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Inefficiency and corruption cripples Botswana’s economic diversification

Ndulamo Anthony Morima

EAGLE WATCH

As gleaned from this year’s Budget Speech, Government, at least at a policy and programme level, prioritises economic diversification. The question is: does Government, in effect, do enough to attain economic diversification?   

According to the Minister of Finance & Economic Development, Honourable Kenneth Matambo, “… efforts by the Government to diversify the domestic economy continue to yield positive results, as evidenced by the decline in the share of mining sector in the value addition, with a corresponding increase in the contribution of the non-mining sectors…”

He continued to say that “… mining sector’s share to the Gross Domestic Product (GDP) declined from 25 percent in 2008 to 18 percent in 2018, while the contribution of non-mining sectors increased from 75 percent to 82 percent over the same period…” What this means is that, for a period of ten years, the mining sector’s share to the GDP declined by seven percent, while the contribution of non-mining sectors increased by seven percent. The question is: is this percentage the best that Botswana could have attained, all factors considered.

In my view, though the first half of the period 2008 to 2018 was during the world economic recession, Botswana could have attained ten percent or more were it not for the inefficiencies and corruption bedevilling Government. The Selibe Phikwe Economic Diversification Unit (SPEDU) project, which failed to diversify the economy of Selibe Phikwe and surrounding villages away from copper and nickel reliance until the closure of the Selibe Phikwe mine, is one typical example of how inefficiency cripples Government’s economic diversification goals.

That Government has approved a set of incentives for the SPEDU region, which include five percent corporate tax rate for the first five years and ten percent thereafter, for companies setting up in the SPEDU region, under the sectors of tourism, agriculture, and manufacturing, as Honourable Matambo assets, has long been known.

The same applies to the fact that twelve companies were assessed and ten have been approved. The question is: has there been stimulation of economic activity in the Agri-business; Manufacturing; Infrastructure Development; and Information, Communication and Technology sectors as had been envisaged?

The fact is that since 2008 when the SPEDU programme was established Government has failed to diversify the economy of Selibe Phikwe and surrounding villages. Therefore, Government’s pledge to intensify its effort to facilitate such growth in the coming years rings empty.
It, therefore, cannot be correct, as Honourable Matambo claims, that this, that is, the seven percent performance, is consistent with the Government’s efforts to reduce the dependence of the economy on the mining sector, which is susceptible to external shocks.

That there is need to intensify efforts to diversify the country’s exports and government revenue sources as Honourable Matambo assets is stating the obvious. In Honourable Matambo’s own admission, “… diamonds exports continue to dominate the trade account, while mineral and customs revenues account for over two-thirds of government revenues…”  Since we have known this from time immemorial, the question is: how many manufacturing industries, for instance, has Government played a role in establishing?

Granted, government needs to be commended for assisting some entrepreneurs to, through the African Growth and Opportunity Act (AGOA) programme, venture into the textile industry, but there has been little or no progress in the manufacturing sector. Despite the fact we have two abattoirs which supply a market as large as Europe with beef, Government has failed to facilitate or promote the establishment of a manufacturing industry for such products as leather, glue, etc.    

In one of the few instances that government attempted to use manufacturing to diversify the economy, that is, the Fengyue Palapye Glass Project, inefficiency and corruption had the upper hand, resulting in loss of millions of Pula since the project was sponsored by the public purse through the Botswana Development Corporation (BDC). Consequently, as Honourable Matambo admits, “… the country’s dependency on one commodity for exports, and two major sources of revenues, i.e. mineral and customs revenues, poses a systemic risk to our economy…”

Though Honourable Matambo claims that Government pledges to continue with efforts to diversify the economy in general, and its exports and government revenues, in particular, there is little evidence to support that. As Honourable Matambo stated during this year’s Budget Speech, “… one of the strategic initiatives identified to promote economic diversification is the Economic Diversification Drive (EDD), which was established in April 2010…”

The question is: did Government maximally use its purchasing power to support local production of goods and services as per EDD’s dictates? In my view, the fact that only P17.2 billion or 53 percent of the total cumulative amount of P32.5 billion worth of goods and services purchased by Government since the inception of the programme, was from local manufacturers and service providers leaves a lot to be desired. There is no reason why we should not have scored at least 80 percent in this area.

The only reason why such a noble economic diversification tool as the EDD has not been adequately leveraged on is that the award of tenders to local manufacturers and service providers was hampered by either inefficiency or corruption or both. When the Special Economic Zones (SEZ) policy was adopted in 2011 many had hope that it would bring a bumper harvest in as far as economic diversification is concerned. Indeed, it was Government’s hope that the SEZ would contribute to the diversification of the economic and export base of the country.

Yet, in Honourable Matambo’s own admission, to date, about nine years since the SEZ policy was adopted, the only thing we have done is to identify the Special Economic Zones. Other than that, the only thing the minister could report to the nation is that the Special Economic Zones will be developed in two Phases. If this is not inefficiency, I do not know what inefficiency is.Government has, as another initiative aimed at promoting economic diversification, the Cluster Development Initiative (CDI) which, as Honourable Matambo asserts, is aimed at improving business productivity, value chains and competitiveness.

But, just like with the SEZ we have not gone beyond prioritisation. According to Honourable Matambo, preparatory work is underway to develop business case studies and implementation plans for the first three clusters selected for implementation, namely; tourism, beef and finance and knowledge intensive business services. We are yet to do something as basic as conducting detailed studies which, according to Honourable Matambo, will include the assessment of capacity building needs for the identified sectors as part of measures to enhance their domestic and global competitiveness.

As a result of Government’s failure to implement the CDI, Small, Medium and Micro Enterprises (SMMEs) with potential to grow this economy, lack the capacity to effectively compete with multinational and regional industries. The noble plans that Government had to assist SMMEs with such infrastructural intervention as power distribution, water reticulation, telecommunication and drainage and pollution control have remained a pipe dream.

The same applies to the plan to set up common facility centres for balancing or improving production lines such as marketing centres. How then can the private sector, which is critical for economic diversification, grow? Without a vibrant private sector, how can there be employment creation? No wonder our unemployment rate is as high as 20%. Without employment creation, how can there be poverty eradication?

In view of the aforegoing, one can conclude that Botswana’s failure to diversify its economy away from diamonds is not because it has no viable plans to do so, but it is because of either inefficiency or corruption or both. Botswana missed an opportunity to diversify its economy when it used the Economic Stimulus Package (ESP) for populist and unsustainable projects for political expediency. These projects hardly had any impact on economic growth and diversification since they were mainly sustenance based.

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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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