Inside govt’s plan to create 100 millionaires in 10 years
Mbongeni Mguni | Monday September 6, 2021 06:05
Mmegi has established that the strategy has been in the works since at least 2017, developed as a government resolution to enhance citizen participation and empowerment in the economy as well as the growth of the middle class. Information dug up by Mmegi indicates that the strategy has been circulating among various stakeholders for the past few years, helped by lead consultants, I-Six Logistics Consultancy.
Unveiling the Strategy earlier this week, Investment, Trade and Industry minister, Mmusi Kgafela said he had recently presented Cabinet with a ‘thick document’ prepared by experts on lifting young Batswana into the ranks of the rich, through several initiatives aimed at greater economic participation.
“The strategy is to grow the middle class to be able to better participate in the country’s economy,” Kgafela said in a televised address this week.
“Our goal is that in 10 years, we should have created 100 millionaires, young Batswana, with those assets.” The ambitious strategy will involve several initiatives including a National Franchising Programme in which government will support Batswana to partner with international franchises on home soil and also develop local franchises. The strategy also envisages the establishment of HE’s Top Entrepreneurs Development Fund that will target fresh graduates’ startups and expansions as well as a Fresh Graduates Entrepreneurship Challenge Programme. “We expect results from these initiatives for our citizen entrepreneurs,” Kgafela said. The minister said the strategy would also include development and financing of renewable energy projects which involve participation in projects such as Independent Power Producers, manufacturing and installation of solar energy products such as panels, lights and heaters. Analysts said while ambitious, the middle-class strategy is the government’s first broad attempt at deliberate policies to expand the middle class, by focusing on youths and graduates.
“As with many other government initiatives, it is a well-meaning strategy but the challenge will come in linking the actual implementation to the targets,” an economist who took part in the strategy’s stakeholder consultations told Mmegi.“There are obviously existing challenges that will hamper the strategy such as young people’s access to land and similar resources, bureaucracy within entities tasked with facilitating these and the rising threat of corruption whenever such initiatives are undertaken.
“It is however refreshing that targets have been set which the President, his Cabinet and the different organisations can be held to account by.” The Middle Income Strategy piggybacks on the Citizen Economic Inclusion Act passed by Parliament, which seeks to open up the economy for Batswana, particularly by breaking down structural monopolies. Kgafela said the new act would complement the strategy. “There are some areas of the economy that Batswana cannot get into and this law is going to attend to that,” he said.
“Those who have been operating in such areas will be required to open up their value chains and also partner with Batswana.
“We want to break up this vertical or horizontal integration where someone wants to do everything and while the laws have been there for this, not enough was being done.”
While research on citizen millionaires is sparse, a number of wealthy entrepreneurs in the country have been borne out of government tendering, as revealed recently in a Mmegi report on the rise of COVID-19 ‘tenderpreneurs’. A report in May by New World Wealth estimated that despite the chaos of COVID-19 on incomes, 200 more people in Botswana had become dollar millionaires during 2020.
The report, conducted by assessing stock market holdings, property, income, historical in-house databases and accounting for currency, market and property price movements, estimated that the country in 2020 had 2,000 dollar millionaires, with 80 of them ranked as dollar multimillionaires. Dollar multimillionaires are individuals with net assets exceeding $10 million.
Continental wealth publication, Billionaires Africa shared a list of what they consider to be the top 20 richest investors on the Botswana Stock Exchange with Mmegi last week, featuring several prominent businesspeople.
The list is topped by Choppies’ boss, Ramachandran Ottapathu with estimated equity holdings of $40.9 million, followed by his business partner and ally, Farouk Ismail with $39.5 million. Other local investors with significant stock market wealth include Chobe Holdings’ CEO, Jonathan Gibson ($22.7 million), Turnstar Holdings founder, Gulaam Abdoola (US$14.6 million) and Sefalana Holdings CEO, Chandra Chauhan ($11.9 million).
Meanwhile, the Finance and Economic Development ministry this week tabled the long-awaited National Employment Policy, a ‘less ambitious’ document compared to the middle-class strategy but with equally challenging targets to further empower Batswana in terms of securing gainful employment.
Presenting a draft of the paper on Wednesday, finance minister, Peggy Serame said the policy’s target is to reduce the unemployment rate to a single digit by 2030, from the current estimate of 24.5%.
“This refers to employment that can take Batswana out of poverty, secure and respect fundamental rights of the human being and the worker,” she said.
“Experience shows that the impact of unemployment can be long lasting and have far-reaching implications on the economy and livelihoods, both in the present and future, undermining social stability, consumer confidence and therefore future sustainable economic growth.” The National Employment Policy has five focal areas, which include strengthening the growth of employment in the private sector, reforming the education and training system, improving the flow of information between job seekers and job openings, strengthening of employment programmes and developing a framework for coherent and coordinated policies with systematic monitoring and evaluation.
Serame told Parliament a short term action plan to operationalise the National Employment Policy had been developed and would be implemented within the first six months following approval of the policy.
The targets in the middle-class strategy and the National Employment Policy are seen as government’s response to criticism that initiatives and programmes have not had solid goals attached to them, which together with weak monitoring and evaluation, have led to low success rates.