Ministry of Youth Empowerment, Sports and Cultural Development (MYESC) last week Tuesday signed a memorandum of agreement (MOU) with the Companies and Intellectual Property Authority (CIPA) for a partnership that will harness ease of doing business amongst Botswana’s youth. The agreement is expected to benefit and promote services delivery for both MYESC and CIPA.
Established in 2011 by an act of parliament, CIPA’s mandate is to register businesses and protect intellectual property rights, promoting and enabling rights of investors and rights holders. Through the partnership, the Authority wants to realise easy access of their services. Under the agreement CIPA will use MYESC offices countrywide to disseminate their much needed services which include mainly registration of business and company formation.
CIPA observes that the MOU will go a long way into complementing their 2020 vision of having Botswana as a business and investment attractive place. According to Paul Conductor Masena, Register General at CIPA, his organization has a mandate to create a conducive business environment by making business registration services more accessible to entrepreneurs.
“It is essential for CIPA to collaborate with key stakeholders such as MYESC to harness their competitive advantage in order to contribute positively to the ease of doing Business in Botswana,” he said. Masena observed that MYESC and CIPA services complement each other as far as unearthing vocational & creative business opportunities are concerned. “MYESC will be economically empowering young people through funding and capacity building and CIPA will be ensuring that intellectual properties & technical business ideas are protected,” he said.
From a MYSEC point of view the partnership will augment the ministry and enhance its mandate to administrate and dispense the 120 million pula Youth Development Fund. The Ministry of Youth which also has the mandate of cultural development sees the agreement as a milestone in protecting intellectual formations, properties, ideas from the cultural, native and creative industries.
According to the Permanent Secretary at the Ministry Kago Ramokate, the youth will easily access business start up and company formation services which are all prerequisites to benefiting from the Youth Development Fund. Ramokate noted that participation of youth in businesses and entrepreneurial undertakings creates employment and grows the economy.”
“The agreement will facilitate dialogue and more engagement on further amendments that can be made to improve service delivery as far as business registration is concerned, it’s a complementation, we need CIPA to register businesses and protect intellectual properties and we fund, develop and capacitate the ideas into live entities that empowers young people and creates employment,” said Ramokate.
Hilda Mocuminyane also from CIPA added that shortage of facilities in government departments and parastatals was a hindrance to effective service delivery thus departments and parastatals who offer complementing services to the same clientele must cooperate to take services to Batswana. “We also at CIPA are not an exception from shortage of resources due to budgetary constraints thus we saw it fit to collaborate with MYSEC to enhance our mandate delivery.
P20 MILLION TO 24 CREATIVE ENTREPRENEURS
The Memorandum of Understanding between CIPA and MYESC comes after CIPA Levy on Technical Device Fund (LTDF) dispensed over 20 million pula two weeks ago to resource the creative industry. A total amount of P20 269 684.14 was awarded to 24 beneficiaries from the creative industry only. Speaking at the unveiling ceremony in Gaborone a fortnight ago CIPA executives noted that the grant was awarded to winning creative proposals which seek to create employment and improve the local arts and creative industry.
Sponsored projects include Book publishing, film production, music, photography and art amongst others in the creative industry that can be protected by copyright. Other projects include capacity building projects and those that aim to diversify and improve the quality of the creative industries in Botswana.
One of the beneficiaries includes Elton G P Seleka who was granted over P800 000 to create Botswana’s first ever animated cartoons. The MOU between CIPA and Ministry of Youth signed this past Tuesday is observed to have come at the right time for both government entities who seek to empower mostly young people who account for the largest portion of Botswana’s population and are also affected highly by unemployment.
In a bid to empower young people even more and harness entrepreneurship amongst the youth, it is anticipated that government will soon introduce the innovation fund which seeks to grant start-up capital to young people who propose to come up with well researched groundbreaking innovative entrepreneurial undertakings that are geared at solving national challenges and also augment economic growth. This came to light at a Youth Pitso in Tlokweng recently when Minister of Tertiary Education, Research, and Science & Technology addressed attendants.
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”