Botswana’s Hidden Transport Bill

Botswana may be measuring an economy-wide burden approaching 17% of GDP as though it were merely another industry. Transport is arguably the most commonly experienced but least understood of all economic activities. Ask how large Botswana’s transport sector is and official statistics provide a reassuring answer.

Transport and storage account for only about 2.2% of GDP. Except that transport may be nothing of the sort. National accounts measure the output of the transport industry.

They count services produced by trucking companies, buses, taxis, airlines and railways. That is correct for calculating GDP, but it answers the wrong policy question. The economic question is not simply how much the industry produces or the scale of its infrastructure.

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It is how effectively transport enables the economy to grow. Every litre of fuel imported into Botswana carries a transport cost. Every road crash imposes medical, emergency, policing, insurance and productivity costs.

Every hour spent in congestion is lost time. Businesses holding additional stock because deliveries are unreliable carry an inventory cost. Then there are air pollution, carbon emissions, road maintenance and the cost imposed by distance itself.

The Second Republic Policy Think Tank estimates that, when these wider costs are considered, Botswana’s total transport cost structure may approach 17% of GDP. Roughly 6% is associated with transport energy, 4% with road crashes, 3% with congestion and delay, and about 2.2% with measured transport sector output, alongside further environmental and carbon costs. But the conclusion is important.

Transport is not a 2.2% sector. It is an economy-wide cost structure. Who is actually responsible for transport?

Roads sit within one institutional structure, public transport within another. Road safety crosses transport, police and health. Fuel pricing involves energy regulators and fiscal policy.

Rail, aviation and climate policy add further layers. Yet the economy experiences them as one transport system. A worker in Mogoditshane does not experience separate land use, road, bus and fuel policies.

She experiences the cost and time required to get to work. A farmer in Ghanzi does not care which ministry is responsible for roads, fuel or logistics. He experiences the cost of getting beef to market.

A manufacturer experiences electricity costs, inputs, inventory delays and freight charges as part of the cost of producing in Botswana. This is not an argument against infrastructure. For a landlocked country located between 700 and 1,800 kilometres from major seaports, efficient transport is fundamental to competitiveness.

Botswana cannot diversify into manufacturing, agro-processing or regional distribution while ignoring the cost of moving goods. Roads, railways, border infrastructure, logistics hubs and reliable public transport remain critically important. But infrastructure is a means, not an end.

A road is valuable if it reduces travel time, vehicle operating costs, crashes and logistics costs, or unlocks productive investment. A railway is valuable if it moves freight more efficiently than the alternatives. A bypass is valuable if the benefits of reduced congestion exceed its lifecycle cost.

The mistake is to measure success in kilometres constructed and pula spent. The correct measure is cost removed from the economy. Yet performance indicators remain skewed towards outputs such as paved road kilometres, vehicle registrations and traffic flows, rather than GDP generated, jobs created and wellbeing improved.

Economists measure energy, carbon and water intensity. Why not transport intensity? It asks how much movement, energy, time and infrastructure an economy requires to generate a unit of economic value.

A spatially dispersed economy with low density settlements, long commuting distances and weak domestic production will naturally be transport intensive. Botswana has these characteristics. Gaborone has expanded outwards into neighbouring settlements.

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