African countries are gradually relaxing their visa requirements and easing up their issuing processes in a bid to foster travel within the continent and enhance intra regional trade; this is according to an observation made by the African Development Bank.
Over the years it has been extremely difficult for Africans to travel within Africa than it was for non Africans to entre and move around the continent, defying African Union regional integration efforts, however recently many African countries have been opening up their immigration laws and easing up travel for fellow African travelers. The Africa Development Bank’s Visa Openness Index for 2019 has found out that for the first time Africans have travel access to 51% of the continent and now only need visas to travel to fewer than half of other African countries.
Of the 51% of countries Africans can access more freely, 26% offer visas on arrival while 25% do not require prior visas from African travelers. Much of the progress is down to several countries on the continent opting for more liberal visa requirements from African travelers. Ethiopia announced a more liberal visa on arrival policy for African travelers last October and jumped a record 32 places on the Visa Openness index. Senegal, Angola, Ghana, Benin and Gabon are also credited with taking up more open visa policies for Africans over the past year.
Overall, 28% of African countries improved their visa openness scores in the period. There are already signs that liberalization of visa regimes in Africa will continue over the next year as well. Nigeria, Africa’s largest economy, has already committed to begin issuing visas on arrival for all African nationals this year. Seychelles an island in the Indian Ocean leads the continent with the most liberal and open Visa requirement system in place. Benin and Senegal come second and third respectfully.
Botswana lagging behind
In the case of Botswana, the landlocked country has declined in the rankings, moving down a spot from number 30 in 2018 to 31 in 2019. Botswana has been cited under the “Countries looking to open up” rank. In an effort to improve the ease of doing business in the country, Botswana announced in 2018 that it will offer Tourist Visa at point of entry effective 24th November 2018.
This announcement was made by President Mokgweetsi Masisi at the High Level Consultative Conference. Eyed to promote the tourism sector and boost the business environment, government announced this move to liberalize its visa regime by offering tourist visas on arrival. The new visa-on- arrival policy is anticipated to make travel to Botswana easier for African travelers.
Africa Air Travel
While easing visa rules is one thing, smoother air travel for travelers across the continent is quite another. Yet, the African Union has also recorded strong progress in this regard with the launch of the Single Air Transport Market initiative to ensure cheaper and more regular direct flights between African countries. The continent has been advocating and lobbying for an eased up intra continent travel and the free skies for various take homes. The benefits of a continent with more open borders for African travelers’ ranges from increased intra-Africa trade to boosting local tourism industries.
There’s already evidence of what’s possible as a 2017 report by United Nations Conference on Trade and Development showed Africans accounted for 40% of international tourist arrivals on the continent despite erstwhile visa and travel complications. However experts say despite progress recorded, there is still a long way to go exemplified by Equatorial Guinea, the tiny oil-rich state which ranks low on the Visa Openness index as it still requires pre-acquired visas from all Africans.
African Development Bank Vice President for Regional Development, Intergration and Business Delivery Dr. Khaled F. Sherif observed in the index that in 2019, a record 47 countries improved or maintained their visa openness scores, which on average are rising year-on-year. Today, African travelers no longer need a visa to travel to a quarter of other African countries, whereas visa-free travel was only possible to a fifth of the continent in 2016.
While the top 10 and top 20 continue to champion open visa policies, more countries in all regions are following this model, including most recently Africa’s upper-middle-income countries. To streamline the travelers’ experience, 21 countries Africa-wide now provide eVisa platforms boosting transparency and accessibility.
“Now, as Africa paves a pathway to prosperity with the African Continental Free Trade Area, we are all responsible for accelerating its progress. Integration depends on investments and interconnectivity, and it is imperative that Africa’s population moves with greater freedom,” he said.
African Development Bank President Akinwumi A. Adesina says Regional integration is crucial for Africa’s accelerated development. “We must connect landlocked countries to ports, we must allow free movement of people , Investors must be able to invest beyond the borders of countries and Africa must trade more with itself, apart and divided, Africa is weakened, Together and united, Africa will be unstoppable,” he said.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”