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COVID-19 Economic Stimulus Programme (ESP): lessons from the 2016 ESP

There is no doubt that by the end of its reign, COVID-19 will have denigrated the world economy, including that of Botswana, which had hitherto been one of the world’s fastest growing and stable economies.

Before COVID-19, Botswana’s economic outlook was rated as stable by the world’s leading ratings agencies, Moody’s and Standard & Poor’s. On 29th October 2017, Standard & Poor’s rated Botswana at A- with a stable outlook. On 27th March 2020, Standard & Poor’s rated Botswana at BBB+ with a stable outlook.

Come 29th May 2020, about two months since the State of Public Emergency (SoPE) and the national lockdown, Moody’s gave Botswana an A2 rating with a negative outlook. The last time Botswana had a negative outlook was on 29th April 2016 when it was rated at A- with a negative outlook by Standard & Poor’s.

It is needless to say that in order to recover from such a negative economic outlook, Botswana, like all countries of the world, must embark on austerity measures and economic stimulation. As you may be aware, since the national lockdown, government introduced such measures as wage subsidies, food hampers, loan guarantees for the private sector, tax concessions, e.t.c.

Commendable as these measures are, they should not be regarded as economic stimulation; they are mere economic relief measures mearnt to mitigate the effects of COVID-19 on individuals and businesses.

In fairness to government, it knows as much, hence the pronouncement by the Minister of Finance and Economic Development, Honourable Dr. Thapelo Matsheka, that government is working on an Economic Stimulus Programme (ESP) to address the effects of COVID-19.

So, post-COVID-19, we will need a well thought out ESP. Inevitably, we will also need austerity measures. I know that austerity measurers are not popular with the masses, but my view is that it will be difficult to arise from COVID-19 with only economic stimulation. Austerity measures, painful as they may be for our people, will be necessary.

In this article, however, I only look at economic stimulation. Austerity measurers will be the subject of next week’s article. In looking at economic stimulation, I, based on the 2016 ESP experiences, make suggestions on how the COVID-19 ESP could be made better. I think if government can learn from the lessons of the 2016 ESP, it can develop a better COVID-19 ESP.

As you may be aware, in 2016 Government embarked on an ESP. This, Government said, was to address the slower growth and greater uncertainty which Botswana’s economy had experienced since the worldwide economic slowdown of 2008.

As stated earlier, on 29th April 2016 Botswana was rated at A- with a negative outlook by Standard & Poor’s. So, there was economic rationale for the ESP. The goals of the 2016 ESP were to stimulate the economy; diversify the economy through the Economic Diversification Drive (EDD) and Special Economic Zones (SEZs); and to accelerate job creation.

The targeted sectors/areas were Agricultural Production; Tourism Development; Economic Diversification Drive; Manufacturing; Buildings and Road construction and maintenance; Re-skilling of Youth; and Establishment of Special Economic Zones.

Through the 2016 ESP, Government intended to use its expenditure to expand the economy through accelerated economic diversification, while creating employment opportunities in the country, including growth in the private sector.

Government also intended to accelerate job creation, eradicate abject poverty; provide world class education as well as improve the health and wellbeing of all Batswana.

More fundamentally, the 2016 ESP was intended to be a bold blueprint for the urgent delivery of national priorities. Also, the programme was intended to entail increased public spending on short, medium and longer-term initiatives.

There is no doubt that these were noble goals indeed. The question is: were they attained? Of course, many of these were long term goals which could not be achieved through the 2016 ESP alone.

So, the first lesson from the 2016 ESP is that in developing the COVID-19 ESP, government should set realistic and attainable goals.

But before we seek to draw more lessons from the 2016 ESP, we need to assess how the economy performed following the stimulus. We use such simple measures as employment creation; poverty reduction and economic diversification.

We start with employment creation. In 2015, prior to the ESP, Botswana’s general unemployment rate was 17.96%. From 2016 the unemployment rate became 17.96%; 17.63%; 17.94% and 18.20% for the years 2016; 2017; 2018 and 2019 respectively.

So, after the 2016 ESP, there was a reduction of 0.33% in 2017. There was, however, an increase of 0.31% and 0.26% in 2018 and 2019 respectively.

We turn to youth unemployment. In 2015, prior to the ESP, Botswana’s youth unemployment rate was 36.83%. From 2016 the unemployment rate became 36.8%; 36.57%; 36.14% and 37.52% for the years 2016; 2017; 2018 and 2019 respectively.

So, after the 2016 ESP, there was a reduction of 0.3% and 0.23% in 2016 and 2017 respectively. There was, however, an increase of 0.57% and 0.38% in 2018 and 2019 respectively.

We turn to economic diversification. According to the World Bank, the diamond industry is still an important driver of growth in Botswana, being the single largest contributor to government revenues and accounting 80% of export earning.

On the contrary, Agriculture’s contribution to the GDP has deteriorated from 2015, it having been 2.20%; 2.05%; 1.99% and 2.00% for the year 2015; 2016; 2017 and 2018 respectively.

Travel and tourism have done better than Agriculture, they having been 13.5%; 12.7%; 13.3%; 13.4% and 13.4% for the year 2015; 2016; 2017; 2018 and 2019 respectively.

Therefore, despite introducing the Economic Diversification Drive (EDD) and Special Economic Zones (SEZs), government has failed to diversify the economy, something which has evaded government since independence in 1966.

So, despite the 2016 ESP, most economic fundamentals have declined since 2016. Of course, the decline cannot be wholly attributable to the 2016 ESP, but one thing we can be sure about is that the 2016 ESP did very little to help the situation, especially that there has been no major world economic downturn since 2016.

Why then did the 2016 ESP not help the situation? Firstly, in my view, Batswana were not meaningfully consulted, resulting in little buy in and low uptake of the programme.

There was a view, at the time, that the ruling Botswana Democratic Party(BDP) hurried the programme in order to ‘buy’ votes for the 2019 general elections after its dismal performance in 2014 which nearly saw the Umbrella for Democratic Change(UDC) force a hung Parliament.

This view was fortified by the fact that instead of the programme being led by civil servants, it was led by politicians. This followed statements by some in the BDP that some civil servants, who were aligned to the opposition, had the propensity to sabotage government programmes to portray the BDP as incapable of governing.

Secondly, perhaps because of the hurried manner in which government implemented the programme, most programmes which were funded were not sustainable. In fact, many did not even address the areas which government had identified as key for economic growth.

For instance, despite government identifying manufacturing as one of the target arears, no single manufacturing industry was started or upscaled as part of the 2016 ESP.

Also, despite government identifying re-skilling of youth as one of the target arears, very little has been done in that regard. No wonder youth unemployment remains as high as 37.52% four years since the 2016 ESP.

The main beneficiaries of the 2016 ESP were buildings and road construction and maintenance, perhaps because they were easy to do. Some say this is because such projects would be visible enough to be used for election campaigns.

Others say, corruption could easily be done through such projects since most participants in that regard are tenderpreneurs who rely on political patronage for tenders.

However, despite the backlog in classrooms and laboratories in our schools, for instance, which contribute to the high student-teacher ratio, very little was done in that regard. Very little was also done in building toilets and ablution blocks.

Consequently, government is now battling with building additional classrooms, laboratories, toilets and ablution blocks in view of the COVID-19 pandemic.

Also, despite government identifying the improvement of health and wellbeing of all Batswana as a priority area very little has been done in that regard. Many clinics and hospitals still some from shortage of manpower, equipment and medication.

In my view, if the COVID-19 ESP is to be successful, government needs to meaningfully involve Batswana in the programme development. Also, government must set realistic and attainable goals.

Perhaps most importantly, government has to focus on sustainable projects which will meaningfully diversify the economy and reduce unemployment and poverty among our people.

For this to be possible, policy makers must give strategic direction and leave the project implementation to civil servants.

*Ndulamo Anthony Morima, LLM(NWU); LLB(UNISA); DSE(UB); CoP (BAC); CoP (IISA) is the proprietor of Morima Attorneys. He can be contacted at 71410352 or anmorima@gmail.com

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The Daring Dozen at Bari

8th December 2020
JEFF---Batswana-smoke-unit

Seventy-seven years ago, on the evening of December 2, 1943, the Germans launched a surprise air raid on allied shipping in the Italian port of Bari, which was then the key supply centre for the British 8th army’s advance in Italy.

The attack was spearheaded by 105 Junkers JU88 bombers under the overall command of the infamous Air Marshal Wolfram von Richthofen (who had initially achieved international notoriety during the Spanish Civil War for his aerial bombardment of Guernica). In a little over an hour the German aircraft succeeded in sinking 28 transport and cargo ships, while further inflicting massive damage to the harbour’s facilities, resulting in the port being effectively put out of action for two months.

Over two thousand ground personnel were killed during the raid, with the release of a secret supply of mustard gas aboard one of the destroyed ships contributing to the death toll, as well as subsequent military and civilian casualties. The extent of the later is a controversy due to the fact that the American and British governments subsequently covered up the presence of the gas for decades.

At least five Batswana were killed and seven critically wounded during the raid, with one of the wounded being miraculously rescued floating unconscious out to sea with a head wound. He had been given up for dead when he returned to his unit fourteen days later. The fatalities and casualties all occurred when the enemy hit an ammunition ship adjacent to where 24 Batswana members of the African Pioneer Corps (APC) 1979 Smoke Company where posted.

Thereafter, the dozen surviving members of the unit distinguished themselves for their efficiency in putting up and maintaining smokescreens in their sector, which was credited with saving additional shipping. For his personal heroism in rallying his men following the initial explosions Company Corporal Chitu Bakombi was awarded the British Empire Medal, while his superior officer, Lieutenant N.F. Moor was later given an M.B.E.

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A Strong Marriage Bond Needs Two

8th December 2020

Remember: bricks and cement are used to build a house, but mutual love, respect and companionship are used to build a HOME. And amongst His signs is this: He creates for you mates out of your own kind, so that you may find contentment (Sukoon) with them, and He engenders love and tenderness between you; in this behold, there are signs (messages) indeed for people who reflect and think (Quran 30:21).

This verse talks about contentment; this implies companionship, of their being together, sharing together, supporting one another and creating a home of peace. This verse also talks about love between them; this love is both physical and emotional. For love to exist it must be built on the foundation of a mutually supportive relationship guided by respect and tenderness. As the Quran says; ‘they are like garments for you, and you are garments for them (Quran 2:187)’. That means spouses should provide each other with comfort, intimacy and protection just as clothing protects, warms and dignifies the body.

In Islam marriage is considered an ‘ibaadah’, (an act of pleasing Allah) because it is about a commitment made to each other, that is built on mutual love, interdependence, integrity, trust, respect, companionship and harmony towards each other. It is about building of a home on an Islamic foundation in which peace and tranquillity reigns wherein your offspring are raised in an atmosphere conducive to a moral and upright upbringing so that when we all stand before Him (Allah) on that Promised Day, He will be pleased with them all.

Most marriages start out with great hopes and rosy dreams; spouses are truly committed to making their marriages work. However, as the pressures of life mount, many marriages change over time and it is quite common for some of them to run into problems and start to flounder as the reality of living with a spouse that does not meet with one’s pre-conceived ‘expectations’. However, with hard work and dedication, couples can keep their marriages strong and enjoyable. How is it done? What does it take to create a long-lasting, satisfying marriage?

Below are some of the points that have been taken from a marriage guidance article I read recently and adapted for this purposes.

POSITIVITY
Spouses should have far more positive than negative interactions. If there is too much negativity — criticizing, demanding, name-calling, holding grudges, etc. — the relationship will suffer. However, if there is never any negativity, it probably means that frustrations and grievances are not getting ‘air time’ and unresolved tension is accumulating inside one or both partners waiting to ‘explode’ one day.

“Let not some men among you laugh at others: it may be that the (latter) are better than the (former): nor let some women laugh at others: it may be that the (latter) are better than the (former): nor defame nor be sarcastic to each other, nor call each other by (offensive) nicknames.” (49:11)

We all have our individual faults though we may not see them nor want to admit to them but we will easily identify them in others. The key is balance between the two extremes and being supportive of one another. To foster positivity in a marriage that help make them stable and happy, being affectionate, truly listening to each other, taking joy in each other’s achievements and being playful are just a few examples of positive interactions.
Prophet Muhammad (PBUH) said: “The believers who show the most perfect faith are those who have the best character and the best of you are those who are best to their wives”

UNDERSTANDING

Another characteristic of happy marriages is empathy; understanding your spouses’ perspective by putting oneself in his or her shoes. By showing that understanding and identifying with your spouse is important for relationship satisfaction. Spouses are more likely to feel good about their marriage and if their partner expresses empathy towards them. Husbands and wives are more content in their relationships when they feel that their partners understand their thoughts and feelings.

Successful married couples grow with each other; it simply isn’t wise to put any person in charge of your happiness. You must be happy with yourself before anyone else can be.  You are responsible for your actions, your attitudes and your happiness. Your spouse just enhances those things in your life. Prophet Muhammad (PBUH) said: “Treat your women well and be kind to them for they are your partners and committed helpers.”

COMMITMENT

Successful marriages involve both spouses’ commitment to the relationship. The married couple should learn the art of compromise and this usually takes years. The largest parts of compromise are openness to the other’s point of view and good communication when differences arise.

When two people are truly dedicated to making their marriage work, despite the unavoidable challenges and obstacles that come, they are much more likely to have a relationship that lasts. Husbands and wives who only focus on themselves and their own desires are not as likely to find joy and satisfaction in their relationships.

ACCEPTANCE

Another basic need in a relationship is each partner wants to feel valued and respected. When people feel that their spouses truly accept them for who they are, they are usually more secure and confident in their relationships. Often, there is conflict in marriage because partners cannot accept the individual preferences of their spouses and try to demand change from one another. When one person tries to force change from another, he or she is usually met with resistance.

However, change is much more likely to occur when spouses respect differences and accept each other unconditionally. Basic acceptance is vital to a happy marriage. Prophet Muhammad (PBUH) said: “It is the generous (in character) who is good to women, and it is the wicked who insults them.”
“Overlook (any human faults) with gracious forgiveness.” (Quran 15:85)

COMPASSION, MUTUAL LOVE AND RESPECT

Other important components of successful marriages are love, compassion and respect for each other. The fact is, as time passes and life becomes increasingly complicated, the marriage is often stressed and suffers as a result. A happy and successful marriage is based on equality. When one or the other dominates strongly, intimacy is replaced by fear of displeasing.

It is all too easy for spouses to lose touch with each other and neglect the love and romance that once came so easily. It is vital that husbands and wives continue to cultivate love and respect for each other throughout their lives. If they do, it is highly likely that their relationships will remain happy and satisfying. Move beyond the fantasy and unrealistic expectations and realize that marriage is about making a conscious choice to love and care for your spouse-even when you do not feel like it.

Seldom can one love someone for whom we have no respect. This also means that we have to learn to overlook and forgive the mistakes of one’s partner. In other words write the good about your partner in stone and the bad in dust, so that when the wind comes it blows away the bad and only the good remains.

Paramount of all, marriage must be based on the teachings of the Noble Qur’an and the teachings and guidance of our Prophet Muhammad (PBUH). To grow spiritually in your marriage requires that you learn to be less selfish and more loving, even during times of conflict. A marriage needs love, support, tolerance, honesty, respect, humility, realistic expectations and a sense of humour to be successful.

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Chronic Joblessness: How to Help Curtail it

30th November 2020
Motswana woman

The past week or two has been a mixed grill of briefs in so far as the national employment picture is concerned. BDC just injected a further P64 million in Kromberg & Schubert, the automotive cable manufacturer and exporter, to help keep it afloat in the face of the COVID-19-engendered global economic apocalypse. The financial lifeline, which follows an earlier P36 million way back in 2017, hopefully guarantees the jobs of 2500, maybe for another year or two.

It was also reported that a bulb manufacturing company, which is two years old and is youth-led, is making waves in Selibe Phikwe. Called Bulb Word, it is the only bulb manufacturing operation in Botswana and employs 60 people. The figure is not insignificant in a town that had 5000 jobs offloaded in one fell swoop when BCL closed shop in 2016 under seemingly contrived circumstances, so that as I write, two or three buyers have submitted bids to acquire and exhume it from its stage-managed grave.

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