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Bashi’s Pitch: Should Government Hearken?

David Magang


View From Mana House


The other day, I read an article with regard to how the  charismatic and youthful BDC Managing Director Bashi Gaetsaloe gave a “polished performance”  before the Parliamentary Committee on Statutory Bodies and State Enterprises in one of the Friday papers.


The previous week, newspaper reports gave us to understand that BDC was seeking a P1 billion injection into the troubled corporation, or something of the sort, from Finance Minister Honourable Ontefetse Kenneth Matambo. Incidentally, it has now become fashionable for every state-owned enterprise – NDB, BMC, Botswana Post, etc – to prostrate itself before a government that is critically strapped for cash as never before and solicit for at least P1 billion as if that kind of money is liable to materialise simply by waving a magic wand.


Anyway, it emerged that the MD was in fact not asking for P1 billion but four times that sum. The scribes made a point of making mention of the fact that the MD was as cool as a cucumber when he made his pitch, as if he knew in his heart of hearts that despite its misgivings, Government was certain to acquiesce at long last and grant his wish. This air of gravitas I greatly admire: I too did evince a similar poise and mindset when for years on end I tried to prevail over heart-of-oak bank managers, not to mention BDC itself as a banker of last resort,  to extend lines of credit in the context of a then hard-up Phakalane. I knew I was in seriously straitened circumstances but rather than wear my woes on my sleeve, I kept up a calm exterior.  


BDC wants P4 billion to help make a reality of its 5-year strategy, which encompasses the years 2014 to 2019.  That strategy reportedly includes buoying up micro lending behemoth Letshego – a company, paradoxically, that is so awash with cash it could hand BDC a lifeline – and a host of other investments that fell far short of swaying the Guma Moyo-headed Parliamentary Committee.           


Should Honourable Matambo oblige? Must BDC get a shot in the arm it prays for? 


 


BDC HASN’T IMPRESSED


 Let me first register my own, disillusioned verdict on BDC as a private citizen.


In the 46 years that it has been in existence, BDC’s impact in relation to helping foster the well-being of the economy has been marginal if not wholly inconsequential. And I’m not the only upholder of such a disparaging view: voices from more authoritative quarters have pronounced likewise. As recently as 2011, the Bank of Botswana by way of its annual report averred that, “there is uncertainty with respect to the durability of the contribution to economic development of the investments they (BDC) have supported”.  


BDC’s slew of failed partnerships read like a trademark Stephen King horror. Hyundai Motor Distributors, Lobatse Tiles, Golden Fruit, and – horror of horrors – Fengyue: the list goes on and on. This is not to mention perennial loss-makers which need round-the-clock intensive care and on-going cash infusions such as Can Manufacturers for instance.    


Indeed, one is prompted to ask: of BDC’s more than 100 investments to date, how many are still chugging? Which of these can BDC proudly showcase as props to the macroeconomy? We know BDC policy is to invest and then divest when the partner is robust enough to stand on its own two feet, but if   the overwhelming majority of such divestures at some stage routinely keel over, it stands to reason that their potential must have been a charade, that BDC let go of them rather prematurely. What that speaks of BDC as an entrepreneurial chaperone need not be over-emphasised.


Another question worth posing is this: of BDC’s still standing erstwhile partnerships, those it has long divested from, how many are citizen-controlled? (Curiously, citizen-economic empowerment does not feature on the corporation’s 5-point mandate).   These are the sort of statistics we would love to see in the annual reports of the country’s principal development finance institution (DFI) and therefore a key empowerment vehicle. Unfortunately, such illuminating statistics are conspicuous by their absence in the company’s otherwise eye-catching annual reports.


Passing statements such as “also empowered Batswana as most of these businesses ended up in the hands of local citizens” or “a continued effort to promote citizen economic empowerment, both through development of policies to guide the bigger picture as well as the taking of deliberate decisions that promote citizen economic empowerment in awarding contracts” as per the 2015 annual report simply do not suffice. There is need to furnish specifics in reasonable detail.


Since the corporation now accentuates employment creation on its list of priorities, how many jobs have arisen since inception in 1970 through its instrumentality? The MD told the Parliamentary Committee that so far, BDC has created 4000 jobs.  That translates to about 86 per year, a most trifling figure. If in 46  years, BDC has engendered no more than 4000  jobs, how are we to trust to its undertaking  that it would serve up 1300 more jobs on the double if Government bolstered it with a further P1 billion?     


 


BDC CULPABLE IN PHIKWE FATE


 Recently, I penned a lament of the fate of BCL Mine and the necessity and criticality of keeping it on life support considering its economic vitality to the residents of Selibe Phikwe and even to certain parastatals.  Sadly, my plea fell on deaf ears. Government has just pronounced the last rites on the 42-year-old mine. My heart goes out to the thousands who will lose a cherished source of livelihood and thousands still who rely on their support.   


If Phikwe is now headed the way of a ghost town Detroit-like as seems likely, BDC shares part of the blame. The demise of BCL, as with all mines, was anticipated as early as the 90s. One does not need a crystal ball to predict the cessation of an extractive venture such as a mine: minerals finally run out at some stage as a matter of course.


With that in mind, Government mandated BDC in the 90s to head-start the economic diversification of Selebi Phikwe since a stitch in time saved nine. BDC in time set up factory shells there and courted local and foreign investors alike to utilise them and commence productive activities as an insurance policy when crunch time came in respect of BCL. The BDC effort was a spectacular failure. Today, virtually all the shells BDC established are either empty or have been vandalised.


Indeed, the reason SPEDU came into being was to help fill the void BDC had left. Had BDC made a success of its commission, there would be no SPEDU.


As far as BCL is concerned, BDC has no blood on its hands but in terms of the now precarious state of Selibe Phikwe, it certainly is culpable. 


         


TAKE A LOOK AT IDC


 The strictures I pass on BDC do not spring from emotion: they are well-informed. In neighbouring South Africa, their equivalent of BDC is IDC (Industrial Development Corporation). The profiles of the two DFIs cannot be more dissimilar.  


Reading the opening pages of the BDC annual report, one encounters a whole panoply of snippets of self-obsessed financial milestones. “Company profit after tax increased by 215% from a loss of P77.6 million in 2014 to P89.4 million in 2015”; “BDC Group revenue increased by 19% from P286.7 million in 2014 to P339.9 million in 2015”; “BDC Group asset base increased by 8% from P3.6 billion in 2014 to P3.9 billion in 2015”; etc. BDC comes first: everything else is secondary.


Contrast that with the altruistic slant of an IDC report. IDC focuses on its achievements in the broader macroeconomic context and not its own bottom line. For example, its 2014 report was devoted to spelling out what it had done for the economy and the black population over 20 years of democratic rule.


During the period under review, IDC invested R128 billion in the South Africa economy and created 360,000 jobs – roughly the population of Gaborone – translating to 18,000 per year. More than R48 billion (R64 billion in 2013 prices) was approved for funding black empowered companies over the period. Furthermore, more than 70% of the number and 18% of the value of funding approvals IDC made was for SMMEs, with wholesale funding and franchising playing an important role.


IDC itemised the extent to which it had helped diversify the economy, particularly the mining industry; beneficiated South African minerals; and promoted Black Economic Empowerment ownership and participation in gold, platinum, and chrome mining.


When the 2008 global economic crisis struck, IDC, not government, made available R6.1 billion to distressed companies as commercial funders reduced credit extension, thereby positively impacting 44,000 jobs that would otherwise have been lost in lay-offs and outright redundancies.  And only recently, in October 2015, IDC honoured 12 of its long-standing clients, representing some of the many champions of South African industry who have their roots with the highly illustrious corporation.


How does BDC measure up to IDC? The two are simply no match: it is a no-contest really. This staggering disparity arises from the fact that whereas BDC is profit-oriented, IDC is first and foremost development oriented.


 


MAYBE WE SHOULD GIVE BASHI A CHANCE


In his MD Statement of the 2015 annual report, Bashi Gaetsaloe underlines the fact that BDC has P10 billion worth of projects   he’s convinced will “prove to be the engine that fuels growth for BDC and drives private sector development and job creation”. Should Government take a chance and proceed to bankroll them?


If BDC has to date been the proverbial White Elephant, the young MD just might be the person to turn this White Elephant into a Golden Elephant ala IDC. As such, I move that Government obliges him, in incremental but substantial capitalisation bursts, subject, albeit, to a rigorous vetting mechanism. 


First, a project should have palpable potential to yield meaningful job creation given that joblessness is our country’s most serious malady today. We want reasonable numbers and not token figures. Accordingly, labour-intensive projects must of necessity take precedence.   


Second, projects should not be concentrated in Gaborone or metropolitan areas alone. A balance ought to be struck between urban and rural settings since Gaborone is not all there is to the Republic of Botswana. Employment creation should permeate every part of the country instead of being restricted to “privileged” locales only. 


Third, projects should be financed only if there’s a sizeable component of citizen involvement and if SMME’s are certain to be secondary beneficiaries, such as through material procurement or sub-contracting for example.


Fourth, where they are not service-oriented, projects should incline toward export promotion by way of manufacturing, assembly, or re-processing Singapore-style. Import-substitution should be the watchword as we cannot afford to import practically everything from Big Brother next door till Kingdom come.


Fifth, projects that have proven to be thunderclap failures in the past, such as automobile assembly, should not be honoured with a reprise.  This makes the proposed P280 million automotive plant a non se quitor as far as I’m concerned.

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Export Processing Zones: How to Get SEZA to Sizzle

23rd September 2020
Export Processing Zone (EPZ) factory in Kenya

In 2005, the Business & Economic Advisory Council (BEAC) pitched the idea of the establishment of Special Economic Zones (SEZs) to the Mogae Administration.

It took five years before the SEZ policy was formulated, another five years before the relevant law was enacted, and a full three years before the Special Economic Zones Authority (SEZA) became operational.

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Egypt Bagged Again

23rd September 2020
Samson

… courtesy of infiltration stratagem by Jehovah-Enlil’s clan

With the passing of Joshua’s generation, General Atiku, the promised peace and prosperity of a land flowing with milk and honey disappeared, giving way to chaos and confusion.

Maybe Joshua himself was to blame for this shambolic state of affairs. He had failed to mentor a successor in the manner Moses had mentored him. He had left the nation without a central government or a human head of state but as a confederacy of twelve independent tribes without any unifying force except their Anunnaki gods.

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‘RO, ‘RO ‘RO YOUR ‘BOT

23rd September 2020

If I say the word ‘robot’ to you,  I can guess what would immediately spring to mind –  a cute little Android or animal-like creature with human or pet animal characteristics and a ‘heart’, that is to say to say a battery, of gold, the sort we’ve all seen in various movies and  tv shows.  Think R2D2 or 3CPO in Star Wars, Wall-E in the movie of the same name,  Sonny in I Robot, loveable rogue Bender in Futurama,  Johnny 5 in Short Circuit…

Of course there are the evil ones too, the sort that want to rise up and eliminate us  inferior humans – Roy Batty in Blade Runner, Schwarzenegger’s T-800 in The Terminator,  Box in Logan’s Run,  Police robots in Elysium and  Otomo in Robocop.

And that’s to name but a few.  As a general rule of thumb, the closer the robot is to human form, the more dangerous it is and of course the ultimate threat in any Sci-Fi movie is that the robots will turn the tables and become the masters, not the mechanical slaves.  And whilst we are in reality a long way from robotic domination, there are an increasing number of examples of  robotics in the workplace.

ROBOT BLOODHOUNDS Sometimes by the time that one of us smells something the damage has already begun – the smell of burning rubber or even worse, the smell of deadly gas. Thank goodness for a robot capable of quickly detecting and analyzing a smell from our very own footprint.

A*Library Bot The A*Star (Singapore) developed library bot which when books are equipped with RFID location chips, can scan shelves quickly seeking out-of-place titles.  It manoeuvres with ease around corners, enhances the sorting and searching of books, and can self-navigate the library facility during non-open hours.

DRUG-COMPOUNDING ROBOT Automated medicine distribution system, connected to the hospital prescription system. It’s goal? To manipulate a large variety of objects (i.e.: drug vials, syringes, and IV bags) normally used in the manual process of drugs compounding to facilitate stronger standardisation, create higher levels of patient safety, and lower the risk of hospital staff exposed to toxic substances.

AUTOMOTIVE INDUSTRY ROBOTS Applications include screw-driving, assembling, painting, trimming/cutting, pouring hazardous substances, labelling, welding, handling, quality control applications as well as tasks that require extreme precision,

AGRICULTURAL ROBOTS Ecrobotix, a Swiss technology firm has a solar-controlled ‘bot that not only can identify weeds but thereafter can treat them. Naio Technologies based in southwestern France has developed a robot with the ability to weed, hoe, and assist during harvesting. Energid Technologies has developed a citrus picking system that retrieves one piece of fruit every 2-3 seconds and Spain-based Agrobot has taken the treachery out of strawberry picking. Meanwhile, Blue River Technology has developed the LettuceBot2 that attaches itself to a tractor to thin out lettuce fields as well as prevent herbicide-resistant weeds. And that’s only scratching the finely-tilled soil.

INDUSTRIAL FLOOR SCRUBBERS The Global Automatic Floor Scrubber Machine boasts a 1.6HP motor that offers 113″ water lift, 180 RPM and a coverage rate of 17,000 sq. ft. per hour

These examples all come from the aptly-named site www.willrobotstakemyjob.com    because while these functions are labour-saving and ripe for automation, the increasing use of artificial intelligence in the workplace will undoubtedly lead to increasing reliance on machines and a resulting swathe of human redundancies in a broad spectrum of industries and services.

This process has been greatly boosted by the global pandemic due to a combination of a workforce on furlough, whether by decree or by choice, and the obvious advantages of using virus-free machines – I don’t think computer viruses count!  For example, it was suggested recently that their use might have a beneficial effect in care homes for the elderly, solving short staffing issues and cheering up the old folks with the novelty of having their tea, coffee and medicines delivered by glorified model cars.  It’s a theory, at any rate.

Already, customers at the South-Korean  fast-food chain No Brand Burger can avoid any interaction with a human server during the pandemic.  The chain is using robots to take orders, prepare food and bring meals out to diners.  Customers order and pay via touchscreen, then their request is sent to the kitchen where a cooking machine heats up the buns and patties. When it’s ready, a robot ‘waiter’ brings out their takeout bag.   

‘This is the first time I’ve actually seen such robots, so they are really amazing and fun,’ Shin Hyun Soo, an office worker at No Brand in Seoul for the first time, told the AP. 

Human workers add toppings to the burgers and wrap them up in takeout bags before passing them over to yellow-and-black serving robots, which have been compared to Minions. 

Also in Korea, the Italian restaurant chain Mad for Garlic is using serving robots even for sit-down customers. Using 3D space mapping and other technology, the electronic ‘waiter,’ known as Aglio Kim, navigates between tables with up to five orders.  Mad for Garlic manager Lee Young-ho said kids especially like the robots, which can carry up to 66lbs in their trays.

These catering robots look nothing like their human counterparts – in fact they are nothing more than glorified food trolleys so using our thumb rule from the movies, mankind is safe from imminent takeover but clearly  Korean hospitality sector workers’ jobs are not.

And right there is the dichotomy – replacement by stealth.  Remote-controlled robotic waiters and waitresses don’t need to be paid, they don’t go on strike and they don’t spread disease so it’s a sure bet their army is already on the march.

But there may be more redundancies on the way as well.  Have you noticed how AI designers have an inability to use words of more than one syllable?  So ‘robot’ has become ‘bot’ and ‘android’ simply ‘droid?  Well, guys, if you continue to build machines ultimately smarter than yourselves you ‘rons  may find yourself surplus to requirements too – that’s ‘moron’ to us polysyllabic humans”!

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