Botswana has thrown its weight behind the endeavor by Africa to create 100 million jobs through Small Medium Enterprises (SME) by 2025. This was revealed by President Mokgweetsi Masisi at the launch of Davos Friends of Africa Growth Platform (AGP) in Swirtzland last week.
This week, when addressing members of the Media about his Davos trip President Masisi further revealed that the Botswana has been selected amongst only three countries in Africa to implement the Growth Platform. He said the pilot initiative will be launched in April this year by Senior Officials of the World Economic Forum. “We are delighted for being selected because this gives us an opportunity to test our environment if it’s ready and enabling for the private sector to thrive, this is a real test for continental competitiveness,” he said.
Masisi further noted that the Africa Growth Plan will give Botswana an opportunity to crack unemployment and deliver much needed jobs. “This presents us with a chance to tap into our demographic profile and get our young people to participate into this SMEs growth agenda.” The initiative was launched as part of the Davos Manifesto 2020 to mobilize the global community for collective action to meet the ambition of this business-led initiative.
Undertaken by the World Economic Forum, in collaboration with the Forum’s Global Shapers and African start-ups community ,a 100-day social media campaign has been together to rally stakeholders to sign up African SMEs and start-ups that wish to join AGP. The goal is to reach 1 million jobs in 2020.
President Masisi alongside Ghanaian President Nana Akufo-Addo pledged their commitment to participate as member countries of the African Growth Platform. Sipho M. Pityana, Chairman of AngloGold Ashanti, has also pledged support to be Founding Partner of Davos Friends of AGP.
Africa Growth Platform was first launched at the World Economic Forum on Africa in Cape Town, South Africa late last year. The platform seeks to address the job creation crisis by creating100 million jobs in SMEs and start-ups by 2025. According to the World Economic Forum two thirds of Africa's 420 million young people are currently unemployed, which highlights a clear need for new solutions to drive employment growth.
“At the same time, Africa's young population is well-endowed with entrepreneurial spirit, with early-stage entrepreneurial activity 13% higher than the global average. However, due to insufficient support and infrastructure, the region's start-ups are 14% more likely to fail than those elsewhere in the world," said the WEF. At the Africa Forum last year, leaders underscored that Africa's entrepreneurs are its greatest economic asset. Experts however noted that spirit and resourcefulness alone are not always enough to help them succeed.
“Too often start-ups and innovative enterprises fail needlessly through lack of additional finance or overly burdensome regulations.” According to reports from Davos the AGP will bring together governments, investors and entrepreneurs to enhance funding prospects, create better enabling environments for business growth, and help Africa’s community of start-up enterprises grow and compete in international markets.
The founding members of the platform are Alibaba Group, A. T. Kearney, Dalberg Group, Export Trading Group, United States African Development Foundation, and Zenith Bank. “The Africa Growth Platform (AGP) recognizes that one of the most compelling ways to create new economic opportunities and support Africa’s digital transformation is to invest in the capacity building and empowerment of entrepreneurs and small businesses,” said Brian Wong, Vice-President of Global Initiatives for Alibaba Group.
“We are honored to serve as a founding member of the AGP as we work to enhance global cooperation among all stakeholders and to do our part to inspire, train and support entrepreneurs in Africa in order to achieve more inclusive growth.” Brian Wong says the African Global Platform will do this in three ways: first, by securing commitments from governments to implement policy reforms aimed at stimulating and accelerating business growth.
Secondly it aims to build a community of investors, whether private investors, foundations, multilateral institutions or corporate entrepreneurs to enable better coordination and pooling of resources that could facilitate larger subsequent rounds of funding. Furthermore the platform will create and sustain a community of start-up businesses themselves, promoting collaboration and sharing best practices.
On his part President Masisi said Botswana’s young population is an advantage that needs to be leveraged on to create value and transform Botswana’s economy, “With more than half of our population being under the age of 35, We aspire to address the unemployment challenge through, among others, entrepreneurship, support to SMMEs and start-ups,” he said.
President Masisi said the AGP’s objective to scale 100 million SMEs and start-ups by 2025 is a welcome ambition to Botswana “We look forward to being an active participant and beneficiary of the initiative,” he said. To strengthen the institutional support to deliver the AGP and other key initiatives in the region, the Forum has also established an Africa Regional Stewardship Board with Sipho M. Pityana, Chairman of AngloGold Ashanti, and Oby Ezekwesili, Richard von Weizacher Fellow, Robert Bosch Academy as the inaugural Co-Chairs for 2020.
“I’m honoured and humbled by the opportunity to Co-Chair the World Economic Forum’s new Regional Stewardship Board (RSB),” said Sipho M. Pityana. “I look forward to working with my fellow Co-Chair, Oby Ezekwesili, the team and like-minded stakeholders to achieve greater African economic integration and promoting peace and stability while addressing trade obstacles, climate change and opportunities and challenges of the Fourth Industrial Revolution.”
In a panel discussion with President of Senegal Macky Sall and Queen Máxima of the Netherlands in Davos last week President Mokgweetsi Masisi emphasized the power of African youth, its growing cities and economies, and the potential that a unified market under the African Continental Free Trade Agreement is poised to deliver.
“We have full confidence that when we increase the intra-African trade, it will be a means by which we grow and reach the world, in the same way we also want the world to reach us. Africa represents the most powerful workforce of a lifetime,” he said. While in Davos President Masisi met World Heads of State and Government, Global Chairs and Chief Executives, as well as Heads of International organizations, civil society and academia amongst them World Economic Forum Founder, Professor Klaus Schwab , CEO of Wilmar International (Pty), Petter Binde , CEO of the world's largest brewer, Anheuser-Busch InBev (AB InBev), Mr Carlos Brito.
Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.
In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.
The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.
With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.
Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.
BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.
During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.
BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.
As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.
In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.
BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.
The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.
BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.
Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.
According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).
With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.
In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.
Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.
The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.
The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.
The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.
In the latest June 2022 global economic prospects, released last week the World Bank has warned that low global economic growth and economic activity in global commodity markets such as China and Europe could negatively affect export revenues for Botswana and other Sub Saharan countries.
Recent data from Statistics Botswana show that Botswana’s exports destined to the global markets such as Asia and the European Union (EU) on monthly basis accounts for around 60.1 percent and 20.1 percent respectively.
The World Bank last week lowered its 2022 projections of global economic growth and indicated that the new forecasts could be bad news for countries like Botswana who are dependent on export mineral revenues. The Bank noted that just over two years after COVID-19 caused the deepest global recession since World War II, the world economy is again in danger and stated that this time it is facing high inflation and slow growth at the same time.
In the recent June projections, the bank lowered its forecast of global economic growth from the January 4.1 percent to 2.1 percent. “Our June forecasts reflect a sizable downgrade to the outlook: global growth is expected to slow sharply from 5.7 percent in 2021 to 2.9 percent this year. This also reflects a nearly one-third cut to our January 2022 forecast for this year of 4.1 percent,” a team of World Bank economists noted in the June 2022 Global Economic Prospects.
The World Bank indicated that exports from Botswana and other Sub Saharan countries could suffer from a substantial deceleration of activity in China and Europe. The Bank noted that exporters of industrial metals, crude oil, and ores such as Angola, Democratic Republic of Congo, Republic of Congo, South Africa, and Zambia could suffer from a substantial deceleration of activity in China.
On the other hand a sharp contraction of growth in the euro area could hurt exporters of agricultural products such as beef, coffee, tea, tobacco, cotton, and textiles from Botswana, Ethiopia, Madagascar and Malawi. “The faster-than-expected deceleration of the global economy and increased volatility of commodity prices could hurt many SSA commodity exporters,” said World Bank President David Malpass.
Malpass indicated that subdued growth in the global markets for Botswana and other Sub Saharan exports will likely persist throughout the decade because of weak investment in most of the world.
He noted that with inflation now running at multi-decade highs in many countries and supply expected to grow slowly, inflation could remain higher for longer than currently anticipated. “Even if a global recession is averted, the pain of stagflation could persist for several years— unless major supply increases are set in motion. Amid the war in Ukraine, surging inflation, and rising interest rates, global economic growth is expected to slump in 2022. Several years of above-average inflation and below-average growth are now likely,” said Malpass.