In the earlier volume, I somewhat rapped manufacturing on the knuckles. Does it follow that it is now a futile proposition as a basis for future development? Some pundits, who include a few of Botswana’s most notable economists, have averred so.
They maintain that having tried manufacturing for the past 30 to 40 years and without seeing it come into flower, there is every reason to read the last rites and devote our energies to more realistic prospects, services for instance. I retain very strong reservations on this take notwithstanding my own, lingering misgivings.
In the first place, the fact that a strategy does not yield the desired results does not necessarily imply it is inherently vain or flawed. The problem might not lie with the strategy itself but with the manner in which it was executed. The strategy could also be hobbled by the absence or impotence of the confluence of factors necessary to make it bear fruit. Let us take a Formula One ace as an analogy.
Mercedes may provide Lewis Hamilton with the fastest and most reliable car, but if he does not have mastery of the car or is so impetuous as to lack a sense of caution, he will be prone to accidents or off-track spins and pole position will frequently elude him in the qualifiers, thus seriously curtailing his chances of winning races.
Hamilton may also be a brilliant driver himself, but if the Pirelli tyres his team chose are ill-suited to the prevailing conditions or the pit-stop calls are out of kilter, he will be hard put to romp to victory.
At the time of writing, our import bill stood at P38 billion, equivalent to about $5 billion. Somebody has scoffed that Botswana imports everything save for meatstuffs! And when we do import, we pay not in our own currency but in the so-called hard currencies, primarily the US dollar, a medium of international exchange we toil to earn.
Over 17 percent of our import bill falls to machinery and equipment. Given that we have a capital intensive spearhead sector in diamond mining and we have neither the capacity nor the expertise to manufacture sophisticated pieces of machinery and electrical equipment, this component of our imports was probably preordained: it is here to stay, particularly that Government has done negligibly little to alter the status quo.
But there are these other items classified in the national accounts as “Chemicals and Rubber Products”, “Metals and Metal Products”, and “Other”: these together account for about 22 percent of the import tab. If we were to produce them on our own turf, we would trim over P8 billion, or $1.15 billion, from our import liability. Much of this money, needless to say, would be spent within the local economy.
The gist of my contention, folks, is that we cannot completely jettison manufacturing. Are we, like most of Africa, condemned to a nation of mere consumers and not producers I wonder? A Chinese roving journalist was surprised to learn that up to 90 percent of the Vuvuzelas, the long, plastic trumpets which aroused so much controversy during the 2010 soccer World Cup in South Africa and which have practically become the sound of Africa, were made in China and this is a fad modelled on the traditional African kudu horn used to alert neighbouring villagers! It is estimated that Chinese exporters raked in $20 million of Vuvuzela revenues in that year alone.
In his diatribe against his own race vexatiously titled Capitalist Nigger, the US-Based Nigerian journalist Chika Onyeani sneers that we, Africans, are “‘highly educated’, yet we cannot even assemble a bicycle – we have to import it; we cannot assemble a radio – we have to import it; we cannot assemble a fan – we have to import it; we cannot assemble a television – we have to import it.” If he were writing in 2010, Onyeani probably would have added that we Africans are “Vuvuzela crazy, yet we cannot even make a crude imitation of this ruddy, uncomplicated plastic horn!”
Those who advocate sidelining manufacturing may as well say we should forget about beneficiation considering that besides cutting and polishing gem diamonds, it also entails jewellery manufacturing. I contend that there is a great deal of potential in manufacturing even for an economy as modest as ours folks.
Besides presenting an opportunity to significantly accelerate the country's growth and development, a platform of manufacturing provides a locus for stimulating the growth of other activities, such as services, and achieving specific outcomes, such as employment creation and economic empowerment.
In neighbouring South Africa, for instance, the manufacturing sector in 2013 contributed 15.2 percent of GDP, three times more than mining and quarrying, and employs 1,7 million people5, again more than three times that of the mining and quarrying sector. If we were to nurture a manufacturing prowess on the magnitude only of South Africa’s, we would, with our population of only 2 million, have zero employment folks.
(Excerpt from Chapter 15, Pages 376-378) lifted from Volume 2 of the book – Delusions of Grandeur
Newly established wholly indigenous citizen owned retail chain Payless Retail (PTY) Ltd is set to partake in the first session of Botswana Stock Exchange (BSE)’s Tshipidi Mentorship Program (TMP) on Monday June 29th.
The TMP aims to train and capacitate SMEs so they can operate as corporates and eventually list on the local bourse. According to local bourse, BSE, the program aims to provide practical training to potential issuers through a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.
Payless Retail is a newly established supermarket chain whose mission is to become a convenient one-stop shopping destination as it is one of the Botswana oldest retailing brands. It started off as Corner Supermarket in January 1976, and to date boasts of nine stores in, among others, Gaborone, Mochudi, Molepolole and Tlokweng. Payless was recently acquired by Ellis Retail Group, which is led by businessman Elliot Moshoke.
The takeover catapulted Ellis Retail to the envious position of being the first wholly indigenous owned major retail chain. “We jumped at this opportunity because it gave us a chance to prove to Batswana that the retail business is open and lucrative.”
The objective is to create a proudly Botswana retail chain that fully supports our national Vision, economic development and citizen economic empowerment ambitions,” Moshoke told BusinessPost.
He further emphasized that Batswana are capable and able to run large scale businesses hence they need to accept invite foreign investors who will come in to support us not take the business. “Our win as Payless in the Fast Moving Consumer goods (FMCG) industry is a win for Batswana. We need their support in this difficult and challenging journey.
As you are aware, Payless is the only retail chain in the hands of Batswana ba Sekei. We need to take advantage of this to generate employment and create small businesses in retail and Agri businesses,” he explained.
The retailer has also partnered with Botswana Investment & Trade Center (BITC) on their #PushaBW campaign with a view to initiating earnest engagement with local producers to iron out bottlenecks and ensure seamless trading.
“Local producers have to be part of the phenomenal growth of the Payless brand. This will in turn facilitate employment creation and economic growth. We did this because we have the utmost respect for local manufacturers and producers,” he mentioned.
Payless is currently restocking all of its stores; a development that Moshoke says is testament to the retailer’s commitment to growing the brand and ensuring continuity of business. He further revealed that renowned retail suppliers like PST and CA Sales have reignited their trust in Payless, opening their doors for Payless as they have faith in the retailer’s new owners.
The takeover has reportedly saved more than 200 jobs and gave a new lease of life to the previously fledging Payless brand. According to a press release from the management team, the Payless work forces are also extremely excited about what the future holds. The TMP is a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.
The program is administered by experts within the listing ecosystem and seeks to bring the potential issuers closer to the listings advisers, investors and leaders of already listed companies. “As a strategic initiative, the BSE decided to set up this mentorship program in a bid to assist SMEs to strategize, corporatize and acclimatize in order to list to access equity finance and expand operations,” said the BSE.
The TMP will avail to SMEs practical insights, knowledge and feedback from institutional investors, increased awareness of the BSE listing requirements as well as an intimate network of advisors and CEOs of listed companies. After training, Payless will graduate with improve governance structures and better knowledge of articulating its business strategy. The retailer will also gain increased visibility through BSE marketing platforms.
Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.
In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.
The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.
With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.
Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.
BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.
During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.
BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.
As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.
In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.
BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.
The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.
BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.
Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.
According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).
With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.
In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.
Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.
The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.
The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.
The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.