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BDC could lead the economic revolution


For a country that is seen as an economic success on the continent, Botswana is still far off in terms of bridging the income gap, ensuring food security, economic participation by the larger populace.


After many years of being an exemplar of good governance, political stability and steady economic growth, some of the novelty has worn off as other countries catch up. Peace and stability can no longer be used as trump cards to woe investors and those who can drive innovation; this is because the continent has largely ceased to be a war zone. Other countries such as Rwanda, Mauritius and Gabon have caught up on the economic front. Some have embraced innovation much faster than Botswana.


Despite its middle-income status, Botswana continues to grapple with significant social challenges including unequal distribution of wealth, high levels of poverty, unemployment and HIV/AIDS prevalence. The latest Human Development Index released by the United Nations Development Program (UNDP) in July 2014, Botswana with an index of 0.683, comes 6th in Africa (109th in the world), after Lybia, Tunisia, Liberia and Mauritius and Seychelles.

This rating gives Botswana the top position among the Medium Development classification as for countries like South Africa, Ghana, Namibia and others. The Lower Development Index rated countries include the bulk of African countries, among them; Kenya, Lesotho, Swaziland and Cameroon Mauritania and Zimbabwe.


The country is yet to reap the fruits of a privatisation drive that has taken longer than anticipated; the Private


At a gala dinner held hosted by the Botswana Confederation of Commerce and Manpower (BOCCIM) in Francistown recently, the Botswana Development Corporation (BDC) Managing Director, Bashi Gaetsaloe, shared a vision for this country that can only be described as an economic revolution. Gaetsaloe shared a presentation titled Private Sector Led Economic Growth – Lessons and Suggestions.


But can the Corporation, with Gaetsaloe at the helm, achieve such a feat, totally independent of political power? That is as question that an observer would ask given that political decision makers often have precedence over technocrats and their expertise. But that question will, for now remain food for thought.


Gaetsaloe sees the Botswana Development Corporation as a panacea for the socio-economic problems that Botswana faces; the Corporation will be more relevant under the control of the brilliant young with a colourful curriculum vitae.


 “We need a private sector that can say “Why Not?” and then deliver on that challenge. We need a private sector that can create businesses that have operations in New York, London, Singapore, Australia. Why Not?”


Gaetsaloe’s position is that the country has groomed its people for administrative roles, somewhat at the expense of innovation and diversification. The resource blessing, often referred to as a curse, caught up with Botswana whereby the country latches onto the revenues gained from one main stream; diamonds. Efforts to diversify away from diamonds have been slow but evident.


What is different now?


“We have higher unemployment and are challenged to get it down; Mining revenues are not only in decline – but are also contributing a smaller share to GDP; Botswana is more dependent on services than on mining for fiscal income; Botswana is not exporting enough and we have enough administrators – but not enough creators.”

“We need businesses that can patent innovations and sell them to global giants such as Microsoft and Dell. Why Not?

“We need businesses that can reduce our dependencies on exports for oil, sugar, light bulbs? Why Not? We need a private sector that can conquer not just Africa but the world. Why not? We need businesses that can ensure that – not 100 or 200 – but 10, 000 Batswana can participate in the diamond industry in Botswana and beyond. Why not? We need business that don’t just dream. They do it? Why Not?”

One has to critically look at the reasons why Botswana is not industrialized  

The diamonds are sorted, polished and to some extent sold from Botswana after the landmark relocation of De Beers Global Sales to Botswana in late 2013. Experts put the possible economic potential at

Gaetsaloe seems to be galvanized by some of the success of the BDC in the past; some of these include partnerships on projects of various sectors, funded by the Bank namely, Gaborone Sun Hotel and Conference Centre, Metropolitan, Sechaba Holdings, Cresta Marakanelo Hotels and Mashatu. “These businesses may have changed owners and changed names but all of them were started in partnership with BDC,” says Gaetsaloe.


Formed in 1970, BDC has helped to form and to grow over 300 businesses in the last 45 years. Every year, through its assistance of equity, direct loans, preference shares, and indirect support, the Corporation disburses between P50 million and P100 million directly to the business community.


But Gaetsaloe wants to see more being done; he wants the Corporation to give answers to the socio-economic questions that arise in the country.


 Gaetsaloe asks very pertinent questions: “Why can’t we feed 2 million people with cabbage and spinach? We will answer this question? Why can’t we serve a glass of milk for 2 million people. We will answer this question? Why can’t we invest more in the region? We will answer this question?”

ECONOMIC REVOLUTION?
Research done by the Ministry of Trade and Industry has revealed that there are niches and gaps in various  sectors which could be exploited, provided all backward and forward linkages are mobilized to monetize them effectively.

Agro-processing (dairy, horticulture, meat); Coal, Diamond and Other Minerals Beneficiation; Recycled Material Products –Paper, Plastic and others; Arts and Crafts; Construction/Building Materials; Textiles and Clothing; Leather and Leather Products; Renewable Energy; Banking, Finance and Insurance; Services/Support Sectors and Primary Production (grains, livestock, etc)

An economic revolution is a rapid change in the economic system of a society. For example in Cuba, when Castro took over the government he nationalised all the industry in the country. Cuba went from a mostly free market economic system to a government operated economy.

The Industrial Revolution which took place in Great Britain and spread to Western Europe and the United States, in the period from about 1760 to sometime between 1820 and 1840. This transition included going from hand production methods to machines, new chemical manufacturing and iron production processes, improved efficiency of water power, the increasing use of steam power, and the development of  machine tools. This was probably a classic example early example of public private partnerships, whereby the governments were pushing for industrialisation.

Despite its middle-income status, Botswana has to contend with challenges emanating from its narrow economic structure and the attendant over-dependence on the mining sector, in particular diamonds.

While the government has a reputation for the prudent management of mining revenues and also boasts a good governance record and stable democracy, the need for diversification remains critical.

On the social front, the distribution of resources and level of development remain major concerns. With a Gini coefficient of 0.61, Botswana portrays a relatively unequal distribution of wealth.

The incidence of poverty is also high, with 18.4 percent of the population living below the poverty line. Other challenges include a high unemployment rate of 17.8 percent, and relatively low Human Development Index (HDI) ranking and score mainly due to the high HIV/AIDS prevalence of 23.4 percent that drags down life expectancy.

Yet opportunities for economic activity and job creation lie in many different sectors among them;

Can Botswana see her coming out of the closet and become an innovative economic powerhouse in the region and beyond? Bashi Gaetsaloe says it can and should be done.

SOME CURRENT EFFORTS
There are many interventions that have been set up, mostly by government. Government’s business development body, Local Enterprise Authority (LEA), has teamed up with Indian firm, National Small Industries Corporation (NSIC) to set up a Rapid Incubation Center to impart technical and business skills.


The Incubation centre will be constructed at a plot in the Old Industrial Site that was rendered to LEA by the former International Financial Services Centre (IFSC) at its dissolution.
The training will be conducted for graduate and non graduate incubates.


Based on an assessment of both NSIC and LEA teams, based on the raw materials as well as skills available in Botswana.


The Indian firm has NCIS is said to have a wealth of expertise and experience from around the world and in the. Government has set P20 million to set up the Rapid Incubation Center.
The Ministry of Trade and Industry has also at some point played with the idea of promoting cooperatives and growing them.


The cooperative format of ownership for means of production strongly associated with communism. However, as governments embrace hybrid systems that are not strictly capitalist or socialist, it is conceivable that cooperatives can work in any country; cooperatives could solve economic gap and indeed the social gap. Industry experts have alluded to the infinite possibilities of cooperatives in nearly every sector imaginable.


POLITICAL WILL
In a paper titled Public Enterprises’ Performance Is A Significant Function Of Government’s Behaviour, University of Botswana academic, Prof. Brothers Malema makes a case for better governance structures at parastatals and posits that political will is very integral in the success of a public institution in achieving their mandate. “Parastatal sector’s performance is largely influenced by Government,” concludes Malema.


“The delisting of Botswana Meat Commission (BMC) from the European Union market and the outbreak of foot and mouth disease have played a part in the losses incurred by the enterprise. However, BMC has also been embroiled in possible cases of sabotage. It is not surprising that they incurred losses. The Minister responsible according to some media reports failed to act in the best interests of commendable corporate standards as he seems to have failed to reign over his board. The Minister is said to have exercised some form of favouritism in the affairs of BMC. This is further aggravated by the President’s remarks that he cannot fire the Minister over the underperformance of the board,” said Malema, in buttressing his argument.


“The levels of possible corruption within Government and the lack of political will to stamp out such practice is a threat to the success of SOEs (Statutory Owned Enterprises) and the subsequent improvement of welfare gains to a country whose poverty levels rank amongst some of the poorest countries in the world. Therefore, instead of privatising public enterprises, the Government needs to strengthen governance structures.”


“I wish to conclude by pointing out that the parastatal sector’s performance is largely influenced by Government. Furthermore, the mixed performance of the public enterprises was mainly a governance issue; those that adhered to good governance practices performed well while others didn’t.

The cases of BMC, BPC and to some degree BDC points to a lapse on the side of the Government to ensure adherence to International standards of corporate governance by these organizations.

These questionable sub-standards have also been pointed out by one of the Legislators who is (or was) the Chairman of the Parliamentary Committee on Statutory Bodies. There is therefore a need for political will at the highest level to reign on these possible corrupt tendencies,” writes Malema in closing his argument.


Bashi Gaetsaloe’s vision could therefore go a long way in helping to industrialise Botswana and tap into solutions for the economy. However, political will can galvanise him or pour cold water on his ambitions.

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Motamma Horatius on politics and motherhood

13th January 2021
motamma

While it takes a lot to penetrate and thrive in the male dominated political space in Botswana, Block 3 Ward councillor Motamma Horatius, is one of the few females defying the odds.

Driven by passion, Horatius has always worn many hats and today she has become one of the few women who are thriving in the political space in Botswana. Prior to pursuing politics, she was an active participated in the creative space.

Horatius, a beauty queen, notably famous for her reign as Miss World Tourism Botswana represented Botswana in a television show famously known as Big Brother Africa. During her stay in the house, she got termed darling of the continent for an outstanding performance that promoted unity, humility and culture.

After serving for some time in public space, and making a name for herself as well as serving as a brand ambassador she decided to step in a career that will forever challenge her. This was after she had travelled the world and demonstrated her unique leadership skills and brilliance.

“I stopped and asked myself why am I not incorporating this brilliance back home. And wherever you go worldwide Botswana with all her faults is a beacon of hope in everything. And even successful countries came here to benchmark and implemented our policies and are flourishing such as Rwanda. So I decided to join active politics and go straight to the ruling party to add a youthful feel to an already existing force and help modernise it to serve better not from afar but from within,” she clarified.

“So my ample experience in civic leadership across countries around the world catapulted me to join active politics because I wondered, if I can do as much as an individual even across nations, how much can I do whilst in office, locally. And I chose to start from the ground up, in order to avoid leaving the locals behind.”

The stern and tenacious young leader, currently sit as the Chairperson of Finance Committee at Gaborone City Council, and also chairs Performance Monitoring Committee.

While a typical girl would dream of becoming either a nurse or choose a ‘girl’ orientated deemed career, she had a heart for politics from a very young age.  By the time she left the creative space, she had already made a name for herself, that she needed no introduction.

“I had to acknowledge first that I am a woman, and being a woman means you have to work 200 percent more than your male counterparts. So it took sleeplessness nights, and a massive amount of working smart to win legitimately,” she said.

She acknowledges that she faced a lot of challenges during the 2019 elections which she had to overcome through the assistance of her loved ones and family.

“Politics is expensive but I managed by God’s grace, family, friends, acquaintances and good Samaritans but my mind helped. I am a very good planner when it comes to execution,” she said.

“Another hurdle is, being a young woman, I had conceived during the time of primary elections; so campaigning whilst expectant, managing your emotions through betrayals, insults, stress, house-to-house then giving birth and having to hit the ground in less than two weeks having given birth via C-section, was a hurdle I overcame by God’s mercy and I am thankful to my family for helping me with the kids because politics means a lot of time away from home.”

“Another hurdle was to portray an all rounded culturally grounded Motswana woman soft but yet stern, respectful but can articulate issues well. Because even though we are civilized our society still upholds unwritten yet practiced values of what a woman is and what a man is, and if you defy societal expectations, it judges you harshly. But thankfully I remained focused on who I was and didn’t try alternate anything When I lost some of the original members of my campaign team. The pain was deep. But I wiped my tears. Soldiered on, and God increased twice the initial number.”

At some point she had to face demeaning words from other male contestants, but the best to do at the time was to shun negativity and stay focused. Male intimidation never tugged her down.

“My experience with 2019 elections was rather inclined to learning as it was my first time running for office as a politician, so I wanted to see if really hard work has results because I always hear stories of how people are bought,” she said.

“So since I was not buying anyone, I was on a learning curve to test my hard work style of delivery against what is believed out there. So it was exciting and again I say it was a learning curve as most NGOs fighting to increase women participation in politics were continuously training us.’

Despite everything she feels women political participation in Botswana is still low. She has pleaded with the media to cover them more often as she believes maybe it will help more women to run for office.

Botswana has few women in parliament, giving men dominance in policy decisions. In a 63-seat parliament, Botswana has only seven female MPs, four of them being specially elected lawmakers.

According to the 2019 edition of the biennial Inter-Parliamentary Union (IPU) Map of Women in Politics. Among the top African countries with a high percentage of women in ministerial positions are Rwanda (51.9%), South Africa (48.6%), Ethiopia (47.6%), Seychelles (45.5%), Uganda (36.7%) and Mali (34.4%).

The lowest percentage in Africa was in Morocco (5.6%), which has only one female minister in a cabinet of 18.

Other countries with fewer than 10% women ministers include Nigeria (8%), Mauritius (8.7%) and Sudan (9.5%).Other African countries with high percentages of women MPs include Namibia (46.2%), South Africa (42.7%) and Senegal (41.8%), according to the report.

Though a slight increase, Botswana is still lagging behind when it comes to women political participation.

According to a report made by IEC for the 2019 elections, there is 11.1% women representation in parliament. There has been a 1.6% slight increase from the 2019 election compared to the 2014 elections.

According to United Nations, there are two main obstacles that prevent women from participating fully in political life.

These are structural barriers, whereby discriminatory laws and institutions still limit women’s ability to run for office, and capacity gaps, which occur when women are less likely than men to have the education, contacts and resources needed to become effective leaders.

As it stands though, Botswana has continued to recognize gender equality as central to socio-economic, political and cultural development through its National Vision 2036.

Following the adoption of the National Policy on Gender and Development in 2015, the National Gender Commission was established in September 2016, to monitor implementation of the policy.

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Gov’t imposes austerity as financial year closes

11th January 2021
President Masisi

Government ministries and departments have moved to cut expenditure in the last quarter of financial year in order to survive the economic hardship occasioned by the covid-19 pandemic. Since the outbreak, Government and the private sector have been hard hit financially due to limited economic activity brought about by government response to fighting the pandemic.

In an urgent savingram by the Permanent Secretary in the Ministry of Local Government and Rural Development, Molefi Keaja addressed to all council secretaries and town clerks, the government informs that it is facing unprecedented budgetary challenges for Financial Year 2020/2021.

“This has necessitated measures to be put in place to conserve cash and ensure that government is able to honour its financial obligations in the remaining (3) months of the financial year,” said the savingram dated 24 December 2020.

The Government has cut all travel by Ministries, Departments and Agencies (MDAs) including State owned entities (SOEs) and Local Authorities until the next financial year in April 2021.
It has also taken a decision that all meetings, interviews, seminars, workshops, conferences, retreats, annual ceremonies and hospitality events should be conducted virtually, which save on the cost of securing venues, conference facilities and meals/refreshments.

“No replenishment of refreshments for the Executive Cadre (E2 salary scale and above) until the end of the financial year,” Keaja directed. Last year government also resolved that due to the financial effects of Covid-19 the government will no longer recruit for any jobs during the 2020/2021 financial year.

The Cabinet directed that the 2020/2021 provision for vacancies be withdrawn from Ministries, Departments and Agencies recurrent budgets to cater for supplementary estimates. According to the saving gram then by the Directorate on Public Service Management (DPSM) said the country faces fiscal challenges which have been accentuated by the emergence and the spread of the COVID-19 pandemic.

Amongst key ministries and departments affected were the Botswana Defence Force, National Strategy Office, Directorate of Intelligence and Security (DIS), Commissioner of Police, Commissioner of Prisons, Clerk of National Assembly and the Directorate on Corruption & Economic Crime (DCEC).

It further deliberated that all various institutions that had begun recruitment for existing vacant positions be frozen for the remaining period of the 2020/2021 financial year. “Since funds for the vacancies will only be recruited in the next financial year 2020/20121, Ministries, Department and Agencies are advised to discontinue recruitment into such vacancies until 1st April 2021. Those who are already at an advanced stage of recruitment process are advised to withhold appointments until further notice.”

The Director of Directorate on Public Service Management (DPSM), Goitseone Mosalakatane, told the parliamentary Public Accounts Committee (PAC) in September that despite the high unemployment rate, they cannot hire for the posts because part of the funds have been withdrawn to fight the Coronavirus.

With just a few days into the New Year, Covid-19 seems to be taking its toll and its effects will be felt vastly in the long run. Countries worldwide, including Botswana are injecting in millions of money in the fight against the deadly virus therefore placing immense uncertainty on country’s economy.

When delivering his speech at last year’s State of Nation Address President Mokgweetsi Masisi said during 2020, the domestic economy was expected to contract by 8.9 percent indicating that this is attributed to an expected sharp decline in major sectors such as mining, (minus 24.5 percent); trade, hotels and restaurants (minus 27.4 percent); construction (minus 6 percent); manufacturing (minus 3.9 percent); and transport and communications (minus 2.5 percent).

However, he assured that the economy is expected to rebound during 2021, with overall growth projected at 7.7 percent. The anticipated recovery will be driven by a rebound in growth of some major sectors such as mining (14.4 percent), trade, hotels and restaurants (18.8 percent), and transport and communications (4.2 percent).

Furthermore, Masisi pointed out that the recovery will also be supported by the Economic Recovery and Transformation Plan currently being implemented by Government. “It is critical to note that these projections are dependent on, among others, the duration of the COVID-19 pandemic and related restrictions.

These containment measures have the effect of reducing spending by firms and households and causing supply-chain disruptions. Beyond this, the recovery phase will be influenced by confidence effects on households and businesses; sectoral transformation and changes in work patterns; as well as prospects for the recovery of global financial markets and commodity prices.”

Emphasising this, he explained that despite the challenges of COVID-19 there still remains the delicate balance of opening the economy whilst containing the disease burden. “Inflation according to the latest data from Statistics Botswana, inflation fell significantly from 2.2 percent in September 2019 to 1.8 percent in September 2020, remaining below the lower bound of the Bank of Botswana’s medium-term objective range of 3 to 6 percent,” he said.

The significant decline in inflation mainly reflects the downward adjustment in fuel prices in June 2020. However, inflation may rise above the current forecasts if the international commodity prices increase beyond current projections and in the event of upward price pressures occasioned by supply constraints due to travel restrictions and lockdowns.

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BDP readies for Congress

11th January 2021
BDP congress

The Botswana Democratic Party (BDP) last year had to cancel its elective congress due to the strict measures that had to be put in place due to Covid-19 pandemic outbreak.

Two other party events Women’s Wing Congress including the much anticipated victorious election celebration were also postponed due to the pandemic as gatherings were cancelled indefinitely.
However the BDP is adamant that the party will be able to hold its National Congress and all other events that had been frozen this year.

Speaking to this publication chairman of BDP Communication & International Relations Sub-Committee Kagelelo Kentse said that the party was readying itself for the congress with the main objective being to review resolutions that were taken at their 38th National Congress in Mochudi in 2019. Emphasising this, Kentse said it was commendable that most of the resolutions taken in 2019 have by far been fulfilled.

Moreover, he said it would mean a lot for the party to be able to meet at the congress, this he said would give them the opportunity to introspect and reflect with regards to their manifesto. In 2019 the BDP made about eleven resolutions of which five of these were resolved and gazetted. The abridged resolutions were that the amendment of the law to allow agricultural land owners to use up to 50 percent of their land for non-core purposes, to amend the law to cancel transfer duty on property transferred between the spouses.

President Masisi also passed a law to allow married couples to be independently allocated land and increase threshold for non-payment of transfer on property acquired from P250k to P750k. On the resolution in the tourism sector, Kentse said efforts are very advanced to have local play a part. He said there is ongoing work with the Ministry of Lands on concessions that will be allocated to citizens.

According to the BDP communications chair the Ministry of Tourism has availed more opportunities in dams for tourism thus far, having already issued expression of interest for Letsibogo, Dikgatlhong, and Gaborone dams. Citizens are said to have applied for tenders which are currently under evaluation. There are about 45 campsites set aside for citizens in game reserves and forest reserves for tourism.

The resolution on the declaration of assets and liabilities law which was passed and amended this year, was supported by all legislators including those from opposition. Emphasising this he explained that contentions were on issues to do with valuations, and leaders have started declaring.

With the Congress comprising of the elective congress, the BDP is yet to embark on it an objective Kentse said is on their to do list this year even though the calendar of events has not yet been made.
The elective congress has aroused interest, especially the Secretary General position which has attracted a number of participants of which observers believe will accord the incumbent, Mpho Balopi, the current secretary general, the opportunity to buy time if at all he will seek re-election in the position.

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