Connect with us
Advertisement

ADB: Botswana’s growth not inclusive!

African Development Bank’s latest report indicates that despite Botswana’s impressive economic performance; growth has not been inclusive. In particular, the high unemployment and inequality if unattended, has the potential of creating social unrest.

To ensure inclusive growth, Botswana needs to address its two main challenges which are limited economic growth diversification and inadequate infrastructure. Limited economic diversification has led to an increased dominance of government in economic activities which is constraining private sector participation.

Low private sector investment inhibits the progress of economic diversification, and in turn hinders overall manufacturing productivity, creating a vicious cycle of headwinds to growth. Public sector dominance has distorted the labor market and softened growth of the private sector. Large flows of diamonds revenues allow government to be the largest and a generous employer thereby inadvertently influencing the worker’s preference for the limited job opportunities in the government. This has created skills shortages in the private sector and also increased the reservation wage resulting in higher cost of production and low productivity.

The large public sector has become a growing source of inefficiency, weak competitiveness, and a constraint to private enterprise development. The special privileges extended to state-owned enterprises make it more difficult for the private sector, large enterprises and SMEs alike, to participate in certain key areas of the economy, thus inhibiting competition and associated gains in productivity and efficiency. Reforms are needed to remove inefficiencies, and promote productivity of the state-owned enterprises. In addition, Botswana needs to improve the business environment to become more competitive particularly with respect to South Africa.

Capacity constraints and skills shortages have been persistent despite significant public investments in educational facilities. The situation is further aggravated by the high incidence of HIV and AIDS. The shortage of skilled workers has hindered knowledge transfer and innovation. A sustained investment in human capital will ensure that long-term growth is more firmly based, as well as more inclusive, and will grow the importance as the economy diversifies and climbs up the value chain of both the manufacturing and the service sectors.

The report further indicated that the quality of some components of basic infrastructure at present is lagging behind many of Botswana’s peers. A concerted effort to improve the quality of infrastructure holds the key to transforming the economy and sustaining high growth.
Electricity supply in Botswana is inadequate and unreliable, with the available capacity of 322 megawatts falling far short of its demand of about 580 megawatts, which in the past has been partly met through imports.

The stabilization of Morupule B power station, with a potential output of 600 megawatts, is expected to ease the situation in the short term. In the medium to long term, it is envisaged that new generating capacity, Morupule C 2 X 150 megawatts brownfield project and another 2 X megawatts greenfield project, will be developed by the private sector under the framework of independent power producers. Low tariffs could pose constraints to attracting private sector participation in the electricity subsector.

Electricity tariffs need to be adjusted to improve the viability of the sector. It is also important to establish the legal and regulatory framework that is conducive to private sector participation, including a regulatory agency with adequate authority and capacity to regulate the sector.
While Botswana’s internal transport infrastructure network is considered adequate, its landlocked status and vast terrain significantly increases trading costs.

The provision of reliable transport services between the main population and production centers, and to neighboring countries remains one of government’s top priorities in order to encourage foreign investments in key sectors of the economy, such as mining, construction, manufacturing and tourism. For example, the exportation of coal will require a rail network to the posts. A well- developed transport system would assist this land-locked country to position itself gainfully so that it becomes a preferred transit route.

On the ICT sector, Botswana has very high mobile penetration rates, but internet access and fixed broadband subscription is low for a middle income country. Historically, Botswana has depended on satellites for its international bandwidth, and on other countries to transit capacity to landing points of international submarine fiber-optic cable systems. The virtual monopoly of the Botswana Telecommunications Corporation has resulted in high wholesale costs.

The landing additional cables in the region in 2011 and 2012 has improved the competitiveness in this regard. Transformation of the economy to advanced manufacturing and services will require faster and affordable broadband. To address this, the government is in the process of finalizing the national broadband strategy to roll out a high- speed and reliable network.

Water shortage remains a challenge. Botswana is a drought-prone country and suffers from water shortages especially in the southern part of the country, which makes food security challenging. Over 60% of domestic food demand is met through imports, underscoring the need for increased investment in irrigation infrastructure. The increasing rate of urbanization has also put significant pressure on its water resources for human consumption and industrial use. Inadequate and irregular water supply also constrains the growth of the manufacturing sector. To address the inefficiencies and long term sustainability of the sector, implementation of the water reform programme is ongoing.

The CDB report further highlighted that Botswana is not an aid dependent country, but has used the little ODA it receives effectively in support of development. When Botswana graduated to middle income country status, several development partners scaled down their activities. Despite this, Botswana has made significant progress in aid coordination and harmonization. The government launched the Development Partners Coordination Forum in September 2007, which meets twice a year.

The Forum comprises of government representatives, heads of diplomatic missions and bilateral and multilateral organizations including the Bank which always participates in scheduled meetings, benefiting from the proximity of the Bank’s Southern Africa Resource Center to the country. The Forum provides a two-way platform for information sharing on government policies, aid modalities and aid coordination in general. Nonetheless, the alignment and harmonization of donor support the low.

There are very few joint missions and analytical work, and routine sector working groups rarely meet. Consistent with the Paris Declaration and the Accra Agenda for Action, country systems for public financial management and procurement are continuously assessed and strengthened throughout Bank-funded operations.

It also indicated that the country benefits from support from a number of development partners, with European Union leading donor providing, among others forms of assistance, sector budget support to the education sector. The World Bank supports the public financial management reform process and energy generation, while the Bank’s focus is mainly on energy transmission and agricultural infrastructure. United Nations agencies spearhead capacity building initiatives while the United States leads support to the health sector, focusing on preventative measures on HIV and AIDS. Nonetheless, there are numerous donor supported operations, numbering about 140 in 2012.

However, the CDB has put down a strategy for Botswana. Botswana’s mineral-driven and public –sector led growth model provided four decades of strong performance but maintaining strong growth has been a challenge in recent years. In addition, growth has been less inclusive. The declining trend in growth may exacerbate Botswana’s already high income inequality and persistent unemployment. Tackling the high level of structural unemployment is important to improve the quality of economic growth.

Private sector led growth is essential if Botswana is to unleash its growth potential and sustain it. The will require a decisive reforms and innovative policies to reinvigorate productivity. Botswana is at a crossroad with the global downturn leading to a rethinking of the country’s development strategy. The MTR of the NDP10 recognizes that a new economic model is required.

Old policies need to be reviewed to make the case for an additional transformation to avoid a middle-income trap. The need to transform the country has long been recognized but the sense of urgency seems higher now than in the past. An ambitious agenda for new sources of economic growth and employment needs to be set.

Continue Reading

News

Civil Service volatility: Democracy vs Bureaucracy

19th April 2021
President Masisi

Here is how one Permanent Secretary encapsulates the clear tension between democracy and bureaucracy in Botswana: “President Mokgweetsi Masisi’s Government is behaving like a state surrounded with armed forces in order to capture it or force its surrender. The situation has turned so volatile, for tomorrow is not guaranteed for us top civil servants.

These are the painful results of a personalized civil service in our view as permanent secretaries”. Although his deduction of the situation may be summed as sour grapes because he is one of the ‘victims’ of the reshuffle, he is convinced this is a perfect description of the rationale behind frequent changes and transfers characterising the current civil service.

The result of it all, he said, is that “there is too much instability at managerial and strategic levels of the civil service leading to a noticeable directionless civil service.” He continued: “Changes and transfers are inevitable in the civil service, but to a permissible scale and frequency. Think of soccer team coach who changes and transfers his entire squad every month; you know the consequences?”

The Tsunami has hit hard at critical departments and Ministries leaving a strong wave of uncertainty, many demoralised and some jobless. In traditional approaches to public administration, democracy gives the goals; and bureaucracy delivers the technical efficiency required for implementation. But the recent moves in the civil service are indicative of conflicting imperatives – the notion of separation between politicians and administrators is becoming blurred by the day.

“Look at what happened to Prisons and BDF where second in command were overlooked for outsiders, and these are the people who had sacrificially served for donkey’s years hoping for a seat at the ladder’s end. The frequency of the changes, at times affecting the same Ministry or individual also demonstrates some level of ineptitude, clumsiness and lack of foresight from those in charge,” remarked the PS who added that their view is that the transfers are not related to anything but “settling scores, creating corruption opportunities and pushing out perceived dissident and former president, Ian Khama’s alleged loyalists and most of these transfers are said to be products of intelligence detection.”

Partly blaming Khama for the mess and his unwillingness to let go, the PS dismissed Masisi for falling to the trap and failing to outgrow the destructive tiff. “Khama is here to stay and the sooner Masisi comes to terms with the fact that he (Masisi) is the state President, the better. For a President to still be making these changes and transfers signals signs of a confused man who has not yet started rolling his roadmap, if at all it was ever there. I am saying this because any roadmap comes with key players and policies,” he concluded.

The Ministry of Health and Wellness seems to be the most hard-hit by the transfers, having experienced three Permanent Secretaries changes within a year and a half. Insiders say the changes have everything to do with the Ministry being the centre of COVID-19 tenders and economic opportunities. “The buck stops with the PS and no right-thinking PS can just allow glaring corruption under his watch as an accounting officer. Technocrats are generally law abiding, the pressure comes with politically appointed leaders racing against political terms to loot,” revealed a director in the Ministry preferring anonymity.

The latest transfer of Kabelo Ebineng she says was also motivated by his firm attitude against the President’s blue-eyed Task Team boys. “The Task Team wants to own the COVID-19 pandemic and government interventions and always cry foul when the Ministry reasserts itself as mandated by law,” said the director who added that Masisi who was always caught between the crossfire decided on sacrificing Ebineng to the joy of his team as they (Task Team) were in the habit of threatening to resign citing Ebineng as the problem.

Ebineng joins the Office of the President as a deputy Coordinator (government implementation and coordination office).The incoming PS is the soft-spoken Grace Muzila, known and described by her close associates as a conformist albeit knowledgeable.

One of the losers in the grand scheme is Thato Raphaka who many had seen as the next PSP because of his experience and calm demeanour following a declaration of interest in the Southern African Development Community (SADC) Secretary post by the current PSP, Elias Magosi.

But hardly ten months into his post, Raphaka has been transferred out to the National Strategy Office in what many see as a demotion of some sort. Other notable changes coming into OP are Pearl Ramokoka formerly with the Employment, Labour and Productivity Ministry coming in as a Permanent Secretary and Kgomotso Abi as director of Public Service Reforms.

One of the ousted senior officers in the Office of the President warned that there are no signs that the changes and transfers will stop anytime soon: “If you are observant you would have long noticed that the changes don’t only affect senior officers but government decisions as well. A decision is made today and the government backtracks on it within a week. Not only that, the President says this today, and his deputy denies it the following day in Parliament,” he warned.

Some observers have blamed the turmoil in the civil service partly to lack of accountable presidential advisers or kitchen cabinet properly schooled on matters of statecraft. They point out that politicians or those peripheral to them should refrain from hampering the technical and organizational activities of public managers – or else the party (reshuffling) won’t stop.

In the view expressed by some Permanent Secretaries, Elias Magosi, has not really been himself since joining the civil service; and has cut a picture of indifference in most critical engagements; the most notable been a permanent secretaries platform which he chairs. As things stand there is need to reconcile the imperatives of democracy and democracy in Botswana. Peace will rein only when public value should stand astride the fault that runs between politicians and public managers.

Continue Reading

News

Morupisi fights for freedom in court

19th April 2021
morupisi

Former Permanent Secretary to the President, Carter Morupisi, is fighting for survival in a matter in which the State has charged him and his wife, Pinnie Morupisi, with corruption and money laundering.

Morupisi has joined a list of prominent figures that served in the previous administration and who have been accused of corruption during their tenure in office. While others have been emerging victorious, Morupisi is yet to find that luck. The High Court recently dismissed his no case to answer application.

This content is locked

Login To Unlock The Content!

Continue Reading

News

Pressure mounts on Biden to suspend Covid-19 vaccine patents

19th April 2021
Joe Biden

United States President, Joe Biden, is faced with a decision to make relating to the Covid-19 vaccine intellectual property after 175 former world leaders and Nobel laurates joined the campaign urging the US to take “urgent action” to suspend intellectual property rights for Covid-19 vaccines to help boost global inoculation rates.

According to the world leaders, doing so would allow developing countries to make their own copies of the vaccines that have been developed by pharmaceutical companies without fear of being sued for intellectual property infringements.

“A WTO waiver is a vital and necessary step to bringing an end to this pandemic. It must be combined with ensuring vaccine know-how and technology is shared openly,” the signatories, comprising more than 100 Nobel prize-winners and over 70 former world leaders, wrote in a letter to US President Joe Biden, according to Financial Times.

A measure to allow countries to temporarily override patent rights for Covid related medical products was proposed at the World Trade Organization by India and South Africa in October, and has since been backed by nearly 60 countries.

Former leaders who signed the letter included Gordon Brown, former UK Prime Minister; François Hollande, former French President; Mikhail Gorbachev, former President of the USSR; and Yves Leterme, former Belgian Prime Minister.

In their official communication, South Africa and India said: “As new diagnostics, therapeutics and vaccines for Covid-19 are developed, there are significant concerns [about] how these will be made available promptly, in sufficient quantities and at affordable prices to meet global demand.”

While developed countries have been able to secure enough vaccine to inoculate their citizens, developing countries such as Botswana are struggling to source enough to swiftly vaccine their citizens, something which world leaders believe it would work against global recovery therefore proving counter-productive.

Since the availability of vaccines, Botswana has been able to secure only 60 000 doses of vaccines, 30 000 as donation as from the Indian government, while the other 30 000 was sourced through COVAX facility.  Canada, has pre-ordered vaccines in surplus and it will be able to vaccinate each of its citizens six times over. In the UK and US, it is four vaccines per person; and two each in the EU and Australia.

For vaccines produced in Europe, developing countries are forced to pay double what European countries are paying, making it more expensive for already financially struggling economies.  European countries however justify the price of vaccines and that they deserve to buy them cheap since they contributed in their development.

It is evident that vaccines cannot be made available immediately to all countries worldwide with wealthy economies being the only success story in that regard, something that has been referred to as a “catastrophic moral failure”, head of the World Health Organisation (WHO), Tedros Adhanom Ghebreyesus.

The challenge facing developing countries is not only the price, but also the capacity of vaccine manufactures to be able to do so to meet global demand within a short time. The proposal for a patent waiver by India and South Africa has been rejected by developed countries, known for hosting the world leading pharmaceutical companies such US, European Union, the United Kingdom, and Switzerland.

According to the Financial Times, US business groups including pharmaceutical industry representatives, have urged Biden to resist supporting a waiver to IP rules at the WTO, arguing that the proposal led by India and South Africa was too “vague” and “broad”.

The individuals who signed the letter, including Nobel laureates in economics as well as from across the arts and sciences, warned that inequitable vaccine access would impact the global economy and prevent it from recovering.

“The world saw unprecedented development of safe and effective vaccines, in major part thanks to US public investment,” the group wrote. “We all welcome that vaccination rollout in the US and many wealthier countries is bringing hope to their citizens.”

“Yet for the majority of the world that same hope is yet to be seen. New waves of suffering are now rising across the globe. Our global economy cannot rebuild if it remains vulnerable to this virus.”
The group warned that fully enforcing IP was “self-defeating for the US” as it hindered global vaccination efforts. “Given artificial global supply shortages, the US economy already risks losing $1.3tn in gross domestic product this year.”

Continue Reading
Do NOT follow this link or you will be banned from the site!