Botswana Innovation Hub (BIH) has expressed contentment with the recent ministerial realignments. Officials from the parastatal have said the development which essentially means that they are now under the new Ministry of Tertiary Education, Research, Science and Technology will fertilise their delivery ground.
In an interview this week, Tigele Mokobi, a Public Relations Executive at BIH said that being under the new ministry; BIH has positive anticipations of executing their mandate.
Under President Lt Gen Dr Ian Khama’s newly redesigned ministries, Research, Science and Technology departments, formally at Ministry of Infrastructure Science and Technology have been moved to the Ministry of Tertiary Education (Research, Science and Technology) and will be headed by Dr. Alfred Madigele, formerly deputy Minister of Health.
According to Permanent Secretary to the President, who is also Secretary to Cabinet and Head of Public Service, Carter Morupisi in a statement at the time, “the Ministry of Tertiary Education, Research, Science and Technology will handle policy on student financing, tertiary institutions, as well as coordinate research, science and technology development to transform Botswana into a knowledge based economy, while producing graduates that are relevant to industry requirements.”
BIH is building the country’s first Science and Technology Park that will offer a unique platform for scientific, technological and indigenous knowledge-based innovation, and according to Mokobi , directly having tertiary education on board under one administrative ministry will go a long way in catalyzing their (BIH) quest of an innovative and technologically knowledge based economy.
“The national innovation ecosystem that emerges from these efforts will add value to resident companies, foster entrepreneurship and technology transfer that diversifies the economy and generates knowledge-based jobs,’’ deliberated Mokobi.
“Botswana Innovation Hub does not necessarily have to make adjustments because its mandate is to do with facilitating commercialization of research and development coming from tertiary education institutes among others, so we will just sail through into continuing with our assignment as a company accountable to government. In our former ministry we were still under the department of Science and technology anyway,” explained the innovation hub mouthpiece.
Botswana Innovation Hub also rubbished concerns of budgetary constraints and possible financial struggle under the new ministry. Critics have said that key institutions like BIH and BITRI that are mandated to transform Botswana economy into a science and research knowledge based economy will now be competing for funds with cash strapped Department of Tertiary Education Financing (DTEF).
“Botswana Innovation Hub has a different business and funding model which is far from the financial scope of tertiary education funding and sponsorships. This is significantly reliant on commercial cost recovery for services offered such as property rental, ICT services, incubation, and Intellectual Property (IP) advisory and the Science and Technology Park itself. In instances where there is no funding, government funding will be sought through mechanisms such as the innovation fund,’’ deliberated BIH’s Finance department.
For his part Botswana Innovation Hub Chief Executive Officer, Allan Boshwaen told Weekend Post that Botswana Innovation Hub remains a central component of the national system of innovation which links academia, industry and the public sector through facilitation of new innovative solutions that are common to the sectors and growing national IP and its value. According to Boshwaen, the critical role presented by the company’s flagship entrepreneurship development program, First Steps Venture Centre (FSVC) becomes even more relevant in stimulating entrepreneurship at University level.
“It is important to state that Botswana Innovation Hub occupies a special niche where it facilitates Research and Development through specialized infrastructure and equipment to be located in the Park. The critical role of commercialization of IP generated from academic and research institutes shall be placed in the National Technology Transfer Office which will showcase these innovations in the Park for entrepreneurs and investors to take into the commercial domain,’’ concluded Boshwaen.
Botswana intends to develop world class graduates that are aligned to industry needs in order to counter the current skills mismatch and graduate unemployment, the new ministry is set to help see that achievement through. Botswana‘s all time human resource and education benchmark, Mauritius has been using this ministry model for years and has output great accolades and human resource development achievements for the Indian ocean island which translated to one of the fast growing knowledge based economies in the world . Human Resource Development Agenda which formed Human Resources Development Centre, now Botswana Qualifications Authority are some of the transformations drawn from the Mauritanian education system.
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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”