I love our city but let’s face it, when it comes to aesthetics, ambiance, functionality and quality of life, Gaborone falls short of the mark. As a national focal point of administration and commerce the city has not been appropriately planned to promote robust economic development required to compete in present day’s fierce global economic contest. Rapid urbanisation continues to put pressure on infrastructure that was designed to accommodate a smaller population.
Gaborone has suffered the growing pains of a developing city but the city lacks character, poise and the sophistication found in the neighbouring capital cities of Pretoria, Harare, Lusaka and Windhoek. This scenario is exacerbated by the soaring cost of living and crime statistics, questionable school rankings, a diminished career and occupational outlook and persistent power and water cuts.
Proponents of Space Management state that space affects ones mood, well-being and productivity. Could Gaborone’s uninspiring social and economic spaces and infrastructure networks that do not adequately cater for the wellbeing of citizens and the aspirations of investors be the reason the country’s Gross National Happiness index and productivity levels are so low?
The latest World Happiness Report ranks Botswana 146th happiest nation out of 156 countries in the world. The country is number 35 out of 44 countries ranked in Africa. On productivity, the country is ranked 74th out of 144 economies by The Global Competitiveness Index of 2014 -2015.
Gaborone however is a resilient city. With a colourful rags to riches history, the city is fighting back to reclaim its past glory and position itself for the next phase of development towards the emerging knowledge-economy. Once the seat of government for one of the poorest countries in the world – with a GDP per capita of about US$70 per year in the late 1960s – the city has been in the driving seat of efforts that have seen Botswana transform itself into one of the fastest-growing economies in the world, now boasting a GDP purchasing power parity) per capita of about $16,400 per year as of 2013. Its high gross national income (by some estimates the fourth-largest in Africa) gives the country a modest standard of living and the highest Human Development Index of continental Sub-Saharan Africa.
One of the country’s strategies to address challenges of competitiveness, attract foreign direct investment, improve productivity, stimulate economic growth and create jobs, is to develop an innovation ecosystem that will move the country from a resource-based economy to a knowledge-based one. The creation of spaces that are conducive for business and use technology and communication to create more efficient agglomerations in terms of competitiveness, innovation, environment, energy, utilities, governance, and delivery of services to the citizen is embodied in Science and Technology Parks.
Science and Technology Parks are sources of entrepreneurship, talent, and economic competitiveness, and are key elements of the infrastructure supporting the growth of today's global knowledge economy. By providing a location in which government, research institutions and private companies cooperate and collaborate, Science and Technology Parks create environments that foster collaboration and innovation. They enhance development, skills transfer, commercialization of technology and advance knowledge.
Construction of Botswana’s first Science and Technology Park, Botswana Innovation Hub Science and Technology Park is set to change Gaborone’s skyline and boost the city’s rankings as a conducive business environment and desirable place to live. Construction of the park commenced on 11st August, 2014 and is scheduled to be completed in June, 2016 in line to be commissioned as part of the country’s 50th anniversary of Independence celebrations on 30th September, 2016. The parks construction is a major national project that represents a significant 1 Billion Pula investment in the city’s infrastructure development.
The Botswana Innovation Hub Science and Technology Park is strategically located on a 57 hectare site, near the Sir Seretse Khama International Airport and adjacent to the Diamond Technology Park in Gaborone’s Special Economic Zone (SEZ) development node of Block 8 area. The park is an ideal location for technology-driven and knowledge-intensive businesses to establish themselves, develop and compete in regional and global markets.
The focal point of the Hub is to provide state-of-the-art buildings and facilities to attract domestic, regional and global companies to locate business as well as research and development activities within the park, and promote technology-based innovation and entrepreneurship. When the facilities in the park are fully developed, the Botswana Innovation Hub Science and Technology Park will consist of world class services including high quality road infrastructure, street lighting, telecommunications infrastructure with high capacity international connectivity and secured power and water, as well as professional business and technology transfer services.
Its central icon buildings are a world class, iconic masterpiece of architecture designed by Shop Architecture, New York whose designs won the 2013 Auto Desk Design Awards. The building is regarded as one of Africa’s pioneering ‘green’ structures. According to the World Green Building Council, “Green building (also known as green construction or sustainable building) refer to a structure and using process that is environmentally responsible and resource-efficient throughout a building’s life cycle: from siting to design, construction, operation, maintenance, renovation, and demolition.” This requires close cooperation of the design team, the architects, the engineers, and the client at all project stages. The Green Building practice expands and complements the classical building design concerns of economy, utility, durability, and comfort.
The Park offers prime real estate products and services. With 24,000m2 of commercial development space, the icon buildings will accommodate investors and tenants within sectors of Biotechnology, Information Communication Technology (ICT), Energy and Environment, and Mining Technology sectors, as well as an Entrepreneurship Development Centre commonly known as an Incubation Centre. The buildings offer flexible rental office and laboratory spaces ranging from 50m2 1000m2 for rent.
The central icon building entails a multi-use development with shared amenities within a garden Hub concept and an International amphitheater meant to host significant international events. The building also provides modern high quality premises that are easily adaptable with plug and play shared facilities such as meeting, board and training rooms, restaurants, coffee shops, gyms and wellness centers, postal services, banking and ATM services, and many other complementary services that provide work, leave and play type of environment within the Science and Technology Park.
Included in the mix is unfurnished standard office space with electricity and data connections as well as services such as common area cleaning, maintenance, security, and administration within a secure business and networking environment.
For businesses that would like to put up their own buildings, the Botswana Innovation Hub Science and Technology Park offers land for long term lease or co-development with an additional 36 hectares for light industrial purposes. The park has 40 plots of varying sizes available for lease. The plot sizes range from 3000 – 16000m2 which can be consolidated or subdivided and the company provides plot development guidelines.
Botswana Innovation Hub CEO Alan Boshwaen says, “In addition to developing superior, world class science and technology park buildings, Botswana Innovation Hub is involved in networking, advocacy and capacity building activities that support innovation.” Boshwaen is confident that Gaborone’s new landmark is set to change the city’s ambiance and the dynamics and business culture by offering a unique platform for scientific, technological and indigenous knowledge-based innovation.
Marcian Concepts have been contracted by Selibe Phikwe Economic Unit (SPEDU) in a P230 million project to raise the town from its ghost status. The project is in the design and building phase of building an industrial hub for Phikwe; putting together an infrastructure in Bolelanoto and Senwelo industrial sites.
This project comes as a life-raft for Selibe Phikwe, a town which was turned into a ghost town when the area’s economic mainstay, BCL mine, closed four years ago. In that catastrophe, 5000 people lost their livelihoods as the town’s life sunk into a gloomy horizon. Businesses were closed and some migrated to better places as industrial places and malls became almost empty.
However, SPEDU has now started plans to breathe life into the town. Information reaching this publication is that Marcian Concepts is now on the ground at Bolelanoto and Senwelo and works have commenced. Marcian as a contractor already promises to hire Phikwe locals only, even subcontract only companies from the area as a way to empower the place’s economy.
The procurement method for the tender is Open Domestic bidding which means Joint Ventures with foreign companies is not allowed. According to Marcian Concepts General Manager, Andre Strydom, in an interview with this publication, the project will come with 150 to 200 jobs. The project is expected to take 15 months at a tune of P230 531 402. 76. Marcian will put together construction of roadworks, storm-water drains, water reticulation, street lighting and telecommunication infrastructure. This tender was flouted last year August, but was awarded in June this year. This project is seen as the beginning of Phikwe’s revival and investors will be targeted to the area after the town has worn the ghost city status for almost half a decade.
The International Monetary Fund (IMF) has slashed its outlook the world economy projecting a significantly deeper recession and slower recovery than it anticipated just two months ago.
On Wednesday when delivering its World Economic Outlook report titled “A long difficult Ascent” the Washington Based global lender said it now expects global gross domestic product to shrink 4.9% this year, more than the 3% predicted in April. For 2021, IMF experts have projected growth of 5.4%, down from 5.8%. “We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast,” said Gita Gopinath Economic Counsellor and Director of Research.
The struggle of humanity is now how to dribble past the ‘Great Pandemic’ in order to salvage a lean economic score. Botswana is already working on dwindling fiscal accounts, budget deficit, threatened foreign reserves and the GDP data that is screaming recession.
Latest data by think tank and renowned rating agency, Moody’s Investor Service, is that Botswana’s fiscal status is on the red and it is mostly because of its mineral-dependency garment and tourism-related taxation. Botswana decided to close borders as one of the containment measures of Covid-19; trade and travellers have been locked out of the country. Moody’s also acknowledges that closing borders by countries like Botswana results in the collapse of tourism which will also indirectly weigh on revenue through lower import duties, VAT receipts and other taxes.
Latest economic data shows that Gross Domestic Product (GDP) for the second quarter of 2020 with a decrease of 27 percent. One of the factors that led to contraction of the local economy is the suspension of air travel occasioned by COVID-19 containment measures impacted on the number of tourists entering through the country’s borders and hence affecting the output of the hotels and restaurants industry. This will also be weighed down by, according to Moody’s, emerging markets which will see government losing average revenue worth 2.1 percentage points (pps) of GDP in 2020, exceeding the 1.0 pps loss in advanced economies (AEs).
“Fiscal revenue in emerging markets is particularly vulnerable to this current crisis because of concentrated revenue structures and less sophisticated tax administrations than those in AEs. Oil exporters will see the largest falls but revenue volatility is a common feature of their credit profiles historically,” says Moody’s. The domino effects of containment measures could be seen cracking all sectors of the local economy as taxes from outside were locked out by the closure of borders hence dwindling tax revenue.
Moody’s has placed Botswana among oil importers, small, tourism-reliant economies which will see the largest fall in revenue. Botswana is in the top 10 of that pecking order where Moody’s pointed out recently that other resource-rich countries like Botswana (A2 negative) will also face a large drop in fiscal revenue.
This situation of countries’ revenue on the red is going to stay stubborn for a long run. Moody’s predicts that the spending pressures faced by governments across the globe are unlikely to ease in the short term, particularly because this crisis has emphasized the social role governments perform in areas like healthcare and labour markets.
For countries like Botswana, these spending pressures are generally exacerbated by a range of other factors like a higher interest burden, infrastructure deficiencies, weaker broader public sector, higher subsidies, lower incomes and more precarious employment. As a result, most of the burden for any fiscal consolidation is likely to fall on the revenue side, says Moody’s.
Moody’s then moves to the revenue spin of taxation. The rating agency looked at the likelihood and probability of sovereigns to raise up revenue by increasing tax to offset what was lost in mineral revenue and tourism-related tax revenue. Moody’s said the capacity to raise tax revenue distinguishes governments from other debt issuers. “In theory, governments can change a given tax system as they wish, subject to the relevant legislative process and within the constraints of international law. In practice, however, there are material constraints,” says Moody’s.
‘‘The coronavirus crisis will lead to long-lasting revenue losses for emerging market sovereigns because their ability to implement and enforce effective revenue-raising measures in response will be an important credit driver over the next few years because of their sizeable spending pressures and the subdued recovery in the global economy we expect next year.’’
According to Moody’s, together with a rise in stimulus and healthcare spending related to the crisis, the think tank expects this drop in revenue will trigger a sizeable fiscal deterioration across emerging market sovereigns. Most countries, including Botswana, are under pressure of widening their tax bases, Moody’s says that this will be challenging. “Even if governments reversed or do not extend tax-easing measures implemented in 2020 to support the economy through the coronavirus shock, which would be politically challenging, this would only provide a modest boost to revenue, especially as these measures were relatively modest in most emerging markets,” says Moody’s.
Botswana has been seen internationally as a ‘tax ease’ country and its taxes are seen as lower when compared to its regional counterparts. This country’s name has also been mentioned in various international investigative journalism tax evasion reports. In recent years there was a division of opinions over whether this country can stretch its tax base. But like other sovereigns who have tried but struggled to increase or even maintain their tax intake before the crisis, Botswana will face additional challenges, according to Moody’s.
“Additional measures to reduce tax evasion and cutting tax expenditure should support the recovery in government revenue, albeit from low levels,” advised Moody’s. Botswana’s tax revenue to the percentage of the GDP was 27 percent in 2008, dropped to 23 percent in 2010 to 23 percent before rising to 27 percent again in 2012. In years 2013 and 2014 the percentage went to 25 percent before it took a slip to decline in respective years of 2015 up to now where it is at 19.8 percent.