Following months of intensified US –China Trade war which eroded business sentiments across the globe resulting in uncertainties, and subdued market in manufacturing and diamond industries amongst others, this week the world largest economies put pen to phase one of a historic trade agreement that is intended to put an end to the year-long geo political tension.
Representing the world‘s largest economy Donald Trump, President of the United States (POTUS), signed the landmark trade agreement alongside China’s Vice Premier, Liu He, representing the world most populated and second most powerful economy. According to American media houses, the agreement is a preliminary phase of a broader deal that President Trump says may come in as many as three sections. "Together, we are righting the wrongs of the past; it doesn't get any bigger than this," Trump said in a pomp-filled signing ceremony at the White House in Washington DC on Wednesday.
The US- China trade war was fueled by decades of complaints that Beijing was manipulating its currency and stealing trade secrets from American firms. This then was met by United State President Donald Trump putting up tariffs policy which White House said was to encourage US consumers to buy American by making imported goods more expensive.
So far, the US has imposed tariffs on more than $360 billion of Chinese goods, and China has retaliated with tariffs on more than $110 billion of US products. Washington delivered three rounds of tariffs last year, and a fourth one in September. The recent tariff punch by United States was 15 % duty on Chinese imports from meat to musical instruments China then hit back with tariffs ranging from 5% to 25% on US goods. Its latest tariff strike included a 5% levy on US crude oil, the first time fuel has been hit in the trade battle.
After more than two years of this rising tension, the two countries have signed a deal aimed at calming trade frictions. Economists say the agreement has been hard-fought, but it is unclear how much economic relief from their trade war it will offer. Experts say tariffs in most cases at a lower rate will remain in place. Analysts say it's unlikely that the deal will produce gains sufficient to outweigh the losses already suffered.
DOMESTIC EFFECT OF THE TRADE WAR
During this US-China trade war, Africa‘s 3rd world countries, frontier markets, emerging economies, and lower to middle income countries were the most hit economies, standing in the mix, vulnerable to the net effect of negative business sentiment and uncertainties as the leading economies went throat to throat.
Economic uncertainty generated by this unstable geopolitical climate led to widespread shock and a global downturn in the diamond industry during the first half of 2019. These have also fostered a heightened sense of caution among the banks that finance the trade, as well as diamond brokers and consumers of luxury goods.
The global diamond industry in the first half of 2019 faced a variety of challenges leading to widespread uncertainty and declining commerce across all segments. The uncertainty brought about by increased trade barriers and geopolitical risks weighed on business sentiment and activity.
Botswana in particular is a middle income country largely dependent on the mining sector as its economic nucleus, by in large the diamond industry. The sector accounts for more than 30 % of the country‘s GDP, it is the largest foreign income earner, largest private sector employer and second largest source of direct business for the private sector after Government.
According to Bank of Botswana (BoB) during this tough year Real Gross Domestic Product (GDP) have grown by 3.9% in the twelve months to June 2019, compared to a faster expansion of 4.9% in the corresponding period in 2018. The lower rate of increase in output is mainly attributable to a deceleration in growth of the mining sector. Growth in non-mining GDP also slowed in the review period. Mining output grew by 1.4% in the year to June 2019, compared to an increase of 5.6% in the corresponding period in 2018.
Due to by in large this uncertainty Botswana ‘s partner in diamond mining De Beers Group sold less rough diamonds during the year. Sales went down by over P14 billion. Botswana Government owns 15 % of De Beers Group, the mining behemoth is 60 % fed by local mining giant Debswana, a 50-50, 50 year old partnership between the two. Ministry of Finance & Economic Development noted in the Budget Strategy paper for the coming financial year that Botswana’s fiscal position faces potential headwinds.
“Weak diamond sales pose downside risks to mineral revenues, which remain low following the decision by Debswana to finance the Cut 3 and Cut 9 projects from the dividends. Furthermore, risks to the revenue outlook take into account the continued weak market for rough diamonds which has affected sales through De Beers Global Sightholder Sales.”
However some observers say the first deal between Washinton and Beijin means nothing .According to CNN economic experts the signing of phase one deal doesn't mean simmering conflicts and uncertainty over trade won't drag down the global economy this year. “Tensions between the world's two biggest economies are likely to persist in 2020 as Beijing and Washington enter a second round of trade talks that are expected to be more difficult than the "phase one" process that culminated in a deal Wednesday in Washington”.
While it takes a lot to penetrate and thrive in the male dominated political space in Botswana, Block 3 Ward councillor Motamma Horatius, is one of the few females defying the odds.
Driven by passion, Horatius has always worn many hats and today she has become one of the few women who are thriving in the political space in Botswana. Prior to pursuing politics, she was an active participated in the creative space.
Horatius, a beauty queen, notably famous for her reign as Miss World Tourism Botswana represented Botswana in a television show famously known as Big Brother Africa. During her stay in the house, she got termed darling of the continent for an outstanding performance that promoted unity, humility and culture.
After serving for some time in public space, and making a name for herself as well as serving as a brand ambassador she decided to step in a career that will forever challenge her. This was after she had travelled the world and demonstrated her unique leadership skills and brilliance.
“I stopped and asked myself why am I not incorporating this brilliance back home. And wherever you go worldwide Botswana with all her faults is a beacon of hope in everything. And even successful countries came here to benchmark and implemented our policies and are flourishing such as Rwanda. So I decided to join active politics and go straight to the ruling party to add a youthful feel to an already existing force and help modernise it to serve better not from afar but from within,” she clarified.
“So my ample experience in civic leadership across countries around the world catapulted me to join active politics because I wondered, if I can do as much as an individual even across nations, how much can I do whilst in office, locally. And I chose to start from the ground up, in order to avoid leaving the locals behind.”
The stern and tenacious young leader, currently sit as the Chairperson of Finance Committee at Gaborone City Council, and also chairs Performance Monitoring Committee.
While a typical girl would dream of becoming either a nurse or choose a ‘girl’ orientated deemed career, she had a heart for politics from a very young age. By the time she left the creative space, she had already made a name for herself, that she needed no introduction.
“I had to acknowledge first that I am a woman, and being a woman means you have to work 200 percent more than your male counterparts. So it took sleeplessness nights, and a massive amount of working smart to win legitimately,” she said.
She acknowledges that she faced a lot of challenges during the 2019 elections which she had to overcome through the assistance of her loved ones and family.
“Politics is expensive but I managed by God’s grace, family, friends, acquaintances and good Samaritans but my mind helped. I am a very good planner when it comes to execution,” she said.
“Another hurdle is, being a young woman, I had conceived during the time of primary elections; so campaigning whilst expectant, managing your emotions through betrayals, insults, stress, house-to-house then giving birth and having to hit the ground in less than two weeks having given birth via C-section, was a hurdle I overcame by God’s mercy and I am thankful to my family for helping me with the kids because politics means a lot of time away from home.”
“Another hurdle was to portray an all rounded culturally grounded Motswana woman soft but yet stern, respectful but can articulate issues well. Because even though we are civilized our society still upholds unwritten yet practiced values of what a woman is and what a man is, and if you defy societal expectations, it judges you harshly. But thankfully I remained focused on who I was and didn’t try alternate anything When I lost some of the original members of my campaign team. The pain was deep. But I wiped my tears. Soldiered on, and God increased twice the initial number.”
At some point she had to face demeaning words from other male contestants, but the best to do at the time was to shun negativity and stay focused. Male intimidation never tugged her down.
“My experience with 2019 elections was rather inclined to learning as it was my first time running for office as a politician, so I wanted to see if really hard work has results because I always hear stories of how people are bought,” she said.
“So since I was not buying anyone, I was on a learning curve to test my hard work style of delivery against what is believed out there. So it was exciting and again I say it was a learning curve as most NGOs fighting to increase women participation in politics were continuously training us.’
Despite everything she feels women political participation in Botswana is still low. She has pleaded with the media to cover them more often as she believes maybe it will help more women to run for office.
Botswana has few women in parliament, giving men dominance in policy decisions. In a 63-seat parliament, Botswana has only seven female MPs, four of them being specially elected lawmakers.
According to the 2019 edition of the biennial Inter-Parliamentary Union (IPU) Map of Women in Politics. Among the top African countries with a high percentage of women in ministerial positions are Rwanda (51.9%), South Africa (48.6%), Ethiopia (47.6%), Seychelles (45.5%), Uganda (36.7%) and Mali (34.4%).
The lowest percentage in Africa was in Morocco (5.6%), which has only one female minister in a cabinet of 18.
Other countries with fewer than 10% women ministers include Nigeria (8%), Mauritius (8.7%) and Sudan (9.5%).Other African countries with high percentages of women MPs include Namibia (46.2%), South Africa (42.7%) and Senegal (41.8%), according to the report.
Though a slight increase, Botswana is still lagging behind when it comes to women political participation.
According to a report made by IEC for the 2019 elections, there is 11.1% women representation in parliament. There has been a 1.6% slight increase from the 2019 election compared to the 2014 elections.
According to United Nations, there are two main obstacles that prevent women from participating fully in political life.
These are structural barriers, whereby discriminatory laws and institutions still limit women’s ability to run for office, and capacity gaps, which occur when women are less likely than men to have the education, contacts and resources needed to become effective leaders.
As it stands though, Botswana has continued to recognize gender equality as central to socio-economic, political and cultural development through its National Vision 2036.
Following the adoption of the National Policy on Gender and Development in 2015, the National Gender Commission was established in September 2016, to monitor implementation of the policy.
Government ministries and departments have moved to cut expenditure in the last quarter of financial year in order to survive the economic hardship occasioned by the covid-19 pandemic. Since the outbreak, Government and the private sector have been hard hit financially due to limited economic activity brought about by government response to fighting the pandemic.
In an urgent savingram by the Permanent Secretary in the Ministry of Local Government and Rural Development, Molefi Keaja addressed to all council secretaries and town clerks, the government informs that it is facing unprecedented budgetary challenges for Financial Year 2020/2021.
“This has necessitated measures to be put in place to conserve cash and ensure that government is able to honour its financial obligations in the remaining (3) months of the financial year,” said the savingram dated 24 December 2020.
The Government has cut all travel by Ministries, Departments and Agencies (MDAs) including State owned entities (SOEs) and Local Authorities until the next financial year in April 2021. It has also taken a decision that all meetings, interviews, seminars, workshops, conferences, retreats, annual ceremonies and hospitality events should be conducted virtually, which save on the cost of securing venues, conference facilities and meals/refreshments.
“No replenishment of refreshments for the Executive Cadre (E2 salary scale and above) until the end of the financial year,” Keaja directed. Last year government also resolved that due to the financial effects of Covid-19 the government will no longer recruit for any jobs during the 2020/2021 financial year.
The Cabinet directed that the 2020/2021 provision for vacancies be withdrawn from Ministries, Departments and Agencies recurrent budgets to cater for supplementary estimates. According to the saving gram then by the Directorate on Public Service Management (DPSM) said the country faces fiscal challenges which have been accentuated by the emergence and the spread of the COVID-19 pandemic.
Amongst key ministries and departments affected were the Botswana Defence Force, National Strategy Office, Directorate of Intelligence and Security (DIS), Commissioner of Police, Commissioner of Prisons, Clerk of National Assembly and the Directorate on Corruption & Economic Crime (DCEC).
It further deliberated that all various institutions that had begun recruitment for existing vacant positions be frozen for the remaining period of the 2020/2021 financial year. “Since funds for the vacancies will only be recruited in the next financial year 2020/20121, Ministries, Department and Agencies are advised to discontinue recruitment into such vacancies until 1st April 2021. Those who are already at an advanced stage of recruitment process are advised to withhold appointments until further notice.”
The Director of Directorate on Public Service Management (DPSM), Goitseone Mosalakatane, told the parliamentary Public Accounts Committee (PAC) in September that despite the high unemployment rate, they cannot hire for the posts because part of the funds have been withdrawn to fight the Coronavirus.
With just a few days into the New Year, Covid-19 seems to be taking its toll and its effects will be felt vastly in the long run. Countries worldwide, including Botswana are injecting in millions of money in the fight against the deadly virus therefore placing immense uncertainty on country’s economy.
When delivering his speech at last year’s State of Nation Address President Mokgweetsi Masisi said during 2020, the domestic economy was expected to contract by 8.9 percent indicating that this is attributed to an expected sharp decline in major sectors such as mining, (minus 24.5 percent); trade, hotels and restaurants (minus 27.4 percent); construction (minus 6 percent); manufacturing (minus 3.9 percent); and transport and communications (minus 2.5 percent).
However, he assured that the economy is expected to rebound during 2021, with overall growth projected at 7.7 percent. The anticipated recovery will be driven by a rebound in growth of some major sectors such as mining (14.4 percent), trade, hotels and restaurants (18.8 percent), and transport and communications (4.2 percent).
Furthermore, Masisi pointed out that the recovery will also be supported by the Economic Recovery and Transformation Plan currently being implemented by Government. “It is critical to note that these projections are dependent on, among others, the duration of the COVID-19 pandemic and related restrictions.
These containment measures have the effect of reducing spending by firms and households and causing supply-chain disruptions. Beyond this, the recovery phase will be influenced by confidence effects on households and businesses; sectoral transformation and changes in work patterns; as well as prospects for the recovery of global financial markets and commodity prices.”
Emphasising this, he explained that despite the challenges of COVID-19 there still remains the delicate balance of opening the economy whilst containing the disease burden. “Inflation according to the latest data from Statistics Botswana, inflation fell significantly from 2.2 percent in September 2019 to 1.8 percent in September 2020, remaining below the lower bound of the Bank of Botswana’s medium-term objective range of 3 to 6 percent,” he said.
The significant decline in inflation mainly reflects the downward adjustment in fuel prices in June 2020. However, inflation may rise above the current forecasts if the international commodity prices increase beyond current projections and in the event of upward price pressures occasioned by supply constraints due to travel restrictions and lockdowns.
The Botswana Democratic Party (BDP) last year had to cancel its elective congress due to the strict measures that had to be put in place due to Covid-19 pandemic outbreak.
Two other party events Women’s Wing Congress including the much anticipated victorious election celebration were also postponed due to the pandemic as gatherings were cancelled indefinitely. However the BDP is adamant that the party will be able to hold its National Congress and all other events that had been frozen this year.
Speaking to this publication chairman of BDP Communication & International Relations Sub-Committee Kagelelo Kentse said that the party was readying itself for the congress with the main objective being to review resolutions that were taken at their 38th National Congress in Mochudi in 2019. Emphasising this, Kentse said it was commendable that most of the resolutions taken in 2019 have by far been fulfilled.
Moreover, he said it would mean a lot for the party to be able to meet at the congress, this he said would give them the opportunity to introspect and reflect with regards to their manifesto. In 2019 the BDP made about eleven resolutions of which five of these were resolved and gazetted. The abridged resolutions were that the amendment of the law to allow agricultural land owners to use up to 50 percent of their land for non-core purposes, to amend the law to cancel transfer duty on property transferred between the spouses.
President Masisi also passed a law to allow married couples to be independently allocated land and increase threshold for non-payment of transfer on property acquired from P250k to P750k. On the resolution in the tourism sector, Kentse said efforts are very advanced to have local play a part. He said there is ongoing work with the Ministry of Lands on concessions that will be allocated to citizens.
According to the BDP communications chair the Ministry of Tourism has availed more opportunities in dams for tourism thus far, having already issued expression of interest for Letsibogo, Dikgatlhong, and Gaborone dams. Citizens are said to have applied for tenders which are currently under evaluation. There are about 45 campsites set aside for citizens in game reserves and forest reserves for tourism.
The resolution on the declaration of assets and liabilities law which was passed and amended this year, was supported by all legislators including those from opposition. Emphasising this he explained that contentions were on issues to do with valuations, and leaders have started declaring.
With the Congress comprising of the elective congress, the BDP is yet to embark on it an objective Kentse said is on their to do list this year even though the calendar of events has not yet been made. The elective congress has aroused interest, especially the Secretary General position which has attracted a number of participants of which observers believe will accord the incumbent, Mpho Balopi, the current secretary general, the opportunity to buy time if at all he will seek re-election in the position.