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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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Masisi to make things right with Dangote

26th October 2020

High Commissioner of the Federal Government of Nigeria to Botswana, His Excellency Umar Zainab Salisu, has challenged President Dr Mokgweetsi Masisi to move swiftly and lobby Africa’s richest man, Nigerian Billionaire, Aliko Dangote to invest in Botswana.

Speaking during a meeting with President Masisi at Office of President on Thursday Zainab Salisu said Dangote has expressed massive interest in setting up billion dollar industries in Botswana.  “We have a lot of investors who wish to come and invest in Botswana , when we look at Botswana we don’t see Botswana itself , but we are lured by its geographic location , being in the centre of Southern Africa presents a good opportunity for strategic penetration into other markets of the region,” said Salisu.

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Dow wants GBV culprits isolated

26th October 2020
Unity Dow

As murder cases and violent incidents involving couples and or lovers continue to be recorded daily, Specially Elected Member of Parliament, Dr Unity Dow has called for more funding of non-governmental organizations and accelerated action from government to come up with laws that could inhibit would-be perpetrators of crimes related to Gender Based Violence (GBV).

Just after Dr Dow had deposited her views on this subject with this reporter, a young man in Molepolole opened fire on a married woman he was having an affair with; and ended her life instantly. While it is this heinous cases that get projected to the public space, the former minister argues that the secrecy culture is keeping other real GBV cases under wraps in many spaces in the country.

The former Minister of Foreign Affairs and International Cooperation said there is GBV all the time in all kinds of places. “We have become accustomed to stories of rapes, marital rapes, defilement of children, beatings and psychological violence and even killings,” she said.

Gender-based violence is a phenomenon deeply rooted in gender inequality, Dow is worried that there is absolutely no social punishment for perpetrators; they will continue to have the same friends, jobs, wives, homes, as before. Yet another factor, she said, is that there is little or no “justice” for victims of GBV.

The renowned activist said justice for GBV victims is not just the jailing of the perpetrator. “Justice for victims means an agile, victim-friendly, accessible (time, money and procedures) and restorative justice system.”

Asked what could be leading to a spike in Gender Based Violence cases or incidents, she observed that there is no one factor to which this spike can be attributed. “The most obvious factor is stress as a result of economic distress and or poverty. Poverty makes one vulnerable and open to compromises that they would otherwise not make. For perpetrators with anger management issues, economic stress leads to lashing out to those closest to them. Another factor is the disintegration of families and family values,” she opined.

According to Dow, no government anywhere in the world is doing enough, period. “We know the places and spaces where women and girls are unsafe. We know the challenges they face in their attempts to exit those spaces and places.” The former Judge of the High Court said GBV undermines the health, dignity, security and autonomy of its victims, yet it remains shrouded in the culture of silence.

Asked what could be done to arrest GBV cases, Dow said it is critical to involve and fund civil society organizations. She observed that much of the progress done in the area of women’s human rights was during the time when Botswana had strong and funded civil society organizations.

“The funding dried up when Botswana was declared a middle-income country but unfortunately external funding was not replaced by local funding,” she acknowledged.

Further Dow said relevant government institutions must be funded and strengthened.

“Thirdly, create a society in which it is not okay to humiliate, rape, beat or kill women. You create this by responding to GBV the same way we have responded to livestock theft. We need to create agile mechanisms that hear cases quickly and allow for the removal of suspected perpetrators from their homes, work places, boards, committees, etc.”

The former Minister said the much anticipated Inter-Ministerial Task Force on Gender Based Violence will have its work cut out for it. According to Dow, GBV is not just a justice issue, it’s not just a gender issue, but rather an issue that cuts across health, education, labour, economic, housing and politics. “As long as any one believes it is someone else’s problem, we will all have the problem,” she said.

In her view, Dow said every work, educational and other place must have a GBV Policy and/or Code of Conduct. “It is important that we acknowledge that the majority of men are law-abiding. The problem is their silence, in the face of injustice,” she observed.

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State ignores Butterfly P85 million suit threat

26th October 2020
Butterfly

The State has chosen to ignore intents by kingpins in the P100 billion scandal to sue for a combined P85 million as tables turn against the Directorate of Public Prosecution (DPP) in the matter.

Key players in the matter; the Directorate on Corruption and Economic Crime (DCEC) and Bank of Botswana (BoB) have eroded the prospects of success following the duo’s institutions’ appearance before parliamentary committees recently.

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