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Gaolathe,Matambo in clash of ideas

Deputy Leader of Opposition in parliament, Ndaba Gaolathe has broken ranks with his admirer, Minister of Finance and Economic Development, Kenneth Matambo over the role of government in job creation.

Matambo has in numerous times made no secret of his admiration of Gaolathe’s keen mind and talents in relation to matters of economics. The latter was schooled at the Ivy League Wharton School of Economics at the University of Pennsylvania in USA. He shares his alma mater with billionaire businessmen such as US president, Donald Trump, Russian-American venture capitalist, Yuri Milner and South African-American billionaire, Elon Musk among others.

Nonetheless, the two economists; Matambo and Gaolathe, on opposing sides of the isle differ on the role and modus operandi of government in job creation. When delivering the National budget this week, Matambo untangled government from the conundrum of job creation, stating and repeating that: “it’s important to clarify that the principal role of government is not to create jobs but to create a conducive macroeconomic environment to facilitate the development of the private sector.”

Matambo noted that as a general principle, economic development and employment creation require rapid economic growth. He further noted that, however, during NDP 10 Botswana’s economy grew on average by about 3.8 per cent. Matambo further revealed that the economy is forecast to grow at an average of 4.4% per annum in NDP 11; a rate he said, is lower than the 7 to 9 per cent of the early 1980s or the SADC regional target of 5 per cent.

He also conceded that “such rates are therefore not sufficient to adequately address development challenges of unemployment, poverty eradication, and income inequality.” Matambo further highlighted that after it is all said and done, it is then for the private sector to take advantage of such an environment to undertake investments, which would contribute to the growth of the economy and create sustainable employment opportunities.

However, in an opposition rejoinder delivered by Gaolathe this Wednesday, the opposition position stood in stark contrast with that of the current government with regards to the extent of governments in the role of job creation. Gaolathe stressed that a small economy such as Botswana needs to do more than just relegating employment creation and economic diversification to the realm of private sector. He further expressed cynicism on the ability of the private sector to be left largely to its own devices.

Stated Gaolathe: “Our idea is that a small country of Botswana’s population and economic history cannot leave it to the markets to diversify the economy or ignite sustainable job creating economic sectors.” He continued: “The notion that government’s role is simply to create an environment in which the entrepreneurial and commercial spirit can thrive is not adequate.”

The American educated politician further stated that other countries have directly participated in employment creation, highlighting that, “most capitalist states do invest in strategic sectors in the same way the United States has invested in Freddy Mae and Freddy Mac”.
 “Dubai has also successfully run Istithma or Dubai World, the holding company that has invested successfully in non-stock market companies domestically and abroad.” he intoned.

Gaolathe further gave example of an Asian tiger country that has made leaps in direct job creation, noting that: “Singapore also invests its surpluses in and out of Singapore, whose proceeds not only augment government revenue but pay for various social services for citizens.” He further noted that these funds or companies are numerous and are funded through compulsory social security contributions. “Some of the dividends are used to finance the high quality public services including health-care.”

Gaolathe, who is also one of two deputies of Umbrella for Democratic Change coalition, further remarked that apart from government driven investment vehicles, the coalition’s view is that government should sustain a well-coordinated and adequately capitalised ecosystem of public enterprises that support Botswana’s social and economic objectives. He drew parallels between government’s word in regard to job creation and its practice, observing that despite the Botswana government’s stated posture that it is not the role of government to invest in enterprise, its involvement in Debswana is evidence to the contrary.

He further stated that, in recent times, government has reportedly established a series of private companies including Botswana Oil and Mineral Development Company with the intention of making strategic investments but the guidelines of management remain unclear, “breeding real fears that these could be funnels for financial leakage in favour of the political elite.”  

Gaolathe further revealed that in 2019, if UDC wins elections, they will propose the establishment of a system of special sector funds to make capital available and attract technical skills to the sectors that are potential economic engines including mineral beneficiation, agriculture as well as meat products and services.

He further argued that the current funding ecosystem that includes CEDA and BDC has to date not created jobs and the scale of industry required to lift Botswana from its unemployment and economic quagmire. “It is strange that the employment and industry targets of these major entities are not known.” he observed.

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Over 2 000 civil servants interdicted

6th December 2022

Over 2,000 civil servants in the public sector have been interdicted for a variety of reasons, the majority of which are criminal in nature.

According to reports, some officers have been under interdiction for more than two years because such matters are still being investigated. Information reaching WeekendPost shows that local government, particularly councils, has the highest number of suspended officers.

In its annual report, the Directorate on Corruption and Economic Crime (DCEC) revealed that councils lead in corrupt activities throughout the country, and dozens of council employees are being investigated for alleged corrupt activities. It is also reported that disciplined forces, including the Botswana Defence Force (BDF), police, and prisons, and the Directorate of Intelligence and Security (DIS) have suspended a significant number of officers.

The Ministry of Education and Skills Development has also recorded a good number of teachers who have implicated in love relationships with students, while some are accused of impregnating students both in primary and secondary school. Regional education officers have been tasked to investigate such matters and are believed to be far from completion as some students are dragging their feet in assisting the investigations to be completed.

This year, Mmadinare Senior Secondary reportedly had the highest number of pregnancies, especially among form five students who were later forcibly expelled from school. Responding to this publication’s queries, Permanent Secretary to the Office of the President Emma Peloetletse said, “as you might be aware, I am currently addressing public servants across the length and breadth of our beautiful republic. Due to your detailed enquiry, I am not able to respond within your schedule,” she said.

She said some of the issues raised need verification of facts, some are still under investigation while some are still before the courts of law.

Meanwhile, it is close to six months since the Police Commissioner Keabetwe Makgophe, Director General of the Directorate on Corruption and Economic Crime (DCEC) Tymon Katlholo and the Deputy Director of the DIS Tefo Kgothane were suspended from their official duties on various charges.

Efforts to solicit comment from trade unions were futile at the time of going to press.

Some suspended officers who opted for anonymity claimed that they have close to two years while on suspension. One stated that the investigations that led him to be suspended have not been completed.

“It is heartbreaking that at this time the investigations have not been completed,” he told WeekendPost, adding that “when a person is suspended, they get their salary fully without fail until the matter is resolved”.

Makgophe, Katlholo and Kgothane are the three most high-ranking government officials that are under interdiction.

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Masisi to dump Tsogwane?

28th November 2022

Botswana Democratic Party (BDP) and some senior government officials are abuzz with reports that President Mokgweetsi Masisi has requested his Vice President, Slumber Tsogwane not to contest the next general elections in 2024.

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African DFIs gear to combat climate change

25th November 2022

The impacts of climate change are increasing in frequency and intensity every year and this is forecast to continue for the foreseeable future. African CEOs in the Global South are finally coming to the party on how to tackle the crisis.

Following the completion of COP27 in Egypt recently, CEOs of Africa DFIs converged in Botswana for the CEO Forum of the Association of African Development Finance Institutions. One of the key themes was on green financing and building partnerships for resource mobilization in financing SDGs in Africa

A report; “Weathering the storm; African Development Banks response to Covid-19” presented shocking findings during the seminar. Among them; African DFI’s have proven to be financially resilient, and they are fast shifting to a green transition and it’s financing.

COO, CEDA, James Moribame highlighted that; “Everyone needs food, shelter and all basic needs in general, but climate change is putting the achievement of this at bay. “It is expensive for businesses to do business, for instance; it is much challenging for the agricultural sector due to climate change, and the risks have gone up. If a famer plants crops, they should be ready for any potential natural disaster which will cost them their hard work.”

According to Moribame, Start-up businesses will forever require help if there is no change.

“There is no doubt that the Russia- Ukraine war disrupted supply chains. SMMEs have felt the most impact as some start-up businesses acquire their materials internationally, therefore as inflation peaks, this means the exchange rate rises which makes commodities expensive and challenging for SMMEs to progress. Basically, the cost of doing business has gone up. Governments are no longer able to support DFI’s.”

Moribame shared remedies to the situation, noting that; “What we need is leadership that will be able to address this. CEOs should ensure companies operate within a framework of responsible lending. They also ought to scout for opportunities that would be attractive to investors, this include investors who are willing to put money into green financing. Botswana is a prime spot for green financing due to the great opportunity that lies in solar projects. ”

Technology has been hailed as the economy of the future and thus needs to be embraced to drive operational efficiency both internally and externally.

Executive Director, bank of Industry Nigeria, Simon Aranou mentioned that for investors to pump money to climate financing in Africa, African states need to be in alignment with global standards.

“Do what meets world standards if you want money from international investors. Have a strong risk management system. Also be a good borrower, if you have a loan, honour the obligation of paying it back because this will ensure countries have a clean financial record which will then pave way for easier lending of money in the future. African states cannot just be demanding for mitigation from rich countries. Financing needs infrastructure to complement it, you cannot be seating on billions of dollars without the necessary support systems to make it work for you. Domestic resource mobilisation is key. Use public money to mobilise private money.” He said.

For his part, the Minster of Minister of Entrepreneurship, Karabo Gare enunciated that, over the past three years, governments across the world have had to readjust their priorities as the world dealt with the effects and impact of the COVID 19 pandemic both to human life and economic prosperity.

“The role of DFIs, during this tough period, which is to support governments through countercyclical measures, including funding of COVID-19 related development projects, has become more important than ever before. However, with the increasingly limited resources from governments, DFIs are now expected to mobilise resources to meet the fiscal gaps and continue to meet their developmental mandates across the various affected sectors of their economies.” Said Gare.

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