The paper examines the socio-economic and political issues of sustainable water supply in Botswana. It pays particular attention to the actual and potential role of economic instruments. Water consumption occurs both in a market and non market contexts (producer = consumer). Due to rapidly increasing water demand and the fact that the 'easy' solutions to increase water supply have largely elapsed. Botswana is concerned with water shortages which may hamper people's basic needs and industrial development in the future. Other sustainability concerns relate to the environment (pollution), social factors (equity and affordability) and economic considerations (cost recovery and efficiency). Prices, costs and the value of water are instrumental in striking a compromise between these goals. Trends in pricing and their relationship with costs and resource value are presented, and the impact of prices and subsidies on water demand and supply reviewed in order to assess their contribution towards a sustainable equilibrium. There is a substantial scope to improve the performance of economic instruments such as price subsidies and tax relief. The long-term marginal costs calculated in the Botswana National Water Master Plan contribute to prices approaching the costs of water production, but it excludes the environmental considerations. Resource scarcity is partly reflected where it increases the water supply costs; the indirect use and non-use values and external impacts are not incorporated in the water charges. Higher prices would increase the economic feasibility of water recycling and water harvesting and generate investment capital needed for the expansion of the water supply systems. Government subsidies may discourage efficient resource use. It is generally concluded that there is need for greater emphasis on re use of waste water and control of the demand by harmonizing fees or tariffs between urban and rural areas as far as non-essential use is concerned; and provide more incentives for large-scale consumers to increase water use efficiency and sustainability.; This study examined water use patterns in Botswana, and socioeconomic and political factors that influence sustainable water supply, and discusses water conservation and high sustainable levels of supply and demand; the market structure and its prices, costs, and subsidies; and sustainable water supplies. Data were obtained from unpublished workshop papers on integrated water resource management from seminars conducted in 1994, at the University of Botswana's Department of Environmental Science. Rainfall varied by location. Evaporation is about 4 times the average annual precipitation, which leads to continual water deficiency. Water supplies are based on ground and surface water in the ratio of 2:1. Groundwater is only partly renewable. Surface water is renewable only under the circumstance of sufficient rain and maintained storage capacity. Conservation of water is affected by the high rates of evaporation, few suitable dam sites, high temporal variability of runoff and large surface water storage capacity, the constraints of semi-arid environments, the normally critical water balance, rapid population growth and concentrations in urban areas, economic conditions, and the general increase in living conditions. The governments need to strengthen control over non-market water use and to provide sufficient incentives for efficient water use. Water prices should increase in order to reflect the total economic value, regardless of the political consequences. There are needs to protect water catchment areas and to clarify ownership of water resources. Control of demand should include prioritizing water consumption.
