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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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Bangwato regent speaks ‘respect for Dikgosi’

23rd May 2022
Bangwato

Presidential Commission of Inquiry into the Review of the Constitution held a meeting in Serowe this week. The meeting was to accord Bangwato, just like other tribes, a platform to give their opinions, contributions and what they think is the horse power and limitations of the current Constitution of Botswana.

Bangwato Regent, Kgosi Serogola Seretse said, he is of the understanding that the Commission has not come for anything apart from getting their opinions on how things could be made better. His contribution was that he solely knows of only two social positions in the world; Dikgosi and Pastors. He said other positions are just benedictions. He further urged that, Batswana should respect God’s ordained protocols such as Dikgosi and Pastors.

Seretse pointed out the importance of acknowledging and appreciating Dikgosi as nation builders. He cautioned and warned that, the Commission should ensure that their dealing with Dikgosi is harmonious. He called for an amendment to be made on the ‘National Order of Precedence’ noting that Dikgosi are put at number 11, but should at least be taken a little higher to number 7.

One resident, Tshepo Moloi while giving his contribution said there must be provisions of Social Justice that ensure equal distribution of resources to all citizens. He said this provision should entail an obligation that all citizen have equal opportunities to different Government Initiatives. Moloi substantiated that, all ‘Presidential Commissions’ be engraved on the Constitution

Alfred Thogolwane who is as well a resident of the biggest village in the Central District, pointed out the need for preservation of the country and resources thereof, saying “it must dawn onto all that, the calabash that fetches water for the family cannot fixed once its broken.”  Another resident, Keikantsemang Sebedi advocated for Polygamous marriage, saying that men should marry as many wives as they please. She said there is no need for any socioeconomic assessment done on men who wish to marry more than one wife.

She advised that, the country should benchmark from the Zezuru culture that does it, with no complexities. On the other hand, Sebedi said that, there must be considerations done on the Old Age Pension. She said people who earned P4000 should not receive the old Age Pension upon their fullness of age.  Forshia Koloi called for amendments on Section 77 and all the provisions that speaks to the subject of Bogosi and the powers infested in them. He said they should be made more detailed and avoid ambiguity in clauses.

Mr Tlhaodi said there must be Land Audits done in the country. Citing an example of the Tati Land as one that should be thoroughly audited. He further advised that, Election Day be put on the Calendar. He said, if it happens that the day be a Saturday, there should be some special dispensation for the 7th Day Adventist Church members to take part in voting without compromising on their day of worship. Tlhaodi added that there must be People’s Complaint Commission in the country.

Speakers emphasized the need for the country to review the exercise of ‘Political Party Funding’. They articulated that lack of funding political parties’ results in political parties resorting to finding funds for themselves. They reiterated that sometimes going to the extent of getting funds through illegal means. Bangwato agreed in one accord that they want the President be tried whilst in office if suspected of any criminal offences. This was revealed in their contributions. They pointed out that, the law should not to wait until the end of their tenure.

For his part, the Deputy Chairperson of the Commission Johnson Motshwarakgole expressed gratitude to the residents of Serowe. He applauded women for their kindness saying it is only them, who always take responsibility for doing things amicably in the society.

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Parliament unveils major shake-up plans & reforms

23rd May 2022
Parliament

Parliament has revealed that it plans to rollout a Community Score Card (CSC) exercise as part of sweeping reforms to its role and mandate among others.

The planed shakeup, along with the rollout of CSC will see creation of new Parliamentary Portfolio Committees on Health, HIV&AIDS, Education and Skills Development, Trade and Economic Development, Agriculture, Lands and Housing and Local Governance and Social Welfare.
Parliament informed government ministries and departments that the CSC is a participatory, community based monitoring and evaluation tool that enables citizens to assess the quality of public services and interact with services providers to express their concerns.

According to Parliament, the CSC will assist to inform community members about available services and their entitlements and to solicit their opinions about the accessibility and quality of certain services related to the portfolio committees mentioned.  It said the main objective is for Parliament through identified oversight committees is to conduct a participatory monitoring and evaluating process that puts ownership and responsibility for delivery of services in the hands of both the Government and the service recipients.

“Through scorecards developed around identified sectors and services, communities and implementing departments remain in touch with progress made through the programme delivery cycle and are able to respond timely to bottlenecks,” the National Assembly said.  Some of the measurements and expected outcomes for the rolling out of the CSC include among others, improved monitoring and economic evaluation, to determine the impact of spending, so as to be able to direct resources from where they having the least benefit to those projects and programmes where they will have a larger positive impact.

The National Assembly explained further that this could result in a willingness to close down ineffective programmes and institutions and not to implement projects that do not deliver adequate returns, improved productivity in the public services, especially given the substantial pay increases.

The National Assembly believes that the rolling out of CSC is also expected to result in efficiency savings: many public services and programmes could be delivered more effectively at lower costs, by improving management and accountability, and making use of e-services. “This would yield financial savings that could be used for development programmes or reducing the deficit,” the National Assembly said.

The exercise is also expected to result in “Careful scrutiny of subsidy schemes and termination of those that do not address market failure or assist truly needy Batswana.”  The National Assembly revealed that proposed Parliamentary Portfolio Committee on Health and Wellness has been established in accordance with the Standing of National Assembly of Botswana.  It explained that the mandate of the Committee is mainly to exercise Parliamentary oversight and scrutiny over Government Ministries, Departments and Agencies with portfolio responsibilities in respect of Health and HIV/AIDS.

“There is need to identify reasons for inefficiency and poor outcomes and ensure that health system reform improve productivity and value for money. Key areas of focus for scorecard, availability of drugs, staffing ratios, accessibility of health services, speciality care and services and sexual reproductively health,” the National Assembly said.

Another proposed Committee is on Local Governance and Social Welfare. The mandate of the Committee is mainly to exercise Parliamentary Oversight and Scrutiny over Government Ministries. Departments and Agencies with Portfolio responsibilities in respect of Local Governance and Social Welfare.

“Strategies under NDP 11 to improve outcomes of social uplifment include; diversification of rural economies, development and support of small businesses, provision of social safety nets, eradication of absolute poverty, provision of quality and equitable education and harmonisation of social protection programmes,” said the National Assembly.  It said social nets need to be improved so as to target these most in need (at present some social safety nets benefit many people who are not the most needy, but also miss out some of those who are needy).

“Some social development policies more broadly should also aim to reduce household vulnerability to shocks such as those arising from fluctuations in agriculture, climate change, incomes and employment and improve their ability to handle shocks, thereby building household resilience,” the National Assembly said.

Another Committee established is on Agriculture, Lands and Housing. The mandate of the Committee is mainly to exercise Parliamentary oversight and scrutiny over Government Institutions, Departments and Agencies with portfolio responsibilities in respect of Agriculture, Lands and Housing.

The National Assembly said the average growth rate of the agricultural sector since the beginning of National Development Plan 11 (NDP11) (i.e. during the 2017/2018 and 2018/19 financial years) was 2.5 percent, making it the slowest growing sector of the economy, in line with its historical performance.

“Over the same period, its share of GDP has been stagnant at around 2 percent. The sector also contributes job opportunities for about 80 000 adults. Food security has become paramount since the onset of the corona virus pandemic,” the National Assembly said.  The National Assembly said the Government realises the need to increase food production for products in which Botswana has a cooperative advantage such as beef, grains and other horticulture products.

The Committee on Finance, Trade and Economic Development has also been established. One of the mandates of Committee would be to exercise Parliamentary oversight and scrutiny over government ministries, departments and agencies with portfolio responsibilities in respect of Finance, Development, Trade and Industry.

“The sector is at the core of industrialisation aspirations and strategies for economic development in Botswana. Manufacturing in particular can be the driver of economic growth through technological improvements and innovation,” the National Assembly said. Hence, it said, the development of the sector could also foster export diversification and export led-growth in Botswana while benefitting from the African Continental Free Trade Area (AFCFTA).

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Salbany, Bareetsi threaten to sue DIS

23rd May 2022
Salbany Bareetsi

Two senior members of Directorate on Corruption and Economic Crime (DCEC) have threatened legal action against Directorate of Intelligence and Security (DIS), it has transpired. The threat is contained in an answering affidavit of Director General of DCEC, Tymon Katlholo in which he is seeking an interdiction from High Court to stop the DIS from accessing investigation files at his office.

After the DIS detained DCEC officials Joao Salbany and Tsholofelo Bareetsi on December 16, 2021, they filed an official complaint against DIS and some officials. They complained about abuse of office by DIS and five officers. Salbany and Bareetsi also complained about unlawful detention by DIS and unlawful dissemination of classified information contrary to Section 44 of Corruption and Economic Crime Act. “The DIS interviews were premised on information divulged during the course of official DCEC work product, that is the Monday media brief meeting,” they wrote.

They further requested leave to institute a civil suit against the DIS and its officers, and invariably the State for inhuman and degrading treatment they suffered and unlawful detention. They also pondered a declaratory seeking a sanction against the DIS and Botswana Police Service (BPS) and clarification of the role of BPS officers seconded to DIS.

“The envisaged suit against BPS and DIS officers and the DIS will inevitably centre on investigations done by the DCEC and the scope of the protection availed to DCEC officers for conduct done in the course and scope of DCEC official duties.” The duo said it was self-evident from the conduct of the DIS officers that there was nothing urgent about the information required by the DIS, justifying their detention at its Sebele facility from 08:30 hours on December 16, 2021 until 02:00 hours on December 17, 2021.

They reasoned that the information required by the DIS could have been obtained by a simple request to DCEC Director General. “What the DIS did was to seek to intimidate officers of the DCEC whom they knew were carrying out investigations against some of the DIS officers who were part of their investigation team. This turn of events has a chilling effect not only on the functioning of the DCEC but also on the official conduct of officers of the DCEC as to how they conduct their official duties.”

They concluded by stating that in the event the request is granted, they would further request to be advised as to the provision of legal representation as the unalwful detention and the degrading and inhuman treatment by the DIS was in relation to matters conducted by and on behalf of the DCEC.

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