Botswana is among African countries that continue to experience a severe decline in rankings as an attractive tourist destination, a recent tourism survey has indicated.
Although the tourism sector is now reported to have become the second biggest revenue earner for the country, and the country continues to witness more tourism ventures rising, the government seems to be failing to effectively market the country’s tourism riches and its attractive destinations to the outside world.
Attributed to its decline as an attractive tourist destination, is the lack of growth in its tourism receipts over the past years along with a better relative performance from its main competitors.
According to the Bloom Consulting’s Country Brand Ranking Tourism Edition 2014/2015, Botswana dropped by four (4) places down compared to its last position in the 2013 report. Botswana is now ranked at position 17 in Africa and position 132 in the world as an attractive tourists’ destination.
The survey explains that Botswana and other nations like Nigeria and Madagascar have lower global positions than those they held in 2013 due to an improved focus on tourism and tourism infrastructure in other regions of the world, as well as the weaker tourism brand strategies of the many African countries with poor CBS Ratings. Subsequently, these nations which are said to have underdeveloped tourism industries also have low Digital Demand and little revenue from tourism receipts.
However in the country brand strategy (CBS) ratings, Botswana is rated slightly stronger. CBS evaluates the accuracy of the strategy by each National Tourism Organization (NTO) for all 180 countries included in the ranking.
The report measures the NTO’s branding accuracy by means of formulae that compare the most popular brand tags for a speciï¬c country to the brand tags most heavily promoted by that country’s NTO. A Country Brand receives a higher rating if that country’s NTO focuses its strategic and promotional positioning on the tourism-related brand tags with the highest demand as measured by total online searches from international tourists.
Excelling on the surveys is Botswana’s neighbor, South Africa, which for the first time ever, tops the list in the African continent of Bloom Consulting's Country Brand Ranking 2014/ 2015 Tourism Edition. Taking advantage of a debilitated Egypt which came second in Africa, South Africa has steadily risen to the top slot in the region recording a strong CBS Rating and Digital Demand.
The report states that South Africa taking the leadership in the region is the most impressive change of this year’s Country Brand ranking Tourism Edition in Africa. South Africa, in addition to its credits, is the only African country to break into the global top 25 for the ï¬rst time. It has moved up four places from last year’s report to rank 24th.
In Africa, South Africa has overthrown the previously undefeated Egyptian tourism Country Brand. Egypt, due to it’s political instability, decrease in tourism receipts, relatively weak CBS Rating and unfavorable online presence, has fallen from it’s regional throne, dropping to only the second strongest tourism-related Country Brand in Africa. Morocco continues to maintain its 3rd place position in Africa.
With the exception of Egypt, the top three (3) countries are said to have improved on their 2013 positions.
According to the report, Kenya and Tanzania who took position four and five respectively, rely on fewer but wealthier tourists coming for safaris and other nature-centric excursions. Their strong CBS Ratings, tourism receipts and ever-increasing popularity help the two nations to continually improve their positions in our ranking; Tanzania, for example, has accessed the regional top ï¬ve for the ï¬rst time, defeating the tropical tourism paradise of Mauritius which dropped to position six.
The report indicates that Zimbabwe and Sudan have experienced an extraordinary improvement in the ranking mainly due to their recent amazing growth rate in tourism receipts. Sudan has moved up six places to position 19 while Zimbabwe has moved up five times to position 13.
Bloom Consulting further forecasts that stagnancy and a reduction in positions for the rest of the African Nations will occur in the next edition of the Country Brand ranking as lower numbers of Europeans will travel due to economic limitations, security issues and the Ebola crisis.
For the global top 25 performers rank United State of America, Spain and Germany continues for the fourth consecutive year to dominate first position. This is due to its dominance in total tourism receipts, along with the effectiveness of its NTO strategy (as measured by its very strong CBS Rating) and a high level of Digital Demand. Spain and Germany follow at position two and three respectively.
Along with South Africa, India was also the second new country welcomed to the global top 25, with it improving three positions to 23rd place. These newcomers have, inversely, knocked two formerly top-ranked countries from last year’s Country Brand ranking out of the global top 25 being Egypt and the United Arab Emirates.
Bloom Consulting is an 11 year-old Country Branding consultancy which annually ranks 180 countries through key variables used to analyze their success as well as their relative performance as compared to one another. This include economic prowess of a country’s tourism sector, its online performance, Digital demand and country brand strategy.
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”