Botswana President Ian Khama delivering State of the Nation Address 2014

For the second year in a row, Botswana President Ian Khama highlighted the importance of natural capital accounting (NCA) to Botswana’s economic development in his annual State-of-the-Nation address on November 13, 2014, and specifically mentioned the Wealth Accounting and the Valuation of Ecosystem Services program (WAVES) and that it is being used to "reform” the nation’s accounting systems.

The mention of NCA in such an important speech signals it has been mainstreamed in critical policy making channels and has the highest level of support. 

“There is reaffirmation that WAVES counts as an outfit that can inform national development planning moving forward,” said Mr. Kelapile Ndobano, Deputy Permanent Secretary of Botswana’s Ministry of Finance and Development Planning and Chair of the WAVES-Botswana Steering Committee.

Mr. Ndobano also pointed to the relevance of WAVES “within the bigger sustainability context of Botswana,” and the usefulness of the outputs of the different accounts Botswana is constructing, including water, minerals and energy, land and ecosystems (including tourism), and macroeconomic indicators of sustainable development. 

The Government of Botswana co-hosted the Summit for Sustainability in Africa in 2012, which resulted in the Gaborone Declaration—a concrete set of proposals related to recognizing the role of natural capital in development. In 2013, the 10 signatory countries reconvened to take stock and operationalize how to bring natural capital from the periphery to the center of all economic decision-making.

 

President Ian Khama highlighted WAVES in Botswana’s
2014 State-of-the-Nation Address:
 
86. Government also remains committed to ensuring that the Gaborone Declaration for Sustainably in Africa bears fruit. To this end we are undertaking an exercise to value the contribution of different streams of natural capital to GDP. In addition to our water and minerals, we wish to assess the values of other resource based economic activities such as pastoral agriculture, tourism, and land management so as to ensure that our measure of the national wealth is inclusive. In this regard the findings of the Wealth Accounting and Valuation of Ecosystem Services (WAVES) project will be used to reform our accounting systems.

 

 

 

 

 

 

 

 

 

Botswana’s vast stock of natural resources account for one-third of the country’s total wealth and underpins many important contributions to the economy such as nature-based tourism, mining and agricultural activities. NCA is a tool that can help the government determine the true value of those contributions, optimize the use of its natural resources, diversify its economy and reduce poverty.

 
The Botswana Economic Advisory Council (BEAC), a ministerial-level group from the government and private sector chaired by President Khama, receives progress reports from the WAVES Steering Committee, and has expressed strong support for the WAVES work program.
 
Efforts have begun to establish NCA units and designate officers with dedicated responsibilities for NCA within each ministry. Technical working groups that are multi-sectoral and chaired at the policy level by deputy permanent secretaries provide oversight function to the activities of the WAVES sectors.
 
Ongoing WAVES activities have led to the production of water accounts, preliminary mineral accounts and scoping reports for ecosystem and energy accounts. 
 
Results from the accounts show:
  • Water accounts: Water use per capita and water productivity (the amount of water per $ of GDP) have both improved over the past 20 years, and water productivity has improved in every sector of the economy. But given Botswana’s water scarcity, further improvements in water productivity are needed to ensure sufficient water resources for future economic growth. The Integrated Water Resources Management plan, launched earlier this year, identifies water accounting as a key tool for monitoring water use, and to help assess options for development plans based on water resources.
  • Preliminary mineral accounts: Diamonds account for more than 80 percent of the value of mineral exports and generate most of the resource rent. However, the contributions from copper, nickel, soda ash, coal and gold have been growing in recent years. Botswana has been very successful at recovering the resource rent and using most of it for investment, and is now reviewing the possible adoption of fiscal rules for managing mineral revenues.
  • Ecosystem accounts scoping report: WAVES is working with government agencies to fill data gaps in the tourism sector, rangeland values, and ecosystem condition indicators that will provide the basis for the accounts.
  • Energy accounts scoping report: Constructing energy balances and energy accounts will provide a coherent overview of the use of energy resources, the impact of electricity shortages on the economy and ways to address this, including a review of the energy supply mix. This tool will be especially important as Botswana considers how to develop its vast coal reserves as well as significant solar power potential.
 
In January and February 2015 a series of training workshops will take place for water, minerals, and energy accounts. There will also be a workshop for the estimation and use of new macroeconomic indicators that provide a better measure of long-term prospects for development by more fully reflecting natural capital.
 
"Once WAVES is internalized across sectors during the implementation of NDP (National Development Plan) 11, it is expected that the system of national accounts will reflect a more robust picture of the strength of the economy to sustain itself," said Mr. Ndobano.