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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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Civil Service volatility: Democracy vs Bureaucracy

19th April 2021
President Masisi

Here is how one Permanent Secretary encapsulates the clear tension between democracy and bureaucracy in Botswana: “President Mokgweetsi Masisi’s Government is behaving like a state surrounded with armed forces in order to capture it or force its surrender. The situation has turned so volatile, for tomorrow is not guaranteed for us top civil servants.

These are the painful results of a personalized civil service in our view as permanent secretaries”. Although his deduction of the situation may be summed as sour grapes because he is one of the ‘victims’ of the reshuffle, he is convinced this is a perfect description of the rationale behind frequent changes and transfers characterising the current civil service.

The result of it all, he said, is that “there is too much instability at managerial and strategic levels of the civil service leading to a noticeable directionless civil service.” He continued: “Changes and transfers are inevitable in the civil service, but to a permissible scale and frequency. Think of soccer team coach who changes and transfers his entire squad every month; you know the consequences?”

The Tsunami has hit hard at critical departments and Ministries leaving a strong wave of uncertainty, many demoralised and some jobless. In traditional approaches to public administration, democracy gives the goals; and bureaucracy delivers the technical efficiency required for implementation. But the recent moves in the civil service are indicative of conflicting imperatives – the notion of separation between politicians and administrators is becoming blurred by the day.

“Look at what happened to Prisons and BDF where second in command were overlooked for outsiders, and these are the people who had sacrificially served for donkey’s years hoping for a seat at the ladder’s end. The frequency of the changes, at times affecting the same Ministry or individual also demonstrates some level of ineptitude, clumsiness and lack of foresight from those in charge,” remarked the PS who added that their view is that the transfers are not related to anything but “settling scores, creating corruption opportunities and pushing out perceived dissident and former president, Ian Khama’s alleged loyalists and most of these transfers are said to be products of intelligence detection.”

Partly blaming Khama for the mess and his unwillingness to let go, the PS dismissed Masisi for falling to the trap and failing to outgrow the destructive tiff. “Khama is here to stay and the sooner Masisi comes to terms with the fact that he (Masisi) is the state President, the better. For a President to still be making these changes and transfers signals signs of a confused man who has not yet started rolling his roadmap, if at all it was ever there. I am saying this because any roadmap comes with key players and policies,” he concluded.

The Ministry of Health and Wellness seems to be the most hard-hit by the transfers, having experienced three Permanent Secretaries changes within a year and a half. Insiders say the changes have everything to do with the Ministry being the centre of COVID-19 tenders and economic opportunities. “The buck stops with the PS and no right-thinking PS can just allow glaring corruption under his watch as an accounting officer. Technocrats are generally law abiding, the pressure comes with politically appointed leaders racing against political terms to loot,” revealed a director in the Ministry preferring anonymity.

The latest transfer of Kabelo Ebineng she says was also motivated by his firm attitude against the President’s blue-eyed Task Team boys. “The Task Team wants to own the COVID-19 pandemic and government interventions and always cry foul when the Ministry reasserts itself as mandated by law,” said the director who added that Masisi who was always caught between the crossfire decided on sacrificing Ebineng to the joy of his team as they (Task Team) were in the habit of threatening to resign citing Ebineng as the problem.

Ebineng joins the Office of the President as a deputy Coordinator (government implementation and coordination office).The incoming PS is the soft-spoken Grace Muzila, known and described by her close associates as a conformist albeit knowledgeable.

One of the losers in the grand scheme is Thato Raphaka who many had seen as the next PSP because of his experience and calm demeanour following a declaration of interest in the Southern African Development Community (SADC) Secretary post by the current PSP, Elias Magosi.

But hardly ten months into his post, Raphaka has been transferred out to the National Strategy Office in what many see as a demotion of some sort. Other notable changes coming into OP are Pearl Ramokoka formerly with the Employment, Labour and Productivity Ministry coming in as a Permanent Secretary and Kgomotso Abi as director of Public Service Reforms.

One of the ousted senior officers in the Office of the President warned that there are no signs that the changes and transfers will stop anytime soon: “If you are observant you would have long noticed that the changes don’t only affect senior officers but government decisions as well. A decision is made today and the government backtracks on it within a week. Not only that, the President says this today, and his deputy denies it the following day in Parliament,” he warned.

Some observers have blamed the turmoil in the civil service partly to lack of accountable presidential advisers or kitchen cabinet properly schooled on matters of statecraft. They point out that politicians or those peripheral to them should refrain from hampering the technical and organizational activities of public managers – or else the party (reshuffling) won’t stop.

In the view expressed by some Permanent Secretaries, Elias Magosi, has not really been himself since joining the civil service; and has cut a picture of indifference in most critical engagements; the most notable been a permanent secretaries platform which he chairs. As things stand there is need to reconcile the imperatives of democracy and democracy in Botswana. Peace will rein only when public value should stand astride the fault that runs between politicians and public managers.

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Morupisi fights for freedom in court

19th April 2021
morupisi

Former Permanent Secretary to the President, Carter Morupisi, is fighting for survival in a matter in which the State has charged him and his wife, Pinnie Morupisi, with corruption and money laundering.

Morupisi has joined a list of prominent figures that served in the previous administration and who have been accused of corruption during their tenure in office. While others have been emerging victorious, Morupisi is yet to find that luck. The High Court recently dismissed his no case to answer application.

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Pressure mounts on Biden to suspend Covid-19 vaccine patents

19th April 2021
Joe Biden

United States President, Joe Biden, is faced with a decision to make relating to the Covid-19 vaccine intellectual property after 175 former world leaders and Nobel laurates joined the campaign urging the US to take “urgent action” to suspend intellectual property rights for Covid-19 vaccines to help boost global inoculation rates.

According to the world leaders, doing so would allow developing countries to make their own copies of the vaccines that have been developed by pharmaceutical companies without fear of being sued for intellectual property infringements.

“A WTO waiver is a vital and necessary step to bringing an end to this pandemic. It must be combined with ensuring vaccine know-how and technology is shared openly,” the signatories, comprising more than 100 Nobel prize-winners and over 70 former world leaders, wrote in a letter to US President Joe Biden, according to Financial Times.

A measure to allow countries to temporarily override patent rights for Covid related medical products was proposed at the World Trade Organization by India and South Africa in October, and has since been backed by nearly 60 countries.

Former leaders who signed the letter included Gordon Brown, former UK Prime Minister; François Hollande, former French President; Mikhail Gorbachev, former President of the USSR; and Yves Leterme, former Belgian Prime Minister.

In their official communication, South Africa and India said: “As new diagnostics, therapeutics and vaccines for Covid-19 are developed, there are significant concerns [about] how these will be made available promptly, in sufficient quantities and at affordable prices to meet global demand.”

While developed countries have been able to secure enough vaccine to inoculate their citizens, developing countries such as Botswana are struggling to source enough to swiftly vaccine their citizens, something which world leaders believe it would work against global recovery therefore proving counter-productive.

Since the availability of vaccines, Botswana has been able to secure only 60 000 doses of vaccines, 30 000 as donation as from the Indian government, while the other 30 000 was sourced through COVAX facility.  Canada, has pre-ordered vaccines in surplus and it will be able to vaccinate each of its citizens six times over. In the UK and US, it is four vaccines per person; and two each in the EU and Australia.

For vaccines produced in Europe, developing countries are forced to pay double what European countries are paying, making it more expensive for already financially struggling economies.  European countries however justify the price of vaccines and that they deserve to buy them cheap since they contributed in their development.

It is evident that vaccines cannot be made available immediately to all countries worldwide with wealthy economies being the only success story in that regard, something that has been referred to as a “catastrophic moral failure”, head of the World Health Organisation (WHO), Tedros Adhanom Ghebreyesus.

The challenge facing developing countries is not only the price, but also the capacity of vaccine manufactures to be able to do so to meet global demand within a short time. The proposal for a patent waiver by India and South Africa has been rejected by developed countries, known for hosting the world leading pharmaceutical companies such US, European Union, the United Kingdom, and Switzerland.

According to the Financial Times, US business groups including pharmaceutical industry representatives, have urged Biden to resist supporting a waiver to IP rules at the WTO, arguing that the proposal led by India and South Africa was too “vague” and “broad”.

The individuals who signed the letter, including Nobel laureates in economics as well as from across the arts and sciences, warned that inequitable vaccine access would impact the global economy and prevent it from recovering.

“The world saw unprecedented development of safe and effective vaccines, in major part thanks to US public investment,” the group wrote. “We all welcome that vaccination rollout in the US and many wealthier countries is bringing hope to their citizens.”

“Yet for the majority of the world that same hope is yet to be seen. New waves of suffering are now rising across the globe. Our global economy cannot rebuild if it remains vulnerable to this virus.”
The group warned that fully enforcing IP was “self-defeating for the US” as it hindered global vaccination efforts. “Given artificial global supply shortages, the US economy already risks losing $1.3tn in gross domestic product this year.”

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