The tourism sector has experienced remarkable and phenomenal growth in the past decades, and together with its enabling ecosystem, has contributed over 10% to global GDP and accounted for 1 in 10 jobs on the planet.
This was revealed by Dr Raphael Dingalo, the Chief Executive Officer of the Human Resource Development Council (HRDC), during the Hospitality and Tourism Association of Botswana (HATAB) Conference 2017 held in Kasane from the 27th to 28th April. Presenting on the topic ‘Building The Future of The HR Capital in The Tourism Industry for Economic Diversification’, Dr Dingalo noted that the 2017 Travel and Tourism Index has established that “Travel and Tourism remains mostly untapped” highlighting that air connectivity, travel costs, visa policies and infrastructure remain a challenge. “While tourism in the region is mainly driven by natural tourism, there is significant room for improvement in protecting, valuing and communicating cultural richness.”
On the basis of the aforesaid, he implored stakeholders to aggressively move in these areas and address the identified challenges so that Botswana improves on its current rating in the Travel and Tourism Index 2017. Botswana stands at position 85 out of 136, and it is possible and probable to attain the no 1 ranking. By addressing these issues, and improving on the rankings, the Tourism industry will contribute much more to economic growth and in turn to employment creation which the Country so desires.
As part of improving on the ratings, Dr Dingalo called upon stakeholders in the Tourism Sector to constantly converse and follow through the policy cycle. Key imperative in the policy cycle remains “evaluation” of the existent policies and assessing them against the “fit-for-purpose” criteria. “The fit-for-purpose” criteria entails subjecting them to the effectiveness and impact test” he pointed out arguing that in some instances we do have defunct policies that impede on the growth of the Sector. This is also considering that the Tourism sector has spill overs in other sectors, namely: Transport, retail, creative industries, financial sector etc.
Turning on to human capital development, Dr Dingalo pointed out that “HRDC seeks to engage stakeholders within the Tourism Sector in the development of the National Human Resource Development Planning (NHRDP). The NHRDP will serve as a tool to be used in planning for the supply and demand of the human capital to support economic and social development and enhance the competitiveness of the country. This entails amongst other things, an examination of the demand for human resources by the productive and service sectors and the extent to which the educational institutions are able to meet the demand.
Stakeholders who attended the HATAB Annual Conference were also informed that HRDC in currently promoting Workplace Learning by reimbursing levy payers the costs of training their citizen employees. The aim in promoting Workplace learning is to increase the quality of work based training for improved service delivery.
The system ensures that there is partnership with industry in getting the right quality skills to employees. “The areas of training that industry is benefiting from the Training levy entails the following amongst others: customer service, front desk office, basic food hygiene, hospitality operations etc. And these are of direct benefit to the tourism industry”, Dr Dingalo pointed out.
Participants were furthermore informed that HRDC’s eminent and direct support for the tourism sector entailed contributing financially (P388,500.00) towards the Recognition of Prior Learning (RPL) assessment for the professional tour guides by Botswana Qualifications Authority (BQA). “This we did together with our sister organisation BQA, whereas they also contributed same”.
In his concluding remarks, Dr Dingalo called on all the stakeholders to develop keen interest and participate in the drawing up of the National Human Resources Development Plan, which if all goes well, will commence around May/June running for about a year. Levels of priority areas in the NHRDP will entail: Trades and Crafts, Artisans and Technicians, Professionals and Managers, and Researchers.
The HATAB Conference provides a platform for dialogue amongst the public and private sector including leadership to engage and share information on tourism development and challenges. This year’s theme is “The role of tourism sector in expanding economic opportunity in Botswana”. His Honour the Vice President of the Republic of Botswana Mr Mokgweetsi Masisi officially opened the Annual Conference, whilst Ms Thembi Kunene, the Tourism Executive from Cape Town Tourism delivered the Keynote Address.
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.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
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”