UNIVERSITY OF ZIMBABWE FACULTY OF ENGINEERING DEPARTMENT OF CIVIL ENGINEERING Economic valuation of selected direct and indirect use values of the Makgadikgadi wetland system, Botswana TSHEPO SETLHOGILE MSc. Thesis in Integrated Water Resources Management June 2010 UNIVERSITY OF ZIMBABWE FACULTY OF ENGINEERING DEPARTMENT OF CIVIL ENGINEERING In collaboration with ECONOMIC VALUATION OF SELECTED DIRECT AND INDIRECT USE VALUES OF THE MAKGADIKGADI WETLAND SYSTEM, BOTSWANA By: TSHEPO SETLHOGILE Supervisors: DR. RENNETH MANO DR. JAAP W. ARNTZEN MR. COLLIN MABIZA A thesis submitted in partial fulfilment of the requirements for the Master of Science Degree in Integrated Water Resources Management June 2010 Economic valuation of selected direct and indirect use values of Makgadikgadi wetland, Botswana. DECLARATION I, Tshepo Setlhogile declare that this thesis emanates from my own work. All the sources that I have used and quoted have been duly indicated and acknowledged by means of complete citations and references. This thesis has not been submitted before for any degree at any university. Signed: ………………………………….. Date:…………………… i T. Setlhogile MSc. IWRM Thesis ©2010 Economic valuation of selected direct and indirect use values of Makgadikgadi wetland, Botswana. The findings, interpretations and conclusions expressed in this study do neither reflect the views of the University of Zimbabwe, Department of Civil Engineering nor of the individual members of the MSc Examination Committee, nor of their respective employers. ii T. Setlhogile MSc. IWRM Thesis ©2010 Economic valuation of selected direct and indirect use values of Makgadikgadi wetland, Botswana. TABLE OF CONTENTS DECLARATION........................................................................................................................i LIST OF TABLES....................................................................................................................vi LIST OF FIGURES AND BOXES.........................................................................................vii LIST OF ABBREVIATIONS AND ACRONYMS................................................................viii DEDICATION..........................................................................................................................ix ACKNOWLEDGEMENTS......................................................................................................xi ABSTRACT.............................................................................................................................xii CHAPTER ONE: INTRODUCTION.......................................................................................1 1.1 Background ................................................................................................................. 1 1.2 Problem statement ....................................................................................................... 3 1.3 Objectives .................................................................................................................... 4 1.4 Justification ................................................................................................................. 4 1.5 Structure of the thesis .................................................................................................. 5 CHAPTER TWO: LITERATURE REVIEW...........................................................................6 2.1 Introduction ................................................................................................................. 6 2.2 Definition of wetlands ................................................................................................. 6 2.3 Types of wetlands........................................................................................................ 8 2.3 Economic importance and valuation of wetlands ..................................................... 10 2.3.1 Why value wetlands? .................................................................................................... 10 2.3.2 Wetlands‘ economic values .......................................................................................... 12 2.4 Wetlands‘ valuation techniques ................................................................................ 14 2.5 Empirical literature .................................................................................................... 18 2.6 Conclusions ............................................................................................................... 24 CHAPTER THREE: DESCRIPTION OF THE STUDY AREA..........................................25 3.1 Introduction ............................................................................................................... 25 3.2 The Makgadikgadi Wetland area .............................................................................. 26 iii T. Setlhogile MSc. IWRM Thesis ©2010 Economic valuation of selected direct and indirect use values of Makgadikgadi wetland, Botswana. 3.3 Hydrology of the wetland system.............................................................................. 28 3.4 Ecological regime of the Makgadikgadi wetland ...................................................... 29 3.5 Formation of pans...................................................................................................... 32 3.6 Profiles of the Community Based Organisations ...................................................... 32 CHAPTER FOUR: METHODOLOGY..................................................................................35 4.1 Introduction ............................................................................................................... 35 4.2 Estimation of the direct use value of the wetland‘s resources to the CBOs .............. 35 4.3 Estimation of the groundwater recharge ................................................................... 43 CHAPTER FIVE: RESULTS AND DISCUSSIONS............................................................47 5.1 Introduction ............................................................................................................... 47 5.2 Characterisation of Makgadikgadi wetland resources for different resource users .. 47 5.2.1 Characterisation of wetlands users ................................................................................ 47 5.2.2 Characterisation of the wetland‘s goods and services ................................................... 49 5.3 Estimated direct use value of wetland resources to different CBOs ......................... 55 5.3.1 Financial models ........................................................................................................... 55 5.3.2 Economic models .......................................................................................................... 58 5.3.3 Sensitivity Analysis....................................................................................................... 58 5.3.4 Conclusions ................................................................................................................... 60 5.4 Groundwater recharge ............................................................................................... 61 CHAPTER SIX: CONCLUSIONS AND RECOMMENDATIONS......................................68 6.1 Introduction ............................................................................................................... 68 6.2 Main conclusions....................................................................................................... 68 6.3 Recommendations ..................................................................................................... 69 REFERENCES.......................................................................................................................71 APPENDICES.........................................................................................................................76 Appendix 1: 2010 community hunting quota for Xhauhwatubi Development Trust .......... 77 Appendix 2: A template for the project financial analysis ................................................... 78 iv T. Setlhogile MSc. IWRM Thesis ©2010 Economic valuation of selected direct and indirect use values of Makgadikgadi wetland, Botswana. Appendix 3: Summary results for the CBOs ........................................................................ 79 Appendix 4: Xhauxhwatubi Trust Investment model .......................................................... 81 v T. Setlhogile MSc. IWRM Thesis ©2010 Economic valuation of selected direct and indirect use values of Makgadikgadi wetland, Botswana. LIST OF TABLES Table 2.1: Economic value of Muthurajawela wetland, Sri Lanka ....................................................... 20 Table 2.2: Economic value of Nakivubo wetland, Kampala (Uganda) ................................................ 22 Table 3.1: Flow records in the Makgadikgadi ...................................................................................... 29 Table 3.2: Wildlife population estimates for species within the Makgadikgadi ( 1996-2006) ............. 30 Table 4.1: Village population sizes ....................................................................................................... 35 Table 4.2: Water requirements per head of livestock ........................................................................... 44 Table 4.3: DWA Design Manual recommendations ............................................................................