Many economists have published detailed models about how steep a curve the movement from middle income status to high status is.
The middle-income trap has left many cabinets and high-powered delegations of experts drawing economic formulas that have left nothing beyond growing bodies of theory and a few actions that have delivered the much sought-after value. Emerging markets still remain emerging markets – a status quo long predicted to remain as such for many lifetimes. A few countries have broken away from the middle-income barriers since the establishment of the World Trade Organisation (WTO). Our republic has been having the same debate for more than a generation whilst our economic diversification debate is still on full steam.
As we confront a changing world and new realities we have to answer difficult questions about where we are and where we are going. As a predominantly import economy, how much value do we derive from this economic model versus in-country capacity building in manufacturing? How is the balance of trade between our exports and our imports? Which value frontiers remain untapped? What can give a genuine jump into a high-income economy? How do we get over the – ‘we are better than most adage and complacency?’ How can our natural endowments be the spring board of international competitiveness? What happens when basic goods run dry because exporters cannot even meet their own home demand?
As a construction industry player, I dream of a belt of vast factories – strong primary industries that mushroom from our cities and towns from Ramokgwebana to Charles Hill and beyond – giving beam and life to our people. Skills are harnessed, transferred and shared with our people as we forge a winning coalition of elevating our country beyond what we are and where we are now. I remember the pride of our fathers when they came back from mines back in the yester years, the mere pride of using their own hands and skills in productivity. They understood their contribution in the value chain. In Selibe Phikwe the ‘unending smoke’ from the BCL Mine represented life for the town and its people. A strong sense of nostalgia and a blend of emotions drew tears for many when for the first time in two generations the smoke failed to rise to the skies. The clear skies were symbolic of the new era a new time and a new reality – all minerals are finite. They are abundant today and they are depleted tomorrow.
Nkosi Mwaba, the former Botswana Export and Manufacturers Association Chairman (BEMA) and the current Chairman of Association Entrepreneurs Botswana (AEB) in a recent documentary commented on the pride of strong, local, vibrant manufacturing sector within our shores. “The global value chain can still be fully optimised for a strong manufacturing backbone in our country. We can support existing local manufactures to compete, increase their quality models and have sufficient capacity to cater for our economy and export. I worked for Bolux, they mastered their raw materials, where they source them at competitive rates, created a strong human capital base and today they do not only supply Botswana they supply the region,” says Mwaba.
Many global case studies support this. Germany was resilient in the 2008 global recession because of small enterprises that are a major contributor to the economy. The recession which changed the economic perking order in Europe acknowledged Germany is a supreme economy which was almost insulated when the global economy weaned in horror.
The rise of nationalism is a wave that is sweeping across different nation-states globally. Exacerbated by the new reality of Covid-19 our regional trade is slowly creating a ‘one man for himself’ atmosphere. One of the senior Executive Managers Teedzani Majaula at Botswana National Productivity Centre (BNPC) asked a question. “What happens when South Africa closes its borders to us? What happen when they switch off their power, fuel and food produce? We have to reach a burning platform which will drive and trigger action,”
His assertions go beyond the normal free market economics argued by the ‘old school’ of markets and economics. The argument of raw materials, cost of production and natural endowments may be a to an extent hindrance towards stabilising critical tenets of our economy and day to day livelihoods for the long term. Israel is one of the largest exporters of produce with a climate similar to ours because of the huge numbers of scientists per capital in the country. What may have been dismissed as bear lands and desert terrains is at the centre of harvesting and exporting thousands of tonnes of produce per year.
The new economic model should look into how much of the import bill should be diverted towards the growth of local manufacturers across different industries. Where there is capacity there is no need for imports where there is a shortage there can be a balanced trade-off which includes imports to mitigate shortages. Moatlholdi Sebabole argues that there has to be a balance between increasing local capacity and disturbing FDIs for the broader health of our GDP. “Any form of protectionism may trigger unwanted circumstances in attracting FDIs. There has to be a well-managed narrative in terms of how this is structured,” he argues.
“Establishment of industries is built on assumptions, the access to raw materials at reasonable costs, labour markets that can deliver value, creation the entire value chain considers the profitability and the profitability growth. Going against this grain in hope of support may trigger unwanted circumstances. However, when the quality of products is good the Government can protect those good,” notes Majaule.
For PPC Botswana, the burning platform has always been how the local manufacturer which used local fly ash from Morupule B for years before the arrangement changed can continue employing Batswana.
The quarries in Kgale, Francistown and Mokolodi are part of a value chain which has strong downstream industry beneficiation. The plant at Gaborone West Industrial are a chemical process of cement production which has emboldened and empowered local applied chemistry experts, chemical engineering gurus amongst others. That entire value is lost when the emphasis is on imports at the expense of establishing a full operation. Materials used in blasting rocks, the people behind the science, the expertise and the blending process of cement drives the conversation about having globally competitive assets that can compete in any part of the globe as outlined by the vision of the National Human Resource Development Strategy. With over BWP120 million paid in taxes, imagine how big an impact the cement industry can be if all players had set up shop in-country.
A lot of good quality players have not seen enough of sunlight in many manufacturing industries, not because they cannot compete but because the products and services which were tailored for the market were overlooked for goods and services from far away. When FDIs come into Botswana they should have different strategic options of setting up not just green field where they start from scratch, they should have options of licensing, joint ventures and buying out local players. This will give a huge return to local players and their shareholders. Indonesia has introduced industry protection for the same reasons. The Motor industry in South Africa is protected against grey imports. In Zimbabwe the cost of importing attracts 100% duty for specific goods which are available in-country.
Our philosophy of supporting local enterprise development, community building and CSI projects for SMMEs is our step of demonstrating that true value should include how players impact and influence SMMEs. We have been part of the community growth and development with our signature rising buildings across the country, a testament to our quality management process. For close to half a century our buildings still stand. Matsiloje, PPC and other local manufacturers have good products, the only thing left is for us to answer the question -what do we want to be. An import economy or a vibrant force of nature that is self-sustaining no matter what?
We are at a crossroads, if sings of Covid-19 are anything to go buy, the future of our manufacturing sector is buying local and enhancing capacity of our home-brewed brands. The avenues for new value frontiers are available. The question is -are we bold enough to take the vital steps to make it happen?
*Dumisani Ncube is Digital Executive at PR Practice
‘BancABC took the time to understand our business. They recognised the potential in us.’
“Our story as business owners begins when we founded SignXpert together in 2013,’ begins Kefilwe Ruwona. I wasn’t always an entrepreneur.
In the years before we formed the business I would help my husband with his signage operation on a part-time basis. I loved to keep myself busy on evenings, weekends and holiday with mostly administrative tasks he didn’t have time for. That’s my strength.”
She continues: “He was working very hard and I could see there was potential in this industry. After a couple of years, I made the big decision to resign from my job, and join him full time to help grow the company. In the beginning, we were very small: a tiny premises with three staff members. But we had everything we needed to make this company a real success, a strong work ethic, good understanding of the industry and a handful of happy customers who were giving us repeat business.”
“However, there was one key ingredient we were missing. The only way to unlock the next level of growth was to upgrade our machinery. We needed top-of-the-line new printers so that we could expand and diversify. But we didn’t have that kind of money, and that’s when we started having a meaningful dialogue with BancABC. They took the time to understand our business and seeing the potential in us, offered us a loan to acquire the machinery we needed to grow — and grow we did,” she smiles.
“The new machines enabled us do a lot of new things that stimulated the business. I estimate that we grew tenfold in a short space of time,’ explains Jackson Ruwona — who currently divides his duties between being the co-owner and front-line operations manager of the business.
‘We have been able to transition into a full-service signage and branding business. Very few citizen-owned SMEs in this industry are able to make that leap,’ he adds, it is the financial backing we have received from BancABC has given us the confidence to scale up. We have qualified for additional funding over time because we always honor our loan agreements. Never missed a payment!”
Ruwona reflects on the COVID-19 shutdowns and the impact they have had on the family business. “During the Lockdowns, our factory was running at full capacity because many of our clients needed us as they responded to the pandemic. We were printing labels for hand sanitizer bottles and new signs for all kinds of workplaces.
We also make branded buffs which are a great alternative to face-masks. We have stayed relevant to the changing needs of our customers. Our marriage gives the business its stability and foundation as we are united in our vision for what this can one day become, we share the workload, the ideas, the setbacks, and the credit — everything is equal.”
GABORONE-BTC’s dynamic infrastructure was recently put to the test when the Company held its first ever virtual Annual General Meeting (AGM) drawing participation from its broad base of shareholders from across the vast geographical reach and directors from outside the country.
The telco-giant leveraged its vast reliable network to seamlessly deliver its first ever virtual AGM ensuring that the two-hour long meeting was without glitches and delivering a superior experience.
“We successfully held out first ever virtual AGM this year. Given the restrictions on gatherings and travel due to the COVID-19 pandemic, as implemented by the Government of Botswana which restrictions are anticipated to prevail in the immediate future and during the rest of the year 2020, this year’s AGM was held virtually through electronic communication where all shareholders participating in the meeting were able to simultaneously hear each other throughout the meeting. It was critical for us to protect lives whilst still providing vital feedback and updates to our valued shareholders,” says Anthony Masunga, the BTC Managing Director.
Celebrating 40 years of progress this year, BTC has the largest shareholder base in the country following its listing in the Botswana Stock Exchange in 2016, which was a watershed moment in economic inclusion.
Independent experts have commended BTC’s infrastructure and its international strategic partnerships as a national strategic asset which can be the base point of national digitilisation. The Corporation recently joined the Microsoft Partner Network as a registered value-added reseller, launching a wide range of services that enable customers to unlock immense value whilst driving the National economy. To showcase this capability, BTC hosted a virtual AGM and successfully demonstrated its capability to deliver a seamless digital event.
BTC now sells and supports some household brand name solutions such as Microsoft Office 365, including Microsoft Teams utilised by businesses across the economic spectrum. Also, by leveraging the Microsoft public cloud platform, Microsoft Azure, BTC is able to bring hyperscale cloud computing power to Botswana. The home-bred Telco continues to innovate and reaffirm its position as a pioneer in the local technology space.
GABORONE – In their continued efforts to further drive the Youth Employability and Entrepreneurship agenda, Stanbic Bank Botswana AcceleR8 and Statistics Botswana have today, signed a Memorandum of Understanding (MoU).
The partnership is in line with the Bank’s strategic outlook to provide support and thought leadership that contributes towards increased usage of statistics for planning and decision making. Furthermore, it will allow both entities to enhance the effectiveness of their National development efforts in areas of common interest, particularly with regard to changing the Youth Employment and Entrepreneurship narrative.
Speaking at the event, which was held at the Bank’s Acceler8, Stanbic Bank Botswana’s Chief Executive, Mr. Samuel Minta said, “We are excited to partner with Statistics Botswana on this new and exciting initiative. As a Bank, we firmly believe in the formation of Private Public Partnerships as a means to drive Botswana’s socio-economic growth. This is how we are able to create sustainable solutions that have a real impact in our communities, turning dreams into reality and creating legacies. The Bank has the strategic platform to provide support and thought leadership expertise to contribute towards increased usage of statistics for planning and decision making. Furthermore, through the AcceleR8, we are able to foster an environment which provides solutions in terms of employability and entrepreneurship”.
For his part, the Statistician General, Dr Burton Mguni said that as part of its mandate to strengthen the engagement of the private sector in the leveraging of information technology platforms to be used to inform strategic decisions, Statistics Botswana is proud to partner with Stanbic Bank Botswana. He highlighted that with a key focus on data exchange platforms to facilitate sharing of data for purposes of generating official statistics, the partnership will go a long way in bringing this mandate to fruition.
As such, we intend to cooperate by:
Promoting knowledge and information dissemination by unpacking the; Quarterly Multi-Topic Survey (QMTS) & International Merchandise Trade Statistics (IMTS) and other related statistical information;
Strengthening the capacity of end users of statistics
Promoting and influencing employment creation through the use of statistical data such as international merchandise trade statistics; and
Hold at minimum quarterly or as may be opportune, thought leadership sessions through which to inform and disseminate useful information that can be used for opportunity creation including; venture creation, public policy guidance and ultimately, employment creation.He further said, “As Statistics Botswana, we recognise the important role which Stanbic Bank Botswana plays as a private financial institution duly incorporated under the laws of Botswana and committed to serving the interests of organisations and individuals. Recalling that Statistics Botswana undertakes periodic Business Surveys, private sector partnerships are highly attractive. Business surveys produce statistics which are critical for national policy formulation, planning and decision making across all sectors of the economy, there is heightened need for strategic collaborations with the business community to significantly improve the quality of the data produced through these surveys. Just to mention but a few, Statistics Botswana conducts monthly and quarterly business surveys to produce Statistics on Formal Employment, National Accounts (Gross Domestic Product), Prices (Consumer Price Index) Industrial production and ICT usage.”
Statistics Botswana is a body corporate established by and under the Statistics Act of 2009. It is the pre-eminent National agency responsible for the development and management of official statistics; and the official source and custodian of official statistics and, the primary agency of the National Statistical System (NSS).
“We are confident that this partnership will continue to grow from strength to strength as we partner to drive Botswana’s growth. I cannot overemphasise how excited we are for this new partnership. As a bank we are truly dedicated to improving lives and this is yet another step in the right direction,” concluded Minta.