Kenyan Academic and Pan Africanist, Professor PLO Lumumba has urged the University of Botswana to take the lead in transforming the country‘s economy form middle income, resources based to high income knowledge based, and diversified economic setup.
In an interview with Weekendpost this week Professor Lumumba noted that universities and academic institutions play a major role in developed economies. The renowned academic says as the world embraces technological advancement birthed by the 4th Industrial Revolution universities must change too, at a pace unfamiliar to higher education. “The University of Botswana as the highest institution of learning in the land should assume its rightful role in driving innovation and catalyzing economic development through cutting edge research and solutions driven dialogue on macroeconomic issues,” he said.
According to Lumumba, it is the University of Botswana that should answer the “how part” in each and every question in the nation’s ambitions. “The country cannot be guessing on which way to go and what measures to put in place while it has a fully fleshed and well built academic institution that has a vibrant academia, and hungry young men and women in its student.”
Professor Lumumba noted that UB should engage in rigorous research to deliver the path way and direction on which the country shall take in the new era of tech based economies and actually produce the right human resources for the transformational advancement. “The human resources development buck stops with UB as the country‘s premier institution, is it producing graduates that are relevant and required by the industry, are the programs offers globally competitive to feed requirements of foreign direct investment, those are the question University of Botswana should answer and actually set the pace so all other institutions follow,” he said.
The Kenyan Pan Africanist further urged the University of Botswana to foster entrepreneurship amongst its students and graduates .According to the World Economic Forum as the pace of discovery accelerates and global competition intensifies, universities are embracing entrepreneurship as part of the academic experience, creating cultures where innovative thinking is inspired and nurtured. As of 2017, more than 200 colleges and universities have launched centers dedicated for innovation or entrepreneurship as members of the Global Consortium of Entrepreneurship Centers.
“It seems that no matter what field they study, students come to college seeking to make a difference in society through startups, social entrepreneurship, and other ventures of their own creation. We see the same kind of energy and excitement in young faculty, too, who now expect to develop new technologies or engage in startups as part of their academic career,” suggests the World Economic Forum. Professor Lumumba says as economic challenges require new discoveries and inventions the intersections of diverse disciplines, developing a culture of entrepreneurship is one of the most powerful ways that universities act as economic accelerators.
Quizzed on whether Botswana can archive some of the ambitions outlined by political parties in the build up to elections, Professor Lumumba says it is very much possible for Botswana to develop a vibrant hemp industry. “Botswana can produce electric car as well , or better yet leverage on its abundant solar energy and produce a solar charged cars, that is innovation and invention Africans can do it, matter of fact Rwanda this week launched Africa’s first made cell phone, Botswana can do it as well,” he said,
ON SOLAR ENERGY
The Kenyan constitutional law gaffer reiterated Botswana potential in being one of Africa’ model industrial hub when it comes to solar energy. He said while Botswana, Namibia and other African countries with abundant sunlight are crying and complaining of too much heat other countries admire the natural resources. “Botswana could develop a multimillion dollar industry out of solar energy, massive industrialization in terms of manufacturing solar charging chips , assembling of power storing batteries , endless opportunities and huge potential in creating jobs for young people,” he said.
According to Lumumba, Botswana could easily achieve 100 percent domestic electrification, export power to other countries at the same time going green and reducing the environmental negative impacts that comes with coal based power generation. “A vibrant solar power sector can fuel other sectors of the economy; you could easy power your commercial ambitions in the Agricultural sector and actually produce food for yourself as a country and reduce the import bill,” he said.
Borrowing from the success of Israel in the areas of innovations particularly in the Agricultural sector Lumumba returned the conversation back to University of Botswana saying the institution must lead Research & Development (R & D). “Israel‘s R & D was spearheaded by academic institutions and the entire country is now enjoying a vibrant modern technology farming and a booming domestic food production industry.
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.
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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”