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.
