Former cabinet minister and business magnate, Charles Tibone has warned that the ruling Botswana Democratic Party (BDP) faces real danger of losing power if there is continued failure by government to inspire private sector growth and economic diversification.
Speaking at the Annual Grant Thorn Private Business Growth Awards held in Gaborone this week, Tibone said government can no longer afford to allow the diversification nut to go on un-cracked for much longer if it is to remain in power.
“Theoretically, if a government fails to diversify the economy to a point where this becomes a national concern, people can vote it out of power,” warned Tibone.
“But if the private sector fails to grow their business to a point where that becomes a national concern, the economy collapses. That is worse than being voted out of power. ”
Tibone, who served as Minister of Minerals, Energy and Water Resources under President Festus Mogae’s tenure, stated that government’s dominance in most sectors has proved to be a hindrance for high economic growth rates.
Tibone further observed that the trend further compromises positive investment ratings and leads to increased unemployment and failure to diversify the economy.
“We have received enough warnings about the need to find alternatives to diamonds as the mainstay in our economy. That matter is urgent,” he said.
The former Tati West legislator remarked that Botswana has received accolades on conditions which would ordinarily make the country’s economy grow.
“As a people, we are exceptionally peaceful. This was confirmed by Ban KI Moon [United Nations Secretary General] at our BOT50 celebration in New York. On corruption we are ranked lowest in Africa. The Mo Ibrahim index ranks us high. Yet all these good attributes do not translate into a tailwind that propels growth and diversification of the economy,” he said.
“Last year we nearly ended the recession at 0.3 percent growth rate. This year 3.6 percent expected. And for next year 4.6 percent, these are not robust growth rates. Rwanda and Tanzania are able to achieve 6 percent, why can’t we?”
Tibone further advised that government does away with some public enterprises which are dampening the potential of growth in the private sector in some businesses.
“What is even more concerning is that the majority of these parastatals businesses are chronically unprofitable. They operate on negative returns on investment or on life support from Government through subsidies,” he said.
“A case can be made for parastatals that provide a social service like Water Utilities Corporation (WUC) or those which regulate sectors such as Botswana Communication Regulatory Authority (BOCRA) or Civil Aviation Authority (CAAB).”
Tibone does not see any reason for government to continue keeping public enterprises which have become weak after being owned by government for decades.
“One may ask; do we really need a national airline? Have we not done enough to demonstrate that passenger traffic exists? Nigeria, The United States of America, Hong Kong and many other countries do not have national airlines and yet traffic into these states remains strong,” he said.
“Is it vital that National Development Bank (NDB), Botswana Development Corporation (BDC), Botswana Savings Bank (BSB) and Botswana Meat Commission (BMC), to mention just a few, should continue to be Government owned?”
Tibone, who resigned as Assistant Minister of Finance in 2011, and left his law making position in 2014, argued that if compared, growth profiles of the BDC and BIHL, both of which are in property and financial services, among other investments, one will notice that one zigzags up and down while the other has an upward trajectory.
“It will not be difficult to guess which one is parastatal,” he said.
“Massive injection of state resources into that entity has not guaranteed growth. This evidence therefore leads one to the observation that there is a distinct prospect that the privatisation of a number of Government parastatals would not simply lead to quantitative growth of our private sector but possibly a dramatic transformation of our economy.”
According to Tibone, most countries that have experienced phenomenal economic growth have acknowledged that encouraging private sector growth is an imperative.
Tibone said there is a culture of making right policy pronouncements about private enterprise but on the ground, the country has failed to resist the gravitation pull of welfare state programs.
He said this is understandable since Botswana comes from a background where everything had to be initiated by Government.
“But the economic circumstances we are now in require that we should rapidly transition ourselves from welfare state into a truly private sector led economy. This will mean that we have to accelerate the privatization of parastatals,” he said.
“For over two decades we have been talking privatization. But not much has happened. Yes when we started there was no urgency because we still had budget surpluses. Things have changed. Budget deficits over 4 percent of GDP are projected.”
Tibone is of the view that government should disinvest from certain sectors, as it heads to privatisation and possibly listing on the Stock Exchange, which will provide necessary revenue to finance deficits.
He also said there are vast opportunities in agriculture as well as information technology, which he said, if harnessed properly, could create thousands of jobs.
“I was impressed to learn that some of the major retailers in the country have given suppliers of agricultural produce a commitment to buy all their production before turning to outside suppliers. This reduces the risk to the farming entities significantly and creates opportunities,” he expressed.
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.
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.
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.