“The Mid-Term Review (MTR) of National Development Plan 11 (NDP 11) comes at a critical juncture in the Botswana’s development. The momentum that has carried the country forward following many years of diamond-led growth is now slowing down on the backdrop of challenges in the global economic environment”, reads Mid-Term Review of the National Development Plan 11 Draft prepared by the Ministry Of Finance and Economic Development.
The Minister of Finance and Economic Development, Dr Thapelo Matsheka and his new permanent secretary Dr Wilfred Mandlebe are poised to give the country a new direction to deal with the challenges identified. According to the draft it is widely acknowledged that national social and economic transformation is necessary. “To this end, this MTR has come at an ideal time as it has assisted in identifying and analysing critical issues that need to be addressed, in order to transform Botswana’s economic and social development path going forward.”
NDP 11 is the first of three NDPs that will cover the Vision 2036 period, and hence the draft suggests that it is crucial in setting the growth and development path to be followed through to 2036, and achieving the Vision’s varied objectives for improving social and economic well-being in a sustainable manner.
“It also comes at a time when the world has embarked upon the 2030 Agenda for Sustainable Development, with its associated Sustainable Development Goals (SDGs). This MTR is therefore anchored on refining the course set out at the beginning of NDP 11 which was crafted along the pillars of Vision 2036 as well as the SDGs deliverables.”
According to the Ministry of Finance officials Botswana’s main challenge is that of subdued economic growth mainly as a result of impaired global demand for diamonds as its major export commodity. Recent average annual GDP growth rates measured over five-year periods have been around four (4) percent, far below the double-digit growth rates that Botswana enjoyed during the era of rapid diamond-led growth in the first 25 years after independence.
The draft review states that in order to sustain the growth momentum, government spending was increased even as diamond-led growth slowed down. “Such expenditure, was necessary to enhance transforming Botswana’s growth model to one driven by diversified, and export-led goods and services. Such a transformation is essential in unlocking the country’s growth potential while at the same time creating sustainable jobs. Linked to this, is the current shift in Government emphasis towards a knowledge-based economy that encompasses the production of many types of goods and services that can potentially support export-led growth.”
Finance officials posit that the transformation agenda needed to achieve faster economic growth requires that all sectors of the economy actively participate in economic activities. In so doing, it is important that emphasis be put on implementation efficiency and effectiveness. “This applies to both the choice and implementation of projects, and to operational aspects of public sector service delivery.
Public spending has been high in Botswana over many years, and while there have been some important achievements as a result, there has also been examples of not achieving value for money. Hence, structural changes in the economy associated with the move away from diamond-led growth means that the public sector will be expected to “do more with less”.”
Private sector must come to the party
There are also obligations on the private sector to deliver more and better. In many respects Botswana’s private sector is far too dependent upon government, notes the draft MTR. “It is up to the private sector to demonstrate more initiative, especially with regard to competitiveness and productivity that can underpin a pivot towards export markets rather than mainly servicing domestic demand. This requires a refocusing of domestic investment as well as attracting much higher levels of inward foreign direct investment.”
The MTR comes at a time when expectations amongst Batswana are high. “This is because the country has just successfully had a peaceful general election, and the 12th Parliament is convening with many new Members. In the road to the elections commitments to effective and impactful delivery were made, and it is essential that results are achieved that have a positive and widespread impact on the lives of Batswana. It is also essential that actions are taken that will, on balance, contribute to advancing the overall national transformation and socio-economic development in the longer term.”
The draft further narrates that currently the challenge of transformation is made more difficult by the external environment that in many respects has higher levels of uncertainty than at any time since the global financial crisis and recession a decade ago. Since that time, global growth has been volatile and
The need for Transformation
“The period of mineral-led growth that transformed Botswana from a low-income to an upper-middle income economy is now facing challenges. However, the search for a new, sustainable growth model continues. While the economy has become more diversified over the past two decades, this has not yet reached sustainable diversification levels. The economy is currently characterised by low annual growth rates and not enough opportunities for employment and income-generation for citizens are being created.
The economy also remains too dependent on government spending, and limited foreign direct investment (FDI), that yields a narrow export portfolio. Hence, the transformation to a sustainable post-mineral growth pattern remains a priority in the medium to long-term,” reads the MTR draft.
The draft notes that while the exact nature of sustainable post-mineral growth will evolve over time, a number of pre-requisites and desirable characteristics can be identified for the objectives of higher, more labour-intensive growth to be realised. These include: Increased openness and greater integration with regional and international markets for goods, services, labour and capital; Improved productivity and efficiency, leading to greater effectiveness and competitiveness; Shifting the drivers of growth towards exports of goods and services, and away from dependence on government and the small domestic market; Making use of Botswana’s high level of investment in education to support the transition to a knowledge-based economy; Improving economic opportunities for citizens; Reversing the decline in inflows FDI; and Improving the business environment to encourage diversified investment portfolios.
The Changing World of Diamonds
“Diamonds have long been central to Botswana’s economy as the largest contributor to; GDP, export earnings and government revenues. However, Botswana is now a mature diamond producer – having been doing so for almost 50 years – which means that diamonds are no longer a major driver of growth, although they continue to play an essential role in providing the foundation for the economy, government spending and the balance of payments. Domestically, the maturing of diamond mining poses challenges in that production is at a plateau, rather than growing, while costs of production are increasing as mines get older and deeper.
The global context for diamond mining is also changing dramatically. Since the global financial crisis (GFC) and recession of 2008-9, diamond prices have been volatile, and on a general downward trend, in contrast to the historical experience whereby diamond prices were expected to trend upwards. The relationship between rough and polished diamond prices has also changed, leading to squeezed margins and instability amongst mid-stream participants (diamond traders, cutters and polishers).
Other key changes involve the availability of finance, and the nature of the consumer and consumer tastes. Perhaps most significantly, the entry of low-cost lab-grown diamonds (LGDs) has transformed the supply-side, and undermined the rarity of (natural) diamonds. Finally, automation and artificial intelligence is affecting all stages of the diamond value chain, covering mining, extraction, sorting, valuing, and cutting and polishing. The diamond industry is going through a period of unprecedented change and disruption, which Botswana has to deal with, states the MTR draft.
The Directorate of Public Prosecutions (DPP)’s decision to reject and appeal the High Court’s verdict on a case involving High Court Judge, Dr Zein Kebonang has frustrated the Judicial Service Commission (JSC) and Judge Kebonang’s back to work discussions.
JSC and Kebonang have been in constant discussions over the latter’s return to work following a ruling by a High Court panel of judges clearing him of any wrong doing in the National Petroleum Fund criminal case filed by the DPP. However the finalization of the matter has been hanged on whether the DPP will appeal the matter or not – the prosecution body has since appealed.
Botswana Democratic Party (BDP) top brass has declined a request by Umbrella for Democratic Change (UDC) to negotiate the legal fees occasioned by 2019 general elections petition in which the latter disputed in court the outcome of the elections.
This publication is made aware that UDC Vice President Dumelang Saleshando was left with an egg on his face after the BDP big wigs, comprising of party Chairman Slumber Tsogwane and Secretary General Mpho Balopi rejected his plea.
“He was told that this is a legal matter and therefore their (UDC) lawyer should engage ours (BDP) for negotiations because it is way far from our jurisdiction,” BDP Head of Communications, Kagelelo Kentse, told this publication.
This spelt doom for the main opposition party and Saleshando who seems not to have confidence and that the UDC lawyers have the dexterity to negotiate these kind of matters. It is not clear whether Saleshando requested UDC lawyer Boingotlo Toteng to sit at the table with Bogopa Manewe, Tobedza and Co, who are representing the BDP to strike a deal as per the BDP top echelons suggested.
“From my understanding, the matter is dealt with politically as the two parties are negotiating how to resolve it, but by far nothing has come to me on the matter. So I believe they are still substantively engaging each other,” Toteng said briefly in an interview on Thursday.
UDC petitioners saddled with costs after mounting an unprecedented legal suit before the court to try and overturn BDP’s October 2019 victory. The participants in the legal matter involves 15 parliamentary candidates’ and nine councillors. The UDC petitioned the court and contested the outcome of the elections citing “irregularities in some of the constituencies”.
In a brief ruling in January 2020, Judge President Ian Kirby on behalf of a five-member panel said: “We have no jurisdiction to entertain these appeals. These appeals must be struck out each with costs including costs of counsel”. This was a second blow to the UDC in about a month after their 2019 appeals were dismissed by the High Court a day before Christmas Day.
This week BDP attorneys decided to attach UDC petitioners’ property in a bid to settle the debts. UDC President Duma Boko is among those that will see their property being attached with 14 of his party members. “We have attached some and we are on course. So far, Dr. Mpho Pheko (who contested Gaborone Central) and that of Dr, Micus Chimbombi (who contested Kgalagadi South) will have their assets being sold on the 5th of February 2021,” BDP attorney Basimane Bogopa said.
Asked whether they met with UDC lawyers to try solve the matter, Bogopa said no and added. “Remember we are trying to raise the client’s funds, so after these two others will follow. Right now we are just prioritising those from Court of Appeal, as soon as the high court is done with taxation we will attach.”
Saleshando, when contacted about the outcomes of the meeting with the BDP, told WeekendPost that: “It would not be proper and procedural for me to tell you about the meeting outcomes before I share with UDC National Executive Committee (NEC), so I will have to brief them first.”
UDC NEC will meet on the 20th of next month to deal with a number of thorny issues including settling the legal fees. Negotiations with other opposition parties- Alliance for Progressives and Botswana Patriotic Front (BPF) are also on the agenda.
Currently, UDC has raised P44 238 of the P565 000 needed to cover bills from the Court of Appeal (CoA). This is the amount in a UDC trust account which is paltry funds equating 7.8 per cent of the overall required money. In the past despite the petitioners maintaining that there was promise to assist them to settle legal fees, UDC Spokesperson, Moeti Mohwasa then said the party has never agreed in no way to help them.
“We have just been put in debt by someone,” one of the petitioners told this publication in the past. “President’s (Duma Boko) message was clear at the beginning that money has been sourced somewhere to help with the whole process but now we are here there is nothing and we are just running around trying to make ends meet and pay,” added the petitioner in an interview UDC NEC has in December last year directed all the 57 constituencies to each raise a minimum of P10, 000. The funds will be used to settle debts that are currently engulfing the petitioners with Sheriffs, who are already hovering around ready to attach their assets.
The petitioners, despite the party intervention, have every right to worry. “This is so because ‘the deadline for this initiative (P10, 000 per constituency) is the end of the first quarter of this year (2021),” a period in which the sheriffs would have long auctioned the properties.
President of the Umbrella for Democratic Change (UDC) Duma Boko’s alliance with former President Lt Gen Ian Khama continues to unsettle some quarters within the opposition collective, who believe the duo, if not managed, will once again result in an unsuccessful bid for government in 2024.
While Khama has denied that he has undeclared preference to have Boko remaining as leader of UDC, many believe that the two have a common programme, while other opposition leaders remain on the side-lines.