REPUBLIC OF BOTSWANA BOTSWANA’S NATURAL RESOURCE ACCOUNTS: WATER ACCOUNTS: PHASE 1 Prepared by CSO AND NCSA GOVERNMENT OF BOTSWANA DECEMBER 2001 TABLE OF CONTENTS Acknowledgement EXECUTIVE SUMMARY 1. BACKGROUND 2. FRAMEWORK FOR WATER ACCOUNTS AND SUMMARY OF DATA SOURCES 2.1. Type of accounts 2.2. Classification of water 2.3. Data sources and major data problems 3. OVERVIEW OF WATER USE IN BOTSWANA (1993 AND 1998) 3.1. National Trends in Water Use 3.2. Water Use by Economic Sector 3.3. Supply Losses 4. ECONOMIC BENEFITS OF WATER USE BY SECTOR 5. INTERNATIONAL COMPARISONS OF WATER USE 6. COSTS AND REVENUES 6.1. Water Utilities Corporation 6.2. Department of Water Affairs 6.3. District Councils and self-providers 7. CONCLUSIONS AND THE WAY FORWARD APPENDIX A: Data Sources APPENDIX B: Detailed Water Accounts Data Acknowledgement This report was prepared by the National Conservation Strategy Agency and the Central Statistics Office with the assistance of Dr. Glenn-Marie Lange of the Institute for Economic Analysis, New York University, United States of America. The assistance was funded under the USAID Co-operative Agreement No. 890-A-00-98-00086-00, that established the Southern African Natural Resources Accounting (NRASA) project for Botswana, Namibia and South Africa. NRASA was programmed to assist and enhance the in-country capacity of the three countries to prepare and utilise Natural Resource Accounts in the decision-making process to achieve sustainable natural resources development. The following key personnel, the late Mr Marshall Moseki, Ms. Sarah Kabaija, Ms. Minkie Pheto and Mr James Katale all of the Central Statistics Office (Ministry of Finance and Development Planning), Ms. Mokgadi Monamati and Mr. Edward Karkari of the National Conservation Strategy (Co-ordinating) Agency (Ministry of Lands, Housing and Environment) formed the Technical team to construct the accounts. The Technical team was aided by Professor Jaap Arntzen of the Centre for Applied Research, Gaborone, Botswana. The construction of the accounts also involved members of staff from the Department of Water Affairs, Water Utilities Corporation and from the Department of Local Government Services who represented the institutions as core teams in the collation of the respective primary data sets. The interest shown and support given by the Heads of these institutions contributed largely to the success achieved in the Phase 1 of this exercisee. Such interest and support have been found to be invaluable and it is anticipated that the support especially would be maintained first and foremost in improving on data compilation and storage within each institution to sustain future work (Phase 2) in up-dating the accounts. The primary aim is to enhance decision-making in the wise use and development of our water resources to sustain national development. National Conservation Strategy Agency MLHE. BOTSWANA’S NATURAL RESOURCE ACCOUNTS: WATER ACCOUNTS (PHASE 1) EXECUTIVE SUMMARY 1. OVERALL TREND Total water use in Botswana has increased only 5% over the 5 years from 1993 to 1998, from about 143 to 150 million cubic meters although the economy and population have grown much faster. (Economic growth rate and the population growth rate over the 5 year period could be appropriate points of references to emphasis the significance of the increase of the total water use The economy relies increasingly on formal water supplying institutions (i.e. WUC, DWA and DC) instead of self-providers. WUC, DWA and DC supplied 45% of water used in 1998, up from 39% in 1993. Botswana relies on groundwater for most of its water needs (60%), but dams are slowly contributing a larger share (Table 1, Figure 3). 2. WATER USE BY ECONOMIC SECTORS The Agricultural sector is the major user of water in most countries and Botswana is no exception to this global trend. A significant proportion of 50% of the total water use in 1993 was for agriculture, comprising of about 35% in the traditional sector, dominated by the livestock industry, and the other 15% in commercial agriculture which is mostly irrigated crop farming. (Table 2). The use of water by the Government sector increased by 30%, thereby increasing its share of total water use in the economy from 5% to 6.6% between 1993 and 1998. Following agriculture, ‘households’ constitute the second largest user of water, and one that is rising faster than most sectors of the economy. Though total water use increased by only 5%, household water use increased by 21%, increasing its share from 28% in 1993 to 33% in 1998. 3. UNACCOUNTED WATER AND LOSSES WUC undertook a programme to reduce physical leakages in the city system. The result was a dramatic reduction in water losses, from 30% to 14% in 1998 and to 9% in 1999. The average rate of unaccounted-for water across all 17 villages has declined somewhat between 1993 and 1998, from 28% in 1993 to 24% in 1998. However, there is a tremendous range of loss rates for the different villages supplied by DWA. In 1993 the lowest reported loss rate was 6% for Letlhakane and the highest was 49% in Mogoditshane. District Councils and self-providers together account for a majority of water use in the country but do not provide estimates of losses. If we assume that losses of other providers are similar, the country’s total loss rate is 15.7%. 4. COMPARATIVE ECONOMIC CONTRIBUTION BY SECTOR RELATIVE TO WATER USE Agriculture, using 50% of all water in 1993, contributed only 4% of national income (value- added) and 2% of formal sector employment, if full-time farmers were considered part of the workforce, agriculture's share of employment increases to 32%. Within agriculture, the traditional sector makes a greater economic contribution, relative to the share of water it uses, than the commercial sector, mainly because commercial sector water use is dominated by irrigation, which requires much higher amounts of water for the income generated than does livestock. Mining makes a strong economic contribution in terms of income (35%), but not employment (under 4%), relative to its water use (10%). Manufacturing shows considerable variation—the water-intensive food and beverage sectors generate less income and employment relative to the water they require compared to other manufacturing sectors. The Service sectors also show variation in water intensity and economic contribution. The economy is producing higher levels of GDP for a given amount of water used. GDP per cubic meter of water used rose from nearly P 77 to P 96, an increase of 26%. This increase may have been achieved in two ways: 1)-water conservation measures or, 2) through a change in the structure of the economy. Because water efficiency is an important goal, more work should be undertaken to determine the reason for increasing macroeconomic water efficiency. In Agriculture, the economic contribution of water per cubic meter of water use declined between 1993 and 1998, from P 6.75 to P 6.52. This change resulted mainly from the decline in livestock, a more valuable use of water than irrigation (Table 2). The economic efficiency of water use in Mining increased by an impressive 25%, from P 244 per cubic meter of water use in 1993 to P 302 in 1998, largely due to water conservation measures in diamond mining. The economic efficiency of water use in the Service sectors also rose—in this instance by 51% from P 927 in 1993 to P 1404 in 1998. 5. INTERNATIONAL COMPARISONS Comparing three countries in the region, without prejudice to the differences in socio- economic settings and water resource endowments for Botswana, Namibia, and South Africa, Botswana has the lowest per capita use of water at 95 cubic meters per person per year in 1996. Namibia has a per capita consumption of 144 cubic meters of water per person whilst South Africa’s per capita consumption stood at 412 cubic meter per person. Adjusting for agriculture, Botswana and Namibia were very similar, though South Africa still consumed much more water per person. The average Pula of GDP per cubic meter of water was P 124 for Botswana, P 45 for Namibia, and only P20 for South Africa. 6. COSTS AND REVENUES Very little progress has been made in this aspect of the study so far because information about costs of supplying water and the basis of revenue is often not available from water suppliers or is very incomplete. Review of information from WUC shows that all the existing tariff rates increased between 1993 and 1998, and the increase was greatest for the rates for standpipes. At the time of the review, information was not accessible about the costs of supplying water to different towns. With the review of information at the DWA serious gaps in the cost and revenue data were evident and for instances several months' data were found missing out of any particular year. It was therefore impossible to estimate the missing figures for costs and revenues. No cost and revenue data were available from District Councils and self-providers. This part of the exercise is to be undertaken during the Phase 2 of the programme. 7. OVERALL CONCLUSION The current (Phase 1) NRA work has shown its value, among others by: • Showing the trends in water uses. Trend analysis act as an ‘early warning’ system among water users. • Showing the macro-economic contribution per water unit of the different economic sectors. This allows policy makers to make a more- informed choice regarding the allocation of water to different economic activities. • Comparing Botswana’s water use with that of other countries. Lessons may be learnt from other countries or vice versa. The interpretation of the differences in the water use per person and the average Pula of GDP per water for the 3 countries should, however, be done cognizant of the socio-economic dimensions pertaining in each country.