IMD gauges Botswanas Competitiveness in latest report
The Institute for Management Development (IMD) has released the IMD World Competitiveness Yearbook for 2022. Botswanas debut on the list was in 2021 ranking number 61. This year, Botswana is ranked 58th of 63 middle and high income nations, a five spot rise up the ladder.
According to a press release by the Ministry of Labour and Home Affairs There has also been an improvement in Botswanas overall competitiveness index with the score increasing from 38.8, out of 100, in 2021 to 45.26, out of 100, in the 2022 Report.
Improvements have also been achieved in the rankings of all the four factors assessed. Botswanas Economic Performance factor rank improved to 60th from 62nd in 2021, Government Efficiency factor rank improved to 41st from 42nd in 2021, the Business Efficiency factor rank improved to 57th from 61st in 2021, and the infrastructure factor rank improved to 61st from 63rd in 2021. The scores attained in these factors present a mixed picture.
The assessment is conducted by examining four factors considered critical in promoting a nations overall competitiveness. These factors are: economic performance, government efficiency, business efficiency and infrastructure. The economic performance factor assesses the effectiveness of a countrys macro-economic environment in promoting competitiveness.
The countrys key strengths under this factor are prices, tourism receipts and gross capital formation, amongst other things. According to the Botswana Financial Statistics, the inflation rate last year of 6.7%, was the highest recorded since 2012. Irrespective, the 2022 IMD World Competitiveness Yearbook, using this statistic, ranks Botswanas cost of living index as 1st out of the included 63 countries.
Key weaknesses in this factor include the countrys export concentration by product, exports of commercial services and inward direct investment stocks all ranking 63rd. On government efficiency, the main strengths for the factor include employer and employee social security tax rate which both rank 1st, level of government subsidies which ranks 2nd and total general government debt as a percentage of GDP which ranks 3rd.
weaknesses include the attainment of the Sustainable Development Goals with a ranking of 59th. This leaves a lot to be desired considering this factor assesses the extent to which governmental policies, regulations and legislations are conducive to overall competitiveness.
Despite the significant improvement in ranking the Ministry prides itself with, the business efficiency factor that measures how much the national environment supports the private sector to be creative, lucrative, and responsible shows a downward spiral in the following components: worker motivation 63rd, use of digital tools 62nd, ability to cease opportunities and deal with threats 61st, company agility 60th and company flexibility and adaptation 59th. Some have even taken to social media expressing their disappointment in the celebration of the findings stating we are used to failing that we have stated praising failure.
The infrastructure factor takes the cake for being Botswanas worst performing factor especially on structures geared towards the forth industrial revolution. Internet bandwidth speed is ranked 63rd, number of mobile broadband users 62nd, medium- and high-tech value added 62nd, and the proportion of high-tech exports 62nd.
Elsewhere in the ranking, Denmark is ranked 1st, Switzerland came in 2nd (it was 1st in 2021), Singapore was 3rd (up from 5th) and Sweden fell two places to 4th. Croatia was this years greatest improver, leaping 18 places in economic performance. The WCC said its strong economic rebound from the most acute phase of the COVID-19 pandemic played a key part, as did the recovery of its tourism sector.
The IMD World Competitiveness Yearbook (WCY), first published in 1989, is a comprehensive annual report and worldwide reference point on the competitiveness of countries. It provides benchmarking and trends, as well as statistics and survey data based on extensive research.
It analyses and ranks countries according to how they manage their competencies to achieve long-term value creation. An economys competitiveness cannot be reduced only to GDP and productivity because enterprises also have to cope with political, social and cultural dimensions. Governments therefore need to provide an environment characterized by efficient infrastructures, institutions and policies that encourage sustainable value creation by the enterprises.
The IMD World Competitiveness Rankings emphasize a long-term trend highlighted in past editions that the countries on the top of the list each have a unique approach to becoming competitive.
Despite this the Ministry of Labour and Home Affairs remains optimistic highlighting; Going forward , Ministry of Labour and Home Affairs in collaboration with BNPC, will be hosting a Stakeholder Competitiveness Workshop in order deliberate further on these results, interrogate possible actions to rectify the current situation, and to map the way forward in terms of Botswanas competitiveness.
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
âIn accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,â said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices.Â Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
âCommunity empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,â said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Â Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
âAs a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economyâs productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,â said the Minister of Minerals and Energy.
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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Moodyâs Reaffirms African Trade Insuranceâs A3 Rating & Revises Outlook to Positive
Moodyâs Investors Service (âMoodyâsâ) has affirmed the A3 insurance financial strength rating (IFSR) of the African Trade Insurance Agency (ATI) for the fifth consecutive year and changed the outlook from stable to positive.
Moodyâs noted that the change in outlook to positive reflects the strong growth in ATIâs membership base – that has resulted in improved portfolio diversification, strengthened capital adequacy, and the good profitability despite the challenging operating environment. In addition, ATI benefits from its preferred creditor status (PCS) amongst sovereign member states which protects it from the risk of default by member sovereigns through securing recoveries against claims paid on guarantees.
The strong membership and equity growth are some of the key considerations for the consistent reinstatement of ATIâs A/Stable rating by Standard & Poorâs and Moodyâs rating, over the years. Also supporting the rating affirmation are; consistent improvement in financial performance, commitment of its shareholders who continue to uphold the preferred creditor status, its high quality and conservative investment portfolio as well as strong relationships with a number of global reinsurers that provide significant risk-bearing capacity.
With the change in outlook to âpositiveâ, ATI is now better placed to provide enhanced support to its member countries, attract additional shareholding and grow its portfolio. The positive outlook is an indication that if ATI continues to demonstrate its strong underwriting performance and ability to recover claims under the preferred creditor arrangements, among other factors, an upward pressure towards an upgrade may be generated. The Moody’s press release can be accessed fromÂ here
Commenting on the rating, Africa Trade Insurance Chief Executive Officer Manuel Moses said: âThis positive revision is in line with our 2023 – 2027 strategic objectives in which we set to improve our rating outlook to positive in the first year, and achieve an upgrade of at least âAAâ/Stable rating by both Moodyâs and S&P within this Strategic Plan period. We aim to achieve this by doubling our exposures and increasing our capital to more than USD1 billion.â
ATIâs mandate is to provide trade-credit and political risk insurance, as well as other risk mitigation products to its member countries and relatedÂ public and private sector actors. These insurance products not only directly encourage and facilitate foreign direct investment as well as local private sector investment in our member countries, but also contribute to intra- and extra-African trade.
About The African Trade Insurance AgencyÂ
ATI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. Since inception, ATI has supported US$78 billion worth of investments and trade into Africa. For over a decade, ATI has maintained an âA/Stableâ rating for Financial Strength and Counterparty Credit by Standard & Poorâs, and in 2019, ATI obtained an A3/Stable rating from Moodyâs, which has now been revised to A3/Positive.