Post-election: Focus should turn to NDP11… and much-needed reforms
The last few months have been dominated by the election campaign leading up to the general election on October 24th. Amongst the few economic issues that were prominent in the campaigns of the different parties, the problems of unemployment, poverty and inequality had perhaps the highest profile. There is no real disagreement that these are amongst the most pressing socioeconomic issues facing Botswana; however, there is much less agreement on how to successfully address them.
While these issues are crucial and need to be addressed, this must be done in the context of other pressing issues, including dealing with fiscal pressures as government revenues gradually decline in the medium to long term, and the need to restrain fiscal expenditure in order to keep the budget on a sustainable track. None of the parties really came up with a coherent plan for dealing with this, and indeed many of the election promises included unrealistic commitments for ever-greater spending.
Over the past few years, politicians have often stated that certain development projects could not proceed because of recession and adverse economic circumstances affecting the government budget, sometimes with a commitment that said project would proceed once economic circumstances improved. This may be a good way of deflecting pressure for excessive project spending, but it may also generate expectations that cannot be fulfilled.
A second pressing issue is the need to diversify exports and attract more FDI. Again, this was not really addressed in the election campaigns, and indeed all of the parties seemed more concerned with import substitution than promoting exports. In fact, none of the parties took time to adequately address pertinent economic issues, which is most disappointing, especially during the highly publicized pre-election debates.
Now that the election campaign is over, attention will turn to the development and finalisation of two key, closely related strategy and planning documents: the 11th National Development Plan, to run from 2016 to 2022, and the post-Vision 2016 document, which will cover the period of the next two-three NDPs. With the election out of the way, the government will have to ensure that these are completed quickly, but in a way that coherently addresses the key economic and social issues.
It will be important to recognise that there are many trade-offs in policymaking. Making rational decisions requires both clarification of objectives and a good understanding of the likely impact of competing policies and projects. Evidence-based policy making is essential if good use is to be made of limited resources, and if sensible decisions are to be made about which projects and programmes are to be financed.
However, this is difficult on the basis of Botswana’s current capacity to generate and analyse data and statistics. Significantly increased resources need to be provided for statistical and analytical capacity if appropriate policies and projects are to be implemented in NDP11, and subjected to proper monitoring and evaluation. Of more immediate interest is the forthcoming 2015/16 Budget next February. We have been given a flavour of what the 2015 Budget will say, in the Budget Strategy Paper released in September.
The BSP is a good initiative, which helps to keep stakeholders informed and encourage debate. It also helps to put information in the public domain at an earlier stage in the budgeting process, which in turn helps to improve understanding of economic conditions. From the 2015 BSP, we have learned that the preliminary outturn of the 2013/14 budget was more favourable than originally anticipated, with a fiscal surplus of P3.5 billion (2.8% of GDP). This was mainly due to underspending on the development budget. Clearly there still remains a major problem of implementation capacity and project management – given that many on-going projects are behind schedule, over budget, and only three-quarters of allocated funds for development projects were spent in 2013/14.
One of the most important elements of the BSP is the introduction of a new Fiscal Rule that commits government, for the first time, to allocate a fixed proportion – 40% is proposed – of mineral revenues to financial savings. In the past, there has been a commitment to invest mineral revenues in various forms of assets, but financial savings have always been a residual. Partly as a result of this, the financial assets accumulated by government over many years were relatively small and quickly depleted during and after the global financial crisis.
The Fiscal Rule is good, in principle, and in many respects is long overdue. However the implications need to be fully understood, in particular that the government will need to run large budget surpluses to finance the proposed savings. There also need to be hard and fast rules regarding drawdowns – the circumstances and conditions under which the accumulated savings be accessed.
Furthermore, government has repeatedly stated its intention to improve the screening and selection of development projects, such that only those yielding positive economic returns will be financed; if this commitment is adhered to – as it should be – some of the projects that are being called for in NDP11 will not pass the test. With the new Fiscal Rule in place, the focus will shift towards saving rather than spending, and as a result there will be less money rather than more for development projects.
Commentary adopted from Econsult ECONOMIC REVIEW – third quarter July – sept 2014
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Nigerians, Zimbabweans apply for Chema Chema Fund
Fronting activities, where locals are used as a front for foreign-owned businesses, have been a long-standing issue in Botswana. These activities not only undermine the government’s efforts to promote local businesses but also deprive Batswana of opportunities for economic empowerment, officials say. The Ministry of Trade and Industry has warned of heavy penalties for those involved in fronting activities especially in relation to the latest popular government initiative dubbed Chema Chema.
According to the Ministry, the Industrial Development Act of 2019 clearly outlines the consequences of engaging in fronting activities. The fines of up to P50,000 for first-time offenders and P20,000 plus a two-year jail term for repeat offenders send a strong message that the government is serious about cracking down on this illegal practice. These penalties are meant to deter individuals from participating in fronting activities and to protect the integrity of local industries.
“It is disheartening to hear reports of collaboration between foreigners and locals to exploit government initiatives such as the Chema Chema Fund. This fund, administered by CEDA and LEA, is meant to support informal traders and low-income earners in Botswana. However, when fronting activities come into play, the intended beneficiaries are sidelined, and the funds are misused for personal gain.” It has been discovered that foreign nationals predominantly of Zimbabwean and Nigerian origin use unsuspecting Batswana to attempt to access the Chema Chema Fund. It is understood that they approach these Batswana under the guise of drafting business plans for them or simply coming up with ‘bankable business ideas that qualify for Chema Chema.’
Observers say the Chema Chema Fund has the potential to uplift the lives of many Batswana who are struggling to make ends meet. They argue that it is crucial that these funds are used for their intended purpose and not siphoned off through illegal activities such as fronting. The Ministry says the warning it issued serves as a reminder to all stakeholders involved in the administration of these funds to ensure transparency and accountability in their disbursement.
One local commentator said it is important to highlight the impact of fronting activities on the local economy and the livelihoods of Batswana. He said by using locals as a front for foreign-owned businesses, opportunities for local entrepreneurs are stifled, and the economic empowerment of Batswana is hindered. The Ministry’s warning of heavy penalties is a call to action for all stakeholders to work together to eliminate fronting activities and promote a level playing field for local businesses.
Meanwhile, the Ministry of Trade and Industry’s warning of heavy penalties for fronting activities is a necessary step to protect the integrity of local industries and promote economic empowerment for Batswana. “It is imperative that all stakeholders comply with regulations and work towards a transparent and accountable business environment. By upholding the law and cracking down on illegal activities, we can ensure a fair and prosperous future for all Batswana.”
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Merck Foundation and African First Ladies mark World Health Day 2024
Merck Foundation, the philanthropic arm of Merck KGaA Germany marks “World Health Day” 2024 together with Africa’s First Ladies who are also Ambassadors of MerckFoundation “More Than a Mother” Campaign through their Scholarship and Capacity Building Program. Senator, Dr. Rasha Kelej, CEO of Merck Foundation emphasized, “At Merck Foundation, we mark World Health Day every single day of the year over the past 12 years, by building healthcare capacity and transforming patient care across Africa, Asia and beyond.
I am proud to share that Merck Foundation has provided over 1740 scholarships to aspiring young doctors from 52 countries, in 44 critical and underserved medical specialties such as Oncology, Diabetes, Preventative Cardiovascular Medicine, Endocrinology, Sexual and Reproductive Medicine, Acute Medicine, Respiratory Medicine, Embryology & Fertility specialty, Gastroenterology, Dermatology, Psychiatry, Emergency and Resuscitation Medicine, Critical Care, Pediatric Emergency Medicine, Neonatal Medicine, Advanced Surgical Practice, Pain Management, General Surgery, Clinical Microbiology and infectious diseases, Internal Medicine, Trauma & Orthopedics, Neurosurgery, Neurology, Cardiology, Stroke Medicine, Care of the Older Person, Family Medicine, Pediatrics and Child Health, Obesity & Weight Management, Women’s Health, Biotechnology in ART and many more”.
As per the available data, Africa has only 34.6% of the required doctors, nurses, and midwives. It is projected that by 2030, Africa would need additional 6.1 million doctors, nurses, and midwives*. “For Example, before the start of the Merck Foundation programs in 2012; there was not a single Oncologist, Fertility or Reproductive care specialists, Diabetologist, Respiratory or ICU specialist in many countries such as The Gambia, Liberia, Sierra Leone, Central African Republic, Guinea, Burundi, Niger, Chad, Ethiopia, Namibia among others. We are certainly creating historic legacy in Africa, and also beyond. Together with our partners like Africa’s First Ladies, Ministries of Health, Gender, Education and Communication, we are impacting the lives of people in the most disadvantaged communities in Africa and beyond.”, added Senator Dr. Kelej. Merck Foundation works closely with their Ambassadors, the African First Ladies and local partners such as; Ministries of Health, Education, Information & Communication, Gender, Academia, Research Institutions, Media and Art in building healthcare capacity and addressing health, social & economic challenges in developing countries and under-served communities. “I strongly believe that training healthcare providers and building professional healthcare capacity is the right strategy to improve access to equitable and quality at health care in Africa.
Therefore, I am happy to announce the Call for Applications for 2024 Scholarships for young doctors with special focus on female doctors for our online one-year diploma and two year master degree in 44 critical and underserved medical specialties, which includes both Online Diploma programs and On-Site Fellowship and clinical training programs. The applications are invited through the Office of our Ambassadors and long-term partners, The First Ladies of Africa and Ministry of Health of each country.” shared Dr . Kelej. “Our aim is to improve the overall health and wellbeing of people by building healthcare capacity across Africa, Asia and other developing countries. We are strongly committed to transforming patientcare landscape through our scholarships program”, concluded Senator Kelej.
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Interpol fugitive escapes from Botswana
John Isaak Ndovi, a Tanzanian national embroiled in controversy and pursued under a red notice by the International Criminal Police Organization (Interpol), has mysteriously vanished, bypassing a scheduled bail hearing at the Extension 2 Magistrate Court in Gaborone. Previously apprehended by Botswana law enforcement at the Tlokweng border post several months earlier, his escape has ignited serious concerns.
Accused of pilfering assets worth in excess of P1 million, an amount translating to roughly 30,000 Omani Riyals, Ndovi has become a figure of paramount interest, especially to the authorities in the Sultanate of Oman, nestled in the far reaches of Asia.
The unsettling news of his disappearance surfaced following his failure to present himself at the Extension 2 Magistrate Court the preceding week. Speculation abounds that Ndovi may have sought refuge in South Africa in a bid to elude capture, prompting a widespread mobilization of law enforcement agencies to ascertain his current location.
In an official communiqué, Detective Senior Assistant Police Commissioner Selebatso Mokgosi of Interpol Gaborone disclosed Ndovi’s apprehension last September at the Tlokweng border, a capture made possible through the vigilant issuance of the Interpol red notice.
At 36, Ndovi is implicated in a case of alleged home invasion in Oman. Despite the non-existence of an extradition treaty between Botswana and Oman, Nomsa Moatswi, the Director of the Directorate of Public Prosecution (DPP), emphasized that the lack of formal extradition agreements does not hinder her office’s ability to entertain extradition requests. She highlighted the adoption of international cooperation norms, advocating for collaboration through the lenses of international comity and reciprocity.
Moatswi disclosed the intensified effort by law enforcement to locate Ndovi following his no-show in court, and pointed to Botswana’s track record of extraditing two international fugitives from France and Zimbabwe in the previous year as evidence of the country’s relentless pursuit of legal integrity.
When probed about the potential implications of Ndovi’s case on Botswana’s forthcoming evaluation by the Financial Action Task Force (FATF), Moatswi reserved her speculations. She acknowledged the criticality of steering clear of blacklisting, suggesting that this singular case is unlikely to feature prominently in the FATF’s assessment criteria.