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Africa’s debt sustainability: cause for concern?

MARCUS COURAGE

Many African countries were caught in a debt trap at the turn of the century. A number of initiatives, most notably the Highly Indebted Poor Countries Initiative (HIPC), resulted in constructive but challenging negotiations and the debts of African nations being written off by the Paris Club of lenders in 2007. With the slate rubbed clean, African governments were free to borrow again. Today, eight countries are once more at risk of falling into a debt trap. Their chances of negotiating debt relief are grim.

Demographics and democracy

In the face of low domestic savings rates, it’s understandable that governments would want to borrow to invest in critical infrastructure and economic diversification. But in most cases, loans have been used to plug fiscal deficits and finance short-term political objectives. Ghana for example, used the proceeds of a debt raise to double some civil servants’ salaries.

In general, borrowing has failed to generate the revenues needed to cover increased levels of debt service, leading to a vicious cycle of rollover financing.  In a small number of cases loans have been embezzled. The case of Mozambique and the $2.4bn ‘tuna bonds’ scandal is perhaps the most brazen. On 17th October 2019, a former Credit Suisse banker confessed to a jury in Brooklyn that he had pocketed $45mn from the deal.

Rapid population growth in Africa (26 nations expect their populations to double by 2050) places pressure on governments to raise finance to serve expanding populations, while the spread of democracy encourages short-termism and myopia that doesn’t look beyond the next election cycle.  After all, politicians don’t win elections with promises to raise taxes and reduce public service spending.

The rise of commercial lenders

In the aftermath of the global financial crisis and the Eurozone crisis in 2008,  commercial lenders such as hedge funds and banks, and even high net worth individuals, moved into emerging and frontier markets in search of higher yields (African interest rates were higher than other regions, while rates in the West were at historical lows). African debt became a hot commodity and African governments were inundated with offers from banks and brokers to borrow on the private market.

Suddenly African governments had access to easy credit again, albeit at rates of interest that caused debt servicing costs to increase rapidly.  According to the Brookings Institute,’’ interest costs as a share of government revenues doubled from 5% in 2012 to 10% in 2017, its highest level since the early 2000s.’’  Today interest costs account for 10% of government revenues in seventeen countries, compared with six countries in 2012. This increase has been particularly large in Angola, Nigeria, Ghana and Burundi. Rising by almost 20%.

African governments raised more than $25bn from Eurobonds in 2018 alone, the third consecutive annual record. The practice continues to this day. Last week the Kenyan government announced its intention to borrow $4.1bn from external lenders (a total of 44 loan agreements), having been granted parliamentary approval for an increase in the country’s debt ceiling to $85.7bn. Parliament’s approval has opened the door for another $38bn on top of existing debt of $56bn (in June) and takes the nation’s debt to unprecedented levels.
Average external debt payments on the continent doubled between 2015-2017, from 5.9% to 11.8%. Much of this is commercial borrowing, accounting for 32% of total debt, and 55% of interest payments.

Table 1: Eurobond yields
Issuer
Size
Maturity
Yield (mid)
Angola
USD 1.75 billion
2028
7.72%
Benin
EUR 500 million
2026
5.15%
Ethiopia
USD 1 billion
2024
5.69%
Gabon
USD 1.5 billion
2025
6.95%
Ghana
USD 1 billion
2029
7.72%
Cote d’Ivoire
USD 571.5 million
2028
5.9%
Kenya
USD 1 billion
2028
6.45%
Nigeria
USD 1.25 billion
2030
7.1%
Cameroon
USD 750 million
2025
7.55%
Namibia
USD 750 million
2025
5.09%
Rwanda
USD 400 million
2023
4.16%

New colonialism

A ‘new colonialism’ is a term that was coined at the start of the century to reflect China’s growing influence in Africa and the proliferation of loan agreements underwritten by Chinese state-owned banks to African governments. When presenting the United States’ ‘New Africa Strategy’ in December 2018, Ambassador John Bolton said: ‘’China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.’’ Readers of the Wall Street Journal or New York Times could be forgiven for thinking that Chinese lending to Africa was responsible for the current levels of debt in Africa. It is not.

It’s easy to overestimate Chinese lending to Africa. $140bn was loaned to African nations by Chinese banks between 2000 to 2017.  While the sum is large, it accounts for only 20% of all debts owed by African nations to foreign lenders today. Nor are the terms of China’s loans predatory. The China Export Import Bank (Exim Bank), which is responsible for about 70% of Chinese loans in Africa lends at a fixed average rate of 2%.  Moreover, of the eight African nations that are categorized as being under debt distress, the proportion attributable to Chinese debt is negligible. 

Debt Distress

African debt levels have risen steadily from 38% of GDP to 59% of GDP between 2012-2018 (Debt to GDP is a measure of what a country owes, relative to its ability to pay).  Seven African countries today have a ratio above 80% – Eritrea, Cabo Verde, Mozambique, Angola, Zambia, Egypt and the Gambia. That’s 188 million people served by a public sector that in many cases is ill-equipped to manage these funds efficiently and productively.

Table 2: Public debt above 80% of GDP

Countries with Debt-to-GDP level above 80%
Debt as % of GDP in 2019 (IMF)
Eritrea
165.1
Cabo Verde
123.5
Mozambique
108.8
Angola
95
Zambia
91.6
Egypt
84.9
Gambia, The
80.9

In the past, when debt crises occurred and nations were facing default, they could negotiate with sovereign creditors. Today, nations must negotiate with a more diffuse creditor base comprising commercial lenders and vulture funds who buy debt on secondary markets, often at deep discounts with the intent of suing the debtor for full recovery. Vulture funds have averaged recovery rates of about 3 to 20 times their investment, equivalent to returns of (net legal fees) 300%-2000%.

Their practice is simple: purchase distressed debt at deep discounts, refuse to participate in restructuring, and pursue full value of the debt often at face value plus interest. The African Development Bank (AfDB) cites one recent case against Zambia, where a vulture fund, having bought a debt for US$3 million, sued Zambia for US$55 million and was awarded US$ 15.5 million.

Table 3: Debt as a proportion of GDP

Debt as % of GDP in 2019 (IMF)
Eritrea
165.1
Cabo Verde
123.5
Mozambique
108.8
Angola
95
Zambia
91.6
Egypt
84.9
Gambia, The
80.9
Republic of Congo
78.5
Mauritania
78.5
Sao Tome and Principe
77.2
Tunisia
74.4
Togo
72.6
Guinea-Bissau
69.2
Mauritius
68.7
Morocco
65.3
Malawi
65.1
Sierra Leone
64.5
Ghana
63.8
Burundi
63.5
Senegal
63.3
Kenya
61.6
South Africa
59.9
Ethiopia
59.1
Sudan
59.1
Gabon
56.4
Niger
55.8
Seychelles
53.8
Côte d'Ivoire
52.7

Risk of contagion

The backdrop of dimming economic prospects off the continent provides aggravated cause for concern on the African continent. In its half yearly update published in October 2019 the IMF said that almost 40% of the corporate debt in eight leading industrialised countries – the US, China, Japan, Germany, Britain, France, Italy and Spain – would be impossible to service if there was a downturn half as serious as that of a decade ago. 


The World Bank’s Chief Economist for Africa points to the real fragility of those African nations who have seen an increase in debt by more than 20% points over six years, in the event of a global downturn. Commodity price slumps, a natural disaster or conflict would have similar devastating impacts. Renaissance Capital, an investment bank focused on emerging and frontier markets, worries that a large spike of $12 billion in repayments is due by African governments in 2024—mostly from smaller oil-importing countries. This would be hard to roll over if the global economy in 2024 is in bad shape.

Public debt dynamics

The US has a 77% public debt to GDP ratio, while France had a ratio of 98.4% at the end of 2018.  In cases where governments have the capacity to bear high levels of debt, there's little reason for concern. But research conducted by the Brookings Institute concludes that ‘’public debt dynamics in many countries in sub-Saharan Africa are now working against their stability and growth.’’ They found that ‘the quality of policies and institutions has deteriorated or not improved in most African countries,’ with the biggest deterioration occurring in countries that have witnessed the highest increases in public debt. This should concern us.

What next?

The IMF is working to address the risk of default in nations facing debt distress. Under its IDA programme it has established a Sustainable Development Finance Policy (SDFP). Under this initiative they will engage with the non-Paris Club — the so-called emerging donors – to help restructure African nations’ debts where possible, and to ensure they remain eligible beneficiaries of IDA funding.

While you will never hear them speak of conditionalities, the IMF intends to use the next two years to push for measurable progress in the policy actions needed for debt sustainability. In instances where there is no measurable progress, they will reduce the allocation for the third year. Constructive engagement between the IMF and the governments of Ghana and Gabon have resulted in measures to successfully reduce their debt burdens in recent years, while the merry dance that has played out between the Government of Zambia and the IMF has failed to achieve the same results. Zambia’s external debt stock today stands at more than $19billion (a debt to GDP of 74%). It stood at just $3bn in 2008. 

Structural and governance constraints

The fact that nations face the prospect of another debt crisis less than two decades after HIPC debt relief was granted, is a reminder that structural and governance issues still pose a challenge on the continent. Domestic resource mobilization, through efficient tax revenue collection and domestic financial markets, forms an important part of the solution. 

Combating illicit financial flows and strengthening natural resource governance, is important too. And finally, accountability. We have to address the fact that governments can borrow billions of dollars on the Eurobond market with little or no accountability regarding the use of the proceeds, as Andrew Roche points out in his article published on 17th October 2019 in the FT.

So, what needs to happen next?

Firstly, African governments must stop denying that a problem exists.  Secondly, when issuing bonds, they should present full prospectuses, identifying clearly how the funds will be spent. The ‘don’t ask, don’t tell’ approach cited by Roche which characterises most bond issuances is irresponsible, and in the case of the Mozambican example I cited above, damn right criminal.  All revenue raises should be subjected to parliamentary scrutiny and to ESG performance principles, to ensure that the proceeds are invested in areas that generate improved performance at low risk and conform with environmental and social impact criteria. Such scrutiny should be rewarded with improved risk ratings for the nation.

For their part, issuers should be obligated to reveal the full costs of a transaction, including the costs of the underlying goods (in the case of Mozambique, the real cost of the tuna fishing fleet, and the cost of the inducements also!). Nor is the full cost limited to items appearing on the balance sheet. As Sylma Du Plessis, partner at Alkebulan reminds us, ‘many deals are structured in such a way that commitments are given off the balance sheet, whether through direct government guarantees or indirect take or pay offtake arrangements, such as power purchase agreements that place commitments directly or indirectly on the State (as in the case of Eskom in South Africa).

The role of the World Bank (IFC and MIGA) in structuring and insuring credit must improve also. These institutions often provide credit support to banks where most of the value ends up with the banks, not the country itself – in particular with difficult-to-price derivatives that get guaranteed by insurance companies and MIGA and are not always priced appropriately based on market prices, leading to significant mark to market gains for banks and limiting the credit lines available to countries.  

And finally, industry should take note  that high  levels of debt distress leads governments to  introduce new taxes (in 2019 the Zambian government has attempted to introduce a new sales tax),  or to pursue arbitrary and discriminatory enforcement of regulations aimed at  raising the funds they need to bridge the deficit. In such instances, companies would be wise to anticipate regulatory shifts and to work with industry peers to proactively raise and resolve concerns, while presenting feasible alternatives. Saying nothing and doing nothing is an act of sabotage.

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Opinions

Elected officials should guard against personal interest

23rd September 2020

Parliament was this week once again seized with matters that concern them and borders on conflict of interest and abuse of privilege.

The two matters are; review of MPs benefits as well as President Mokgweetsi Masisi’s participation in the bidding for Banyana Farms. For the latter, it should not come as a surprise that President Masisi succeeded in bid.

The President’s business interests have also been in the forefront. While President Masisi is entitled as a citizen to participate in a various businesses in the country or abroad, it is morally deficient for him to participate in a bidding process that is handled by the government he leads. By the virtue of his presidency, Masisi is the head of government and head of State.

Not long ago, former President Festus Mogae suggested that elected officials should consider using blind trust to manage their business interests once they are elected to public office. Though blind trusts are expensive, they are the best way of ensuring confidence in those that serve in public office.

A blind trust is a trust established by the owner (or trustor) giving another party (the trustee) full control of the trust. Blind trusts are often established in situations where individuals want to avoid conflicts of interest between their employment and investments.

The trustee has full discretion over the assets and investments while being charged with managing the assets and any income generated in the trust.

The trustor can terminate the trust, but otherwise exercises no control over the actions taken within the trust and receives no reports from the trustees while the blind trust is in force.

Botswana Democratic Party (BDP) Secretary General, Mpho Balopi, has defended President Masisi’s participation in business and in the Banyana Farms bidding. His contention is that, the practise even obtained during the administration of previous presidents.

The President is the most influential figure in the country. His role is representative and he enjoys a plethora of privileges. He is not an ordinary citizen. The President should therefore be mindful of this fact.

We should as a nation continue to thrive for improvement of our laws with the viewing of enhancing good governance. We should accept perpetuation of certain practices on the bases that they are a norm. MPs are custodians of good governance and they should measure up to the demands of their responsibility.

Parliament should not be spared for its role in countenancing these developments. Parliament is charged with the mandate of making laws and providing oversight, but for them to make laws that are meant solely for their benefits as MPs is unethical and from a governance point of view, wrong.

There have been debates in parliament, some dating from past years, about the benefits of MPs including pension benefits. It is of course self-serving for MPs to be deliberating on their compensation and other benefits.

In the past, we have also contended that MPs are not the right people to discuss their own compensation and there has to be Special Committee set for the purpose. This is a practice in advanced democracies.

By suggesting this, we are not suggesting that MP benefits are in anyway lucrative, but we are saying, an independent body may figure out the best way of handling such issues, and even offer MPs better benefits.

In the United Kingdom for example; since 2009 following a scandal relating to abuse of office, set-up Independent Parliamentary Standards Authority (IPSA)

IPSA is responsible for: setting the level of and paying MPs’ annual salaries; paying the salaries of MPs’ staff; drawing up, reviewing, and administering an MP’s allowance scheme; providing MPs with publicly available and information relating to taxation issues; and determining the procedures for investigations and complaints relating to MPs.

Owing to what has happened in the Parliament of Botswana recently, we now need to have a way of limiting what MPs can do especially when it comes to laws that concern them. We cannot be too trusting as a nation.

MPs can abuse office for their own agendas. There is need to act swiftly to deal with the inherent conflict of interest that arise as a result of our legislative setup. A voice of reason should emerge from Parliament to address this unpleasant situation. This cannot be business as usual.

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Opinions

The Corona Coronation (Part 10)

9th July 2020

Ever heard of a 666-type beast known as Fort Detrick?

Located in the US state of Maryland, about 80 km removed from Washington DC, Fort Detrick houses the US army’s top virus research laboratory. It has been identified as “home to the US Army Medical Research and Materiel Command, with its bio-defense agency, the US Army Medical Research Institute of Infectious Diseases, and  also hosts the National Cancer Institute-Frederick and the National Interagency Confederation for Biological Research and National Interagency Biodefense Campus”.

The 490-hectare campus researches the world’s deadliest pathogens, including Anthrax (in 1944, the Roosevelt administration ordered 1 million anthrax bombs from Fort Detrick), Ebola, smallpox, and … you guessed right: coronaviruses.  The facility, which carries out paid research projects for government agencies (including the CIA), universities and drug companies most of whom owned by the highly sinister military-industrial complex, employs 900 people.

Between 1945 and 1969, the sprawling complex (which has since become the US’s ”bio-defence centre” to put it mildly) was the hub of the US biological weapons programme. It was at Fort Detrick that Project MK Ultra, a top-secret CIA quest to subject   the human mind to routine robotic manipulation, a monstrosity the CIA openly owned up to in a congressional inquisition in 1975, was carried out.  In the consequent experiments, the guinea pigs comprised not only of people of the forgotten corner of America – inmates, prostitutes and the homeless but also prisoners of war and even regular US servicemen.

These unwitting participants underwent up to a 20-year-long ordeal of barbarous experiments involving psychoactive drugs (such as LSD), forced electroshocks, physical and sexual abuses, as well as a myriad of other torments. The experiments not only violated international law, but also the CIA’s own charter which forbids domestic activities. Over 180 doctors and researchers took part in these horrendous experiments and this in a country which touts itself as the most civilised on the globe!

Was the coronavirus actually manufactured at Fort Detrick (like HIV as I shall demonstrate at the appropriate time) and simply tactfully patented to other equally cacodemonic places such as the Wuhan Institute of Virology in China?

THE FORT DETRICK SCIENTISTS’ PROPHECY WAS WELL-INFORMED

 

About two years before the term novel coronavirus became a familiar feature in day-to-day banter, two scientist cryptically served advance warning of its imminence. They were Allison Totura and Sina Bavari, both researchers at Fort Detrick.

The two scientists talked of “novel highly pathogenic coronaviruses that may emerge from animal reservoir hosts”, adding, “These coronaviruses may have the potential to cause devastating pandemics due to unique features in virus biology including rapid viral replication, broad host range, cross-species transmission, person-to-person transmission, and lack of herd immunity in human populations  Associated with novel respiratory syndromes, they move from person-to-person via close contact and can result in high morbidity and mortality caused by the progression to acute respiratory distress syndrome (ARDS).”

All the above constitute some of the documented attributes and characteristics of the virus presently on the loose – the propagator of Covid-19. A recent clinical review of Covid-19 in The Economist seemed to bear out this prognostication when it said, “It is ARDS that sees people rushed to intensive-care units and put on ventilators”. As if sounding forth a veritable prophecy, the two scientists besought governments to start working on counter-measures there and then that could be “effective against such a virus”.

Well, it was not by sheer happenstance that Tortura and Bavari turned out to have been so incredibly and ominously prescient. They had it on good authority, having witnessed at ringside what the virus was capable of in the context of their own laboratory.  The gory scenario they painted for us came not from secondary sources but from the proverbial horse’s mouth folks.

CDC’S RECKLESS ADMISSION

In March this year, Robert Redfield, the US  Director for the Centre for Disease Control and Prevention (CDC),  told the House of Representatives’ Oversight Committee that it had transpired that some members of the American populace  who were certified as having died of influenza  turned out to have harboured the novel coronavirus per posthumous analysis of their tissue.

Redfield was not pressed to elaborate but the message was loud and clear – Covid-19 had been doing the rounds in the US much earlier than it was generally supposed and that the extent to which it was mistaken for flu was by far much more commonplace than was openly admitted. An outspoken Chinese diplomat, Zhao Lijian, seized on this rather casual revelation and insisted that the US disclose further information, exercise transparency on coronavirus cases and provide an explanation to the public.

But that was not all the beef Zhao had with the US. He further charged that the coronavirus was possibly transplanted to China by the US: whether inadvertently or by deliberate design he did not say.  Zhao pointed to the Military World Games of October 2019, in which US army representatives took part, as the context in which the coronavirus irrupted into China. Did the allegation ring hollow or there was a ring of truth to it?

THE BENASSIE FACTOR

The Military World Games, an Olympic-style spectrum of competitive action, are held every four years. The 2019 episode took place in Wuhan, China. The 7th such, the games ran from October 18 to October 27.  The US contingent comprised of 17 teams of over 280 athletes, plus an innumerable other staff members. Altogether, over 9000 athletes from 110 countries were on hand to showcase their athletic mettle in more than 27 sports. All NATO countries were present, with Africa on its part represented by 30 countries who included Botswana, Egypt, Kenya, Zambia, and Zimbabwe.

Besides the singular number of participants, the event notched up a whole array of firsts. One report spelt them out thus: “The first time the games were staged outside of military bases, the first time the games were all held in the same city, the first time an Athletes’ Village was constructed, the first time TV and VR systems were powered by 5G telecom technology, and the first use of all-round volunteer services for each delegation.”

Now, here is the clincher: the location of the guest house for the US team was located in the immediate neighbourhood of the Wuhan Seafood Market, the place the Chinese authorities to this day contend was the diffusion point of the coronavirus. But there is more: according to some reports, the person who allegedly but unwittingly transmitted the virus to the people milling about the market – Patient Zero of Covid-19 – was one Maatie Benassie.

Benassie, 52, is a security officer of Sergeant First Class rank at the Fort Belvoir military base in Virginia and took part in the 50-mile cycling road race in the same competitions. In the final lap, she was accidentally knocked down by a fellow contestant and sustained a fractured rib and a concussion though she soldiered on and completed the race with the agonising adversity.  Inevitably, she saw a bit of time in a local health facility.   According to information dug up by George Webb, an investigative journalist based in Washington DC,     Benassie would later test positive for Covid-19 at the Fort Belvoir Community Hospital.

Incidentally, Benassie apparently passed on the virus to other US soldiers at the games, who were hospitalised right there in China before they were airlifted back to the US. The US government straightaway prohibited the publicising of details on the matter under the time-honoured excuse of “national security interests”, which raised eyebrows as a matter-of-course. As if that was not fishy enough, the US out of the blue tightened Chinese visas to the US at the conclusion of the games.

The rest, as they say, is history: two months later, Covid-19 had taken hold on China territory.  “From that date onwards,” said one report, “one to five new cases were reported each day. By December 15, the total number of infections stood at 27 — the first double-digit daily rise was reported on December 17 — and by December 20, the total number of confirmed cases had reached 60.”

TWO CURIOUS RESEARCH HALTINGS

Is it a coincidence that all the US soldiers who fell ill at the Wuhan games did their preparatory training at the Fort Belvoir military base, only a 15-minutes’  drive from Fort Detrick?

That Fort Detrick is a plain-sight perpetrator of pathogenic evils is evidenced by a number of highly suspicious happenings concerning it. Remember the 2001 anthrax mailing attacks on government and media houses which killed five people right on US territory? The two principal suspects who puzzlingly were never charged, worked as microbiologists at Fort Detrick. Of the two, Bruce Ivins, who was the more culpable, died in 2008 of “suicide”. For “suicide”, read “elimination”, probably because he was in the process of spilling the beans and therefore cast the US government in a stigmatically diabolical light. Indeed, the following year, all research projects at Fort Detrick were suspended on grounds that the institute was “storing pathogens not listed   in its database”. The real truth was likely much more reprehensible.

In 2014, there was a mini local pandemic in the US which killed thousands of people and which the mainstream media were not gutsy enough to report. It arose following the weaponisation at Fort Detrick of the H7N9 virus, prompting the Obama administration to at once declare a moratorium on the research and withdraw funding.

The Trump administration, however, which has a pathological fixation on undoing practically all the good Obama did, reinstated the research under new rigorous guidelines in 2017. But since old habits die hard, the new guidelines were flouted at will, leading to another shutdown of the whole research gamut at the institute in August 2019.  This, nonetheless, was not wholesale as other areas of research, such as experiments to make bird flu more transmissible and which had begun in 2012, proceeded apace. As one commentator pointedly wondered aloud, was it really necessary to study how to make H5N1, which causes a type of bird flu with an eye-popping mortality rate, more transmissible?

Consistent with its character, the CDC was not prepared to furnish particulars upon issuing the cease and desist order, citing “national security reasons”. Could the real reason have been the manufacture of the novel coronavirus courtesy of a tip-off by the more scrupulous scientists?

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Opinions

Masisi faces ultimate test of his presidency

9th July 2020

President Mokgweetsi Masisi may have breathed a huge sigh of relief when he emerged victorious in last year’s 2019 general elections, but the ultimate test of his presidency has only just begun.

From COVID-19 pandemic effects; disenchanted unemployed youth, deteriorating diplomatic relations with neighbouring South Africa as well as emerging instability within the ruling party — Masisi has a lot to resolve in the next few years.

Last week we started an unwanted cold war with Botswana’s main trade partner, South Africa, in what we consider an ill-conceived move. Never, in the history of this country has Botswana shown South Africa a cold shoulder – particularly since the fall of the apartheid regime.

It is without a doubt that our country’s survival depends on having good relations with South Africa. As the Chairperson of African National Congress (ANC), Gwede Mantashe once said, a good relationship between Botswana and South Africa is not optional but necessary.

No matter how aggrieved we feel, we should never engage in a diplomatic war — with due respect to other neighbours— with South Africa. We will never gain anything from starting a diplomatic war with South Africa.

In fact, doing so will imperil our economy, given that majority of businesses in the retail sector and services sector are South African companies.

Former cabinet minister and Phakalane Estates proprietor, David Magang once opined that Botswana’s poor manufacturing sector and importation of more than 80 percent of the foodstuffs from South Africa, effectively renders Botswana a neo-colony of the former.

Magang’s statement may look demeaning, but that is the truth, and all sorts of examples can be produced to support that. Perhaps it is time to realise that as a nation, we are not independent enough to behave the way we do. And for God’s sake, we are a landlocked country!

Recently, the effects of COVID-19 have exposed the fragility of our economy; the devastating pleas of the unemployed and the uncertainty of the future. Botswana’s two mainstay source of income; diamonds and tourism have been hit hard. Going forward, there is a need to chart a new pathway, and surely it is not an easy task.

The ground is becoming fertile for uprisings that are not desirable in any country. That the government has not responded positively to the rising unemployment challenge is the truth, and very soon as a nation we will wake up to this reality.

The magnitude of the problem is so serious that citizens are running out of patience. The government on the other hand has not done much to instil confidence by assuring the populace that there is a plan.

The general feeling is that, not much will change, hence some sections of the society, will try to use other means to ensure that their demands are taken into consideration. Botswana might have enjoyed peace and stability in the past, but there is guarantee that, under the current circumstances, the status quo will be maintained.

It is evident that, increasingly, indigenous citizens are becoming resentful of naturalised and other foreign nationals. Many believe naturalised citizens, especially those of Indian origin, are the major beneficiaries in the economy, while the rest of the society is side-lined.

The resentfulness is likely to intensify going forward. We needed not to be heading in this direction. We needed not to be racist in our approach but when the pleas of the large section of the society are ignored, this is bound to happen.

It is should be the intention of every government that seeks to strive on non-racialism to ensure that there is shared prosperity. Share prosperity is the only way to make people of different races in one society to embrace each other, however, we have failed in this respect.

Masisi’s task goes beyond just delivering jobs and building a nation that we all desire, but he also has an immediate task of achieving stability within his own party. The matter is so serious that, there are threats of defection by a number of MPs, and if he does not arrest this, his government may collapse before completing the five year mandate.

The problems extend to the party itself, where Masisi found himself at war with his Secretary General, Mpho Balopi. The war is not just the fight for Central Committee position, but forms part of the succession plan.

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