Energy sector contributes P400m in levies annually
Cross-border trucks that frequent Botswana en-route to other countries are said to be providing much needed opportunities for the energy sector with almost P400 million generated as levies annually for the government.
With almost 25 000 cross-border trucks entering our borders every month, it is a massive opportunity which has provided not only jobs but also created a niche market for fuel sales for citizen owned petroleum companies.
Speaking at the Botswana Transport and Energy Summit held in Gaborone this week, Kwa Nokeng Oil Chief Executive Officer Mahube Mpugwa, said almost 14 million litres of fuel is sold through depots to cross-border transporters on monthly basis therefore equating to P33 million per month in levies.
“Convergence of both energy and transport sectors towards making a meaningful contribution to the economy is evident and one can only imagine what it would mean if the volume of cross-border traffic was to increase. It goes without saying that the investment in infrastructure is key to growing the transport sector and by extension the increase in levies collected on behalf of government through fuel sales,” said Mpugwa.
Further, with the world transforming rapidly and changing the way people and goods travel across cities, regions, countries and continents it will be imperative for Botswana to invest in smart urban transport solutions which will make cities more productive and livable.
While urbanization has given Botswana more economic opportunities and has assisted with job creation, raising incomes and reducing poverty, it has also brought urban sprawl and congestion.
According to Progressive Institute Chief Executive Officer, Mmoloki Mmolotsi, establishing a sustainable urban transport system requires a comprehensive and integrated approach to policy making and decision making with the aim of developing affordable, economically viable, people oriented and environment-friendly transport systems.
“Transport and energy enable the mobility of people and goods- enhancing economic growth and livelihoods while improving access to quality services .Transport and Energy strengthen connectivity at all levels, helping integrate economies, improving social equity, enhancing rural-urban linkages and building resilience. The energy dimension seeks to explore the potential and capacity of the diverse forms of energy to sustain Botswana’s economic development,” said Mmolotsi.
According to figures from Statistics Botswana, the local road network maintained by government stretches as far a 32 564.3km as of 2021 while goods transported via rail stood at 216 059 tonnes as of the fourth quarter of 2022. Further, the report indicates quite an alarming situation of absence of freight and mail tonnage in air transport since 2017 until 2021 which shows a key gap in the sector.
On the other hand the energy sector has a huge potential with 212 billion tonnes of coal with coal fired plants being the foundation of Botswana’s energy framework. As it stands the sector’s potential lies in solar, biogas potential and coal bed methane.
According to Acting Minister of Minerals and Energy- Thulaganyo Segokgo, there is a need for sustainable economic development through planning, design and implementation of a purposeful transformation of the transport and energy sectors in Botswana.
“Transport and energy are the main drivers of economic activity across the world as they facilitate trade and commerce and other business enterprising initiatives which in turn result in increased employment creation, education and health care. However, one of the biggest challenges is how to plan, design and mobilize investment required for successful delivery of a vibrant transport system for the country,” said Segokgo.
The summit comes at a time in which Botswana and the world have experienced the ravages of Covid-19 pandemic and the impacts of the Ukraine-Russia war which have not only affected supply and prices of fuel but also various economies.
