Botswana has not woken from complacency slumber
Bone Prince Lekgotle | Monday September 6, 2021 06:00
The deal was approved by Cabinet and involved Rwandan firm, Agro Processing Trust Corporation (APTC), a Moroccan company known as OCP Africa as well as the Government of Rwanda. The trio jointly set up a soil fertiliser blending firm in the country to produce, market and distribute fertilisers. Under the deal OCP Africa invested US$6.3 million (about P63 million).
Reports indicate that OCP holds a majority 57.4% stake in the company known as Rwanda Fertiliser Company, while APTC holds 30% and the Government 12.6% respectively. The deal paved way for OCP to partner with the Ministry of Agriculture of Rwanda to address key barriers to the realisation of the country’s agricultural potential, by improving the quality of fertilisers. The new company said it would update soil maps and recommend the type of fertiliser to apply based on scientific data. The project was expected to reduce the price of fertiliser, as well as improve productivity and farmers income.
Due to the deal and many others, including the Volkswagen car plant and the Visit Rwanda deal with Arsenal Football Club in the English Premier League, Rwandan President, Paul Kagame is credited for transforming his country into an FDI market. The Ministry of Agriculture and Animal Resources hailed the Rwanda Fertiliser Company (RFC) for supporting Rwandan stallholder farmers with a comprehensive package enabling them to cope with the impact of the COVID-19 pandemic. RFC was set to initiate its operations at the end of 2020, but in the face of the pandemic, it launched a crisis plan prior to officially opening to help curb COVID-19’s impact on agriculture. The emergency relief component of RFC’s plan is a donation of 500 metric tons of DAP fertilisers to provide essential supplies to smallholder farmers. The donation covered 5,000 hectares of land for season 2021. The Minister of Agriculture and Animal Resources, Dr Gerardine Mukeshimana, welcomed the move, noting that it is in line with the government’s ongoing COVID-19 response intended to build the resilience of the country’s farmers, allowing them to increase productivity and continue producing enough to feed the population.
The Minister said: “This is a significant contribution to our work to provide farmers with the essential nutrients needed to boost agricultural productivity, thus ensuring enough food supply.”
In addition to the short-term relief, RFC is implementing agricultural development programmes that will help Rwandan farmers to become more adaptive to crisis situations in the long-term. RFC is developing a
partnership with the International Fertiliser Development Centre (IFDC) to support the Rwanda Agriculture and Animal Resources Development Board (RAB) and RFC staff with regional training on blending soil-specific and crop-specific fertilisers. This will ultimately enable the farmers to better understand their soil and create fertiliser solutions that are adapted to their crops and more resilient.
The partnership also includes the development of trials for new fertiliser products, particularly for wheat, beans, and soybeans, by setting up demonstration plots for these. This will allow the Rwandan fertiliser market to grow from one which uses standard products to a customised and tailored market. In total, almost 1,000,000 USD will be invested to set up more than 450 demonstration platforms to build capacity and increase market knowledge. The aim is to introduce farmers and relevant stakeholders to best farming practices for all stages of the harvest, from seed selection to nutrient management, mechanisation, and post-harvest handling.
Finally, RFC’s action plan also targets potato production, one of Rwanda’s most important crops. RFC has partnered with Wageningen University and Mohammed VI Polytechnic University (UM6P) to explore how Rwandan farmers can improve potato yields and limit post-harvest losses through good agricultural practice.
This project will generate data that will improve the quality and volume of the farmers’ produce over time, which will, in turn, increase potato farmers’ selling prices and revenues. Overall, RFC’s actions during the pandemic contribute to the recent calls from the African Union and Food and Agriculture Organisation (FAO) on African states and partners to “safeguard input supply chains for small-scale agricultural producers” in the context of COVID-19.
Back home in Botswana, 16 months since the advent of COVID-19, it seems the country has not woken from its slumber of complacency. Then Minister of Trade, Peggy Serame during the first lockdown stood on national television and confessed that COVID-19 has taught government that it should invest heavily in order to self-sustain as country.
More than a year later, Botswana’s pursuit of self-reliance has not shifted in the least bit. A local logistics company that prides itself in transporting goods from South Africa is projected to make huge profit after tax in the range of P100 million. And this is on account of Botswana’s reliance on goods that come from South Africa and a little or non-existing manufacturing or farming produce in Botswana.
The manufacturing industry in Botswana is small yet viable and highly stable. It has the potential to play a significant role in the performance of the country’s economy. Botswana has signed many trade agreements with adjoining countries yet continues to be at a disadvantage in terms of deriving any favourable utility from these agreements because Botswana continues to import almost everything from South Africa. This in turn means that the balance of payments favours South Africa and in addition South Africa gets the largest share of the SACU payments due to its strong manufacturing industry compared to that of Botswana.
The Botswana Investment and Trade Centre (BITC) which has an annual budget of close to P100 million has only managed to attract FDI worth P6.1 billion over the past five years while domestic investments and exports accounted for P5.8 billion including the traditional dance “thing” on the streets on New York covered by the New York Times a few years ago.
Annually, South Africa accounts for up to 80% of Botswana’s imports, particularly food and fuel, a precarious situation that has always left Botswana on its knees when exposed to the risks such as strikes in SA that disrupt the flow of goods into the country. In June 2020, when South Africa shut down one of its refineries, the reality was keenly felt as Batswana desperately galloped to the petrol stations with jerrycans and alternative containers to salvage fuel in what can only be described as a deteriorating situation.
Queues for fuel stretched as long as five kilometres at some fuel stations and petrol attendants had to work twice as hard and for an extended period of time into the early hours of the morning. The situation was so severe and dire that fuel delivered the previous day by a tanker carrying 35,000 litres would be exhausted the following day. At the height of a worsening situation, the only solution was rationing fuel with a cap expenditure of P200.00 save for essential service vehicles.
According to local economist, Dr Keith Jeffries, exports are much less diversified than GDP and government cannot lead growth in the long term without a diversified source of export revenue.
Over the years Botswana has performed terribly on AGOA, a trade programme that gives preferential trade quotas for the country to export to the US market. Botswana’s efforts are crippled by high cost of transportation and logistics, lack of skilled manpower and inability to import required manpower due to the difficulties faced in obtaining work permits and lack of any incentives or funding for upgrading of equipment and replacement to meet quality standards set by overseas buyers and companies. Now pause and wonder, just looking at the status quo, when will Botswana become an FDI magnet like Rwanda and develop a strong manufacturing and farming sector?
When will Botswana stop relying on SA? We are at 80% reliance or possibly more as there is not a day that passes without trucks lining up at our borders to deliver goods from South Africa. When will Botswana diversify its economy? The song has been sung since before Rre Mogae’s time in power. When will Botswana develop a competitive export-led economy? Another song that has been sung for the longest time. What exactly are they doing at BITC in terms of aligning strategy to national macro-economic goals? When shall we see the fruits of the labour? Are we waiting for diamonds to run out? At this pace, Batswana might have to migrate to other countries when the inevitable comes to pass.
*Bone Prince Lekgotle is a lead consultant at Infinite Capabilities whose expertise includes business development, accounting and taxation