For decades the government of Botswana together with the private sector has been talking economic diversification. Numerous policies and strategies have been established towards this goal. The 2009 economic crises illuminated the fiscal issues, declining revenues which are a medium term phenomenon. Government revenues and Botswana’s GDP has been dominated by mining particularly diamonds, however, mineral revenues contribution to GDP has over the years declined from highs of 40% to the current 27%.
In the pursuit of economic diversification, government has introduced some programs at various times such as Financial assistance policy (FAP), ALDEP, youth grants, manufacturing incentives, etc. Still with this massive investment towards this goal we haven’t been able to witness progress and the real benefits of economic diversification. Sound economic diversification shouldn’t only have high level macroeconomic results but should be felt on the ground by the layman through growth in economic opportunities particularly growth in employment opportunities, growing middle class and lowering disparities between the poor and the rich.
Some of the issues that keep coming up when discussing economic diversification are growth in the local private sector and Batswana participation. Citizen Economic Empowerment (CEE) is widely accepted as an essential component of economic development and diversification and lately the CEE policy has been said to be tightly intertwined to the Economic Diversification Drive (EDD). We are yet again pushing for introduction of new policies and strategies without necessarily having properly evaluated the previously failed, the unimplemented and the ‘still in progress’ policies. What is it that CEE is going to introduce that FDP or ALDEP or LIMID didn’t do? Most of the programs before have always been citizen empowerment focused, for companies to benefit from CEDA loans for example need a Motswana majority shareholder. Question of-course is, since we have always supported Batswana owned enterprises and we haven’t seen any fantastic results aren’t we wasting our efforts on the wrong course? Should we perhaps follow EDD which talks to local enterprises which basically means for as long as an enterprise is based in Botswana it’s eligible for incentives such as access to finance? Is moving forward with CEE further fuelling the sense of entitlement that most of us feel is the down fall of Batswana? During one of my interviews on DumaFm, I was asked what I think of EDD and as honestly as possible, risk isn’t on how it looks on paper but largely on how it’s going to be implemented. I’m quite wary on promoting sub-standard quality goods, uncompetitive pricey goods through the government market. In the short term EDD is supposed to serve as infant industry protection which will in the long term produce internationally competitive enterprises.
We need to start looking at “empowerment through excellence”; pursued in a way that is consistent with participation in a global economy that requires openness to trade, capital flows and migration. We live in a global village and we need to start acting and working the part. How relevant are our policies and strategies in this competitive world, for sound economic growth and diversification we need to start thinking outside the box and looking outside the border; have an export led economy and attractive enough for FDI.