact that the recently ended State of Emergency prevented the water utility from disconnecting users for non-payment. Recovering this debt also has costs associated through the engagement of debt collectors, he said.

Reports from players in the local fuel sector also indicate that pump prices remain below par, even after the recent increase.

The situation suggests BERA may have to again increase fuel prices, unless global crude oil prices decline or the pula suddenly becomes stronger against the dollar. Previously, the National Petroleum Fund acted as a buffer against frequent pump price adjustments, but the reserve has been running on fumes in recent years.

Meanwhile, in the shops, suppliers are passing on the costs to already hard-hit consumers.

The latest Statistics Botswana report on inflation indicates that in the last 12 months, the prices of food and non-alcoholic beverages rose by nearly seven percent. Within that, the prices of oils and fats rose by 26%. Bread and cereals, which include starches such as sorghum, maize, wheat and rice, are up about six percent, while meat prices have also risen by a similar level.

The Bank of Botswana expects the rate of increases in prices to only decline from the second quarter of next year. In the meantime, the central bank says the risks to the inflation outlook are “assessed to be skewed to the upside”, meaning there is more upward pressure on inflation, than downward pressure.

The expected combi fare increase will be yet another burden for consumers to bear in a year to forget.

Editor's Comment
A step in the right direction

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