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Botswana: South Africa’s trade partner or economic neo-colony?

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.

Various stats available indicate that the trade between two countries is a one-sided affair, lending credence to Magang’s view that, “In fact so beholden are we to the South African economy we are effectively its neo-colony.” Both countries are former British colonies and members of the African Union, the Commonwealth of Nations and the Southern African Development Community (SADC). The foundation for the trade relationship between South Africa and Botswana dates back to the establishment of the Southern African Customs Union (SACU) in 1910.

South Africa’s Economic Strength

South Africa is the 67 most competitive nation in the world out of 140 countries ranked in the 2018 edition of the Global Competitiveness Report published by the World Economic Forum. Mauritius and SA rank first and second as most competitive economies in Africa. Meanwhile ranks Botswana 90th most competitive economy out of 140 countries.

South Africa’s greatest competitive advantages are its financial system (ranked 18th), market size (35th) and level of innovation (46th) and sound infrastructure with a road connectivity ranking of 5 out of 140 countries, efficiency of clearance policies (34th) meanwhile Botswana fares badly in same areas, due to inadequate infrastructure, for ICT adoption and innovation among others.

According to Ernest Mahlaule, Group Chairman of Gauteng Growth and Development Agency, who is also former President of Johannesburg Chamber of Commerce and Industry, between 2014 and 2018, South Africa and Botswana traded R291.9 billion (about P212.2 billion) with Botswana receiving R 263.8 billion (P191.8 billion) worth of goods and services from South Africa, whilst South Africa received R 28.2 billion (P20.5 billion) worth of goods and services from Botswana.

“During the period under review South Africa enjoyed a trade surplus of R 235.7 billion. However, trade between the two countries has been muted, growing at a compound annual growth rate of 1.1 per annum since 2014,” Mahlaule told conference delegates at South Africa-Botswana Business Forum, which was part of the just ended Global Expo.

“Over the same period, 2014 and 2018, Gauteng and Botswana traded R169.4 billion. Botswana received R 152.0 billion worth of goods and services from Gauteng, whilst  the  City  region  received  R  17.4  billion  worth  of  goods  and  services  form  its  SACU neighbour.”
During the period under review Gauteng enjoyed a trade surplus of R 134.6 billion. However,  trade  between  the  two  regions  has  been  muted,  growing  at  a  compound annual growth rate of 1.3  percent per annum since 2014, according to Mahlaule.

“It is worth noting  that  the Gauteng city  region accounts for 62.1 percent of all Botswana bound SA  exports  and  similarly    57.6  percent of  Botswana  sourced imports  are bound for Gauteng. Gauteng exports mainly Mineral Fuels, advanced machinery and vehicles to Botswana. Botswana exports mainly Precious stones and inorganic chemicals to Gauteng.

Mahlaule stated that, since 2014, South African companies have invested R 2.1 billion (P1.5 billion) in Botswana generating 497 direct jobs. Gauteng accounts for 81 percent of SA FDI into Botswana. Notable companies who have invested in Botswana since 2014 include Carrick Wealth, Standard Bank, and Open House Management. While Botswana has mandated Botswana International Trade Centre (BITC) to lure investors to set-up in Botswana, another mandate entails promoting and facilitating the promotion of locally manufactured goods to foreign markets.

Mahlaule believes Gauteng present a better business climate for Botswana ventures to set-up in South Africa. Already, owing mainly to the proximity of the Gauteng to Botswana, and its economic strength, Botswana has developed a good trade relationship with the region. The Gauteng province is home Pretoria, the capital city of South Africa, as well as Johannesburg, the country’s largest city. Gauteng City Region is home to a quarter of South Africa’s population and generates 35 percent of the country’s GDP.

The concentration of national population and growth makes the Gauteng City Region pivotal to the national agenda of Transformation, Modernisation and Re- Industrialisation. Between 2014 and 2018 exports of goods and services from Gauteng, accounted for 55 percent of total exports into South Africa. Over the same period Imports amounted to 65 percent of total goods and services imported into South Africa. Total trade in the province was approximately 87 percent of the total provincial GDP. Highlighting more accentuated trade openness relative to the whole country.

During the Global Expo, Botswana’s Minister of Investment, Trade and Industry, Bogolo Kenewendo indicated that Botswana wants to work closely with the Emerging Markets as they want to learn from them strategies of economic transformation which is Botswana’s aspiration for the next 10 years. “We also want to industrialise our economy and leap-frog into Fourth Industrial Revolution, which will require new markets for our new products and sourcing of intermediate inputs and raw materials. Emerging Markets will provide us with such opportunities,” said Kenewendo.

Kenewendo, who assumed the reins as Minister of Investment, Trade and Industry last year at the beginning of April in 2018, indicated that as part of efforst to lure investors to Botswana, government has made efforts to improve its doing business environment through reforms of business processes and legal framework. “We are also in the process of improving our regulatory framework through the implementation of the Better Regulation Strategy to introduce Impact Analysis that will ensure that laws introduced have positive impact rather than introduce bottlenecks,” she said. 

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Woman swindled out of P62 000 by fake CID officers

17th June 2021
Motube

Botswana Police Service (BPS) has indicated concern about the ongoing trend where the general public falls victim to criminals purporting to be police officers.

According to BPS Assistant Commissioner, Dipheko Motube, the criminals target individuals at shopping malls and Automated Teller Machines (ATMs) where upon approaching the unsuspecting individual the criminals would pretend to have picked a substantial amount of money and they would make a proposal to the victims that the money is counted and shared in an isolated place.

“On the way, as they stop at the isolated place, they would start to count and sharing of the money, a criminal syndicate claiming to be Criminal Investigation Department (CID) officer investigating a case of stolen money will approach them,” said Motube in a statement.

The Commissioner indicated that the fake police officers would instruct the victims to hand over all the cash they have in their possession, including bank cards and Personal Identification Number (PIN), the perpetrators would then proceed to withdraw money from the victim’s bank account.

Motube also revealed that they are also investigating a case in which a 69 year old Motswana woman from Molepolole- who is a victim of the scam- lost over P62 000 last week Friday to the said perpetrators.

“The Criminal syndicate introduced themselves as CID officers investigating a case of robbery where a man accompanying the woman was the suspect.’’

They subsequently went to the woman’s place and took cash amounting to over P12 000 and further swindled amount of P50 000 from the woman’s bank account under the pretext of the further investigations.

In addition, Motube said they are currently investigating the matter and therefore warned the public to be vigilant of such characters and further reminds the public that no police officer would ask for bank cards and PINs during the investigations.

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BCP walks out of UDC meeting

15th June 2021
Boko and Saleshando

Botswana Congress Party (BCP) leadership walked out of Umbrella for Democratic Change (UDC) National Executive Committee (NEC) meeting this week on account of being targeted by other cooperating partners.

UDC meet for the first time since 2020 after previous futile attempts, but the meeting turned into a circus after other members of the executive pushed for BCP to explain its role in media statements that disparate either UDC and/or contracting parties.

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Katlholo wins against DPP

15th June 2021
DCEC DIRECTOR: Tymon Katlholo

The Director General of the Directorate on Corruption and Economic Crimes (DCEC), Tymon Katlholo’s spirited fight against the contentious transfers of his management team has forced the Office of the President to rescind the controversial decision. However, some insiders suggest that the reversal of the transfers may have left some interested parties with bruised egos and nursing red wounds.

The transfers were seen by observers as a badly calculated move to emasculate the DCEC which is seen as defiant against certain objectionable objectives by certain law enforcement agencies – who are proven decisionists with very little regard for the law and principle.

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