The Botswana Energy Regulatory Authority (BERA) Regulations of 2024 effectively shut the door on non-citizen entities importing 90% of petroleum, to reserve it for Botswana Oil Limited, for national security.
The effect of this move was that the Foreign Direct Investment (FDI) in the energy sector declined. The sector experienced market shrinkage with UN Conference on Trade and Development (UNCTAD) and IMF data recording inflows of US$ 361m as at the end of Q3 of 2025 compared to US$ 708m that was invested in 2022. This has the effect of deterring renewable energy investors, who had reportedly been eyeing investments in solar and green hydrogen.
Generally, governments in developing countries find themselves under pressure to implement protectionist laws. Naturally, this reduces trade liberalization and to some extent limits consumer options. On the other hand, local producers and business owners would be stifled by the free-market trade if there is no protectionism at a policy level. Historically, protectionist laws as gauged against bilateral trade agreements, have culminated in retaliatory laws and inflation.
Because of inherent inefficiencies in controlling market factors, there is always an imbalance which threatens bilateral and multilateral treaties governing industries in international trade. There is always a balancing exercise between locals in industry as against the interest of FDI.
The proposal to address this it to open imports by increasing the regulated market of the foreign-owned firms, and ease the regulatory framework to remove barriers to entry and to promote the ease of doing business, making building on projects like the World Bank’s US$ 88m project a staple on which energy security can be built. This can be done through Public- Private Partnerships (with a quota for local companies). The effect will be improvement of blended finance for green energy projects.
