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.
Health workers are at the front line fighting the deadly, contagious COVID-19. These workers have an immense challenge of welfare and government has since turned a blind eye to dares and crushing odds throttling health officers, particularly nurses.
Botswana Nurses Union (BONU) has once more called on government to invest in the country’s nurses and give the nursing profession dignity.
In May 2020, BONU President, Obonolo Rahube said government should, in line with the advocacy of World Health Organisation (WHO) invest more on nurses and midwives, and further advised government to address challenges that nurses are faced with. The proposal was made on International Nurses Day.
At the time, Rahube urged government to provide subsidised accommodation for nurses and midwives as it has emerged that during the fight against the Corona-virus, accommodation for nurses and midwives is very important. Rahube called on government to provide nurses and midwives with 100% medical cover.
He also called on government to introduce risk allowance for nurses and midwives, noting that as frontline workers during the pandemic, they are at high risk. Nurses also demanded Personal Protective Equipment (PPE), a matter which they lost with costs in court. Also critical during the COVID-19 era for health workers, psychological support is what BONU maintains is still lacking.
In the same year (2020), the Union raised a number of other challenges they are being faced with. These challenges, they asserted, make it testing for them to undertake their duties, especially now that COVID-19 has shaken Botswana’s already weak health system.
BONU expressed disappointment at nurses’ pay, nurses who tested positive for COVID-19 at an alarming rate, violence against nurses, nurses’ contracts which were never renewed and a poorly coordinated vaccination plan for health workers.
Clearly, nurses are not only battling the COVID-19 virus, but also government who has since refused to come to the party.
This week once again, BONU tested waters and slammed government with more demands, some of which have turned into an everyday song while COVID-19 continues to kill more nurses.
At a press conference on Tuesday, BONU President Rahube said over 800 nurses have been infected with COVID-19. Of this number, 34 nurses lost their lives due to COVID-19 related infections.
WHO and other health experts say for countries to emerge victorious from the COVID-19 pandemic, they must fast-track the roll out of vaccine. In Botswana, there is no clear explanations of how the vaccination plan is going.
The situation around vaccination is chaotic, and this is evidenced by only 28% of nurses who have been vaccinated. President Mokgweetsi Masisi is also disturbed by the COVAX programme as Botswana vaccines arrive in the country missing, every time.
Debates in Parliament on which vaccine to adopt are failing to conclude, in fact, they never gained energy. Rahube told members of the media that nurses are overworked.
“Shortage of nurses puts those available at risk. Some nurses are on isolation, quarantine and some passed on. Nurses do both testing and contact tracing so they end up working stretched hours, at times from 6am to 10pm. There is no how nurses will be able to deliver while exhausted,” he said.
He further indicated that infection control practitioners are not recognised and deployed appropriately, and some regions have shortage of commodities and supplies such as water resistant gowns (nurses are forced to re-use those availed), masks, gloves, scrubs and uniforms.
Oxygen supply is said to be in shortage, something that mounts COVID-19 deaths.
“Patients lose their lives whilst still awaiting to be put on oxygen. Psychological services are in serious need as nurses continue to lose their significant others, faced with resource constraints and many of them are not vaccinated,” said Rahube.
Accommodation still remains a huge challenge for nurses. BONU President said nurses overcrowd with families and colleagues.
In Kauxwi, four nurses share a single house, in Moshaweng two nurses share a single bedroomed house together with their families, with no electricity yet the village is powered. In Kazungula, there are only two staff houses for 11 nurses and their families.
The union stressed that the Chief Nursing Officer is not coming to the party, and the expectation is that the office should be coordinating all nursing issues at the Health Ministry. Rahube indicated that transfers have been frozen, promotions stalled and they continue to lose nursing posts to other Ministries.
In a number of recommendations, BONU urged government to consider compensation and risk allowance for staff affected by COVID-19 related deaths and those infected. “COVID-19 has been declared an occupational health illness, in essence, the employer should facilitate its occupational health division, and there are lots of occupational health nurses who are wrongly deployed, who could be running such programs at the facilities.”
In regard to vaccinations, BONU underlined that there should be clear information relating to vaccines and they should be made accessible. “Local franchise manufacturing of vaccine could use Botswana Vaccines Institute (BVI) and government should be clear and transparent concerning procurement of vaccines. It should also allow stakeholders with capacities of procuring vaccines to do so.”
Government is moving swiftly to completely overhaul public procurement — a new Bill has been tabled before Parliament this week by Minister of Finance and Economic Development, Peggy Serame and is scheduled for debate in the coming days of the current parliament sitting.
Through this Bill the country’s purse bearer seeks to dismantle existing public procurement pieces of legislation, transform, merge and form a new public procurement arrangement. The existing public procurement high command base — the Public Procurement and Asset Disposal Board (PPDB) would cease to exist.
This organisation will transition and assume the reigns of a regulator and oversight authority; the actual procurement; floating of tenders, accepting bids, adjudicating and awarding tenders will be fully taken over by Government departments accounting officers.
Accounting officers are Permanent Secretaries and statutory organisation heads and directors or any person who is responsible for the administration and day-to-day management of the affairs of a procuring entity, and any other person, who may be designated as such by the Minister under the act.
Speaking to this Bill this week, Serame revealed that the current Public Procurement and Asset Disposal arrangement will be merged with the local authority’s procurement Act.
“We will now have procurement under one roof, all overseen by accounting officers, it’s all government money coming from one port,” she said.
Minister Serame explained that PPADB will no longer be player and referee at the same time, with a view to improve efficiency and effectiveness in the regulation and management of public procurement processes.
According to Minister Serame, the new public procurement Act will promote competition among suppliers and contractors, and also provide for the fair, equal and equitable treatment of all suppliers and contractors.
PUBLIC PROCUREMENT REGULATORY AUTHORITY
Should parliament pass this bill the current Public Procurement and Asset Disposal Board (PPADB) will transition into a new body called Public Procurement Regulatory Authority.
The new Authority will be mandated with setting standards and practices for the public procurement system, regulate and control the public procurement system, ensure the application of fair, equitable, competitive, transparent, accountable, efficient, non-discriminatory, honest, value for money and public confidence in procurement standards and practices.
Furthermore the Authority will monitor and enforce compliance with the new Act and any relevant law by a procuring entity.
For standardization and ensuring of world class procurement best practices the Public Procurement Regulatory Authority will monitor, assess, review and report on the performance of the public procurement system to the Minister and advise on desirable changes, and further issue standardized bidding documents to all procuring entities
This oversight and procurement regulator will conduct periodic inspections of the records and proceedings of a procuring entity to ensure compliance with the Act.
The regulator will institute periodically, in respect of any procurement —a procurement audit during a tender process, a contract audit in the course of execution of an awarded tender, a performance audit after the completion of a contract, and an investigation at any stage of a procurement process.
The Authority will continue to keep and maintain an up-to-date register of contractors, known as the “Contractors’ Register”, in works, services and supplies, or any combination thereof, however classified.
The new Public Procurement Regulatory Authority will be governed by a board of nine (9) non-executive directors appointed by the Minister of Finance and Economic Development.
The Public Procurement Board will be charged with directing the affairs of the Authority. Day to day executive activities of the Public Procurement Authority will be run by a Chief Executive Officer who will be appointed by the Minister on the recommendation of the board.
PROCURING ENTITIES AND ACCOUNTING OFFICERS
The actual procurement will now be handled by the Accounting Officers who will lead their procuring entities. The entities will consist of the procurement oversight unit, a procurement unit, an ad hoc Evaluation Committee, the user Department; or any other appropriate structure put in place by the Government.
The Accounting Officer will be in charge of establishment of appropriate procurement structures to undertake the procurement functions under the new act, which shall be staffed at an appropriate level in line with the model structure issued by the Public Procurement Regulatory Authority.
The Accounting Officer will also be charged with establishment, as may be prescribed, of a committee within a procuring entity which will oversee procurement activities, establishment, as may be prescribed, of an oversight committee to monitor procurement activities in a procuring entity.
The primary role of the Accounting Officers will be adjudication and award of tenders, including the adjudication of a bid recommendation submitted to him/her through a procurement oversight unit.
The Accounting officer will have powers to cancel a tender process and reject a tender offer at any time prior to entering into a contract, in the manner as may be prescribed, and the Accounting Officer shall not compensate the bidder of a tender that has been cancelled.
Under this proposed Act new set of regulations and guidelines will direct procurement complaints and appeals.
COMPLAINTS & TENDER DISPUTES
A procuring entity will, after the publication of an award decision — allow a cooling-off period of 10 days in order for the procuring entity to receive and address complaints, if any, from any contractor who is aggrieved by the award decision; and not enter into a contract relating to the award before the expiration of a cooling period.
A contractor who is aggrieved by a breach of any provision of this Act or claims to have suffered or is likely to suffer loss or damages due to a breach of a duty imposed on a procuring entity shall, at the first instance, lodge a complaint before an Accounting Officer for review.
A contractor who lodges a complaint shall have the right to participate in the review proceedings before an Accounting Officer. A contractor who fails to participate in the review proceedings shall be barred from subsequently lodging the same complaint.
Under this proposed Act an Accounting Officer will not entertain a complaint after a contract has entered into force. After considering a complaint and determining that the complaint is a frivolous or vexatious complaint, Accounting Officer shall dismiss such complaint.
Notwithstanding subsection (1), an Accounting Officer may refer a complaint considered and determined to be frivolous or vexatious to the Tribunal for the Tribunal to take any appropriate action as may be prescribed.
An aggrieved person shall submit his or her complaint in writing to an Accounting Officer within 10 days from the date of the publication of an award decision by the Accounting Officer, relating to the complaint.
The Accounting Officer will not entertain a complaint unless it is submitted to him/her within the period referred to under subsection.
A contractor who is aggrieved by a decision of an Accounting Officer may appeal to the Tribunal within 14 days from the date of the decision of the Accounting Officer.
Where a contract has been concluded by a procuring entity, based on an award decision of an Accounting Officer, the contract shall be irrevocable and its execution shall proceed without interruption whether the award decision by the Accounting Officer may in itself remain disputable by a contractor through the Tribunal.
Notwithstanding subsection (5), the Tribunal may suspend and subsequently revoke or terminate the execution of a contract if in the opinion of the Tribunal, sufficient evidence has been adduced to demonstrate that the execution of the contract may cause substantial loss to the public revenue or prejudicially affect public interest.
A complainant who wishes to lodge a complaint shall exhaust the dispute resolution processes provided in this Act before the complainant refers the complaint to a court.
PUBLIC PROCUREMENT TRIBUNAL
The Tribunal will be a body established independently from Public Procurement Regulatory Authority, and shall constitute retired High Court judges or practicing attorneys who qualify to appoint high court judge.
The Tribunal shall adjudicate over any matter brought before it by a complainant for a breach of any of the provisions of this Act, or any appeal brought in accordance with the provisions of this Act.
The COVID-19 pandemic which weakened world economies had left a devastating impact on Botswana Investment and Trade Centre (BITC) existence in 2020. According to the group’s 2019/2020 Annual Report, Foreign Direct Investment (FDI) was sluggish for the first two quarters at P126 million and P426.96 million respectively. They then took an upward trajectory in Q3 and 4 at P1396 million and P1456 million respectively.
The year closed with a reduced performance at 73% for Q4. According to the financial report, export earnings opened the year at 83% which is approximately P671 million, before dropping to 81% (P1299.55 million). However, Quarter 3 experienced a slight rise in performance to 82%, or P1978.42 million before a drop in performance to close Quarter 4 at P74.9%, which was P2403.91 million.
Even if that is the case, the Centre continued to promote local investors by facilitating for local entrepreneurs to produce and find markets for their products both locally and internationally. The trend for Domestic Investment/Expansions indicated a continual upward performance surge from Quarter 1 through Quarter 4.
In percentage points, performance results reflected opening of 93% performance followed by a dip in performance to 82% Quarter 2, and then an increase to 100% in Quarter 3 and closing performance of 84.2% in Quarter 4.
For this financial year under review, BITC posted solid financial results with a surplus of P872.968, representing a decline from the previous year’s surplus of P13.991.337. The Centre started on track from the beginning of the financial year with successful execution of activities planned for the year.
However, following the subsequent onset of COVID-19 in the last quarter for the financial year, a few of the activities were negatively affected resulting from restricted cross border transfers. The impact is expected to be severe in the following financial year, especially on the Centre’s financial statements, clearly reflecting the negative impact of COVID-19.
In the financial year ended March 2020, BITC received a total subvention of P96.504.860 which represents a 5% decrease from the previous year’s subvention of P101.830.560. the Grant subvention received for the past 5 years has not been constant due to the financial constraints that the government has experienced over the years which prompted for alignment of financial resources to cover the Centre’s strategic imperatives.
For the year under review BITC’s annual FDI capital inflows realised stood at P1.456 billion against an annual target of P2 billion, which is largely attributable to more than expected performance from the Financial Services sector. The total Domestic Investment for the period was P875.5 million against the set stretched target of P952 million. The total number of jobs registered by the organisation during the year under review was 3329, against an annual target of 3340.
Notwithstanding that, BITC realised high level achievements for the year under review. Chief Executive Officer Keletsositse Olebile said facilitated to establish the Selibe-Phikwe citrus project, which has a job creation expectation of 1000 vacancies as well as the expansion of Kromberg and Shubert Company through the allocation of land for construction of 7000 square metres factory to manufacture wire harness for Mercedes Benz, with over 800 jobs expected this year.
Further, the Centre continued to deliver improved investor facilitation services to both local and foreign investors through the Botswana one Stop service centre (BOSSC). “BOSSC houses relevant government departments under one roof to provide prompt, efficient and transparent services to investors. The services offered by this Centre have grown from slightly above 130 applications for government authorisation in 2013 to 752 in the year under review,” said Olebile.
BITC continued to monitor Botswana’s performance in global competitiveness indicators such as the World Bank’s ease of Doing Business Index. “In an endeavour to improve the investor facilitation mechanism in the country, we have motivated for the drafting of a Business Facilitation Law, which will expedite the setting up and operations of businesses in Botswana.”
ECONOMIC DIVERSIFICATION DRIVE
BITC continued to respond to government’s call to stimulate direct investment and growth of local companies by procuring goods and services from locally based manufactures and services providers. The message to promote locals to actively grow the national economy has been driven through campaigns such as ‘PushaBW’ which utilised an Integrated Marketing Communications (IMC) approach. As at March 2020, local purchases constituted 84% (2019:85%) of the total procurement with foreign purchases at 16% (2019:15%).