Can the citrus project catalyse Phikwe’s economic revival?
Chakalisa Dube | Monday April 1, 2024 10:28
BCL went into liquidation on October 9, 2016, a development that threw over 5,000 people on the streets and brought the town’s economy to its knees. Eight years later, the town seems to be on a path towards economic recovery and prosperity. Anchoring this economic revival is the newly launched Selebi Phikwe Citrus (SPC) project.
SPC marked its official harvest last week and has a projected yield of approximately 9,000 tonnes of citrus fruits this year, including lemons, grapes, and oranges. Production is expected to grow annually as the trees gain maturity.
The trees at SPC are expected to reach full production capacity by the age of 16, thereby augmenting the supply capacity for both domestic and international markets every year.
This year, 25% of the farm's produce will be directed to the local market, aiming to significantly reduce Botswana's citrus import expenses. In addition, the 1,500-hectare farm leased from the Mmadinare Multipurpose Cooperative Society Limited boasts over 800,000 trees various citrus trees and a state-of-the-art packhouse.
The project solidifies the government’s commitment to revitalise the Selebi-Phikwe Economic Diversification Unit (SPEDU) region and secure the future of Selebi-Phikwe, post the lifespan of mining activities. To a certain degree, it also promises to reshape the town’s fortunes and propel it into a new era of economic vitality.
The venture is expected to directly create over 1,000 employment opportunities for the locals once it has reached full production in the next five years. There have been arguments that the quality of jobs offered directly and indirectly by SPC leaves a lot to be desired. But the reality is that the influx of jobs does not only stimulate economic activity but also enhances the overall prosperity of the town by providing consistent employment and income opportunities.
In addition, beyond immediate employment opportunities, the citrus project heralds a new era of economic diversification for the city. In short, as acknowledged by President Mokgweetsi Masisi recently, it offers an opportunity for investors to tap into various opportunities linked to the citrus industry, thereby enhancing the town’s economy and by extension improving its economic resilience. This diversification ensures a more stable and sustainable economic future not only for the town but the country in general.
There is no doubt that the establishment of the citrus project also creates a ripple effect of business opportunities throughout the town's economy. From suppliers of agricultural inputs to logistics and transportation services, a myriad of ancillary businesses will ultimately emerge to support the project's operations.
“The establishment of this citrus business, as a flagship agricultural project, has created a stimulus in the SPEDU region and Botswana at large. “I am reliably informed that over the past three years, the project has procured goods and services worth over P125 million from local suppliers. “The goods procured from both small and large enterprises include land rentals, irrigation equipment, water, electricity, agrochemicals, staff accommodation, parts and spares,” Masisi said.
These assertions by Masisi drive home the fact that entrepreneurs can greatly capitalise on the ancillary opportunities availed by the SPC especially once it has reached full production, further stimulating economic growth, and fostering a vibrant business ecosystem within Selebi Phikwe.
As the citrus project takes root, it can catalyse investments in critical infrastructure to support its operations and other businesses in the town. There have been concerns from businesses in the area that the infrastructure in Phikwe is below par and might demoralise some of those who want to take advantage of SPC spinoffs and other business opportunities.
"Transporting our produce to Phikwe poses a significant challenge due to the poor road conditions. “We now have an opportunity to pick our oranges and pack them at Selebi-Phikwe Packhouse owned by Selebi-Phikwe Citrus, but to transport them will be an enormous challenge," Mario van Rooyen of Kwadiwa Citrus bemoaned, highlighting the risk of deterioration during transit.
Kwadiwa is a citrus farm located in the Tuli Block area. Van Rooyen emphasised the need for government intervention to address the infrastructural shortcomings to facilitate seamless operations among farmers, as well as, other businesses in the SPEDU region.
Last week Masisi acknowledged that prioritising improved roads, utilities, and amenities would be very key in terms of attracting investors to Selebi Phikwe with a view of capitalising on spin-off opportunities brought by SPC amongst others.
Should the government commit to infrastructure development, this could lay the foundation for the long-term growth and prosperity of Selebi-Phikwe. This could also enhance the town’s overall attractiveness.
While the citrus project undeniably represents a significant step towards the economic revitalisation of Selebi-Phikwe, not everyone is enthusiastic. There have been concerns that the government’s distinctive policy frameworks and regulations earmarked for SPEDU have done little to encourage investment in the region contrary to what has been publicised by government officials including Masisi. After the closure of BCL, the government put together a portfolio of incentives aimed at making the SPEDU region more attractive to investors. These incentives include amongst others, a five percent corporate tax for the first five years followed by 10% for an indefinite period, as well as 30% guaranteed government off-take. However, some entrepreneurs say that these are an illusion.
Some entrepreneurs have voiced challenges such as stiff competition from imported alternatives and delays in the materialisation of these promised government incentives.
“We settled in Phikwe hoping to capitalise on government incentives, but we have encountered obstacles,” said Charles Seisa of DIMSOL, a local company that manufactures medical devices such as Vacuum Blood Collection Tubes. “Despite our high-quality products, we face stiff competition from imported alternatives because there is no protection from government," he said “The promised 30% government off-take has yet to materialise as well, and our cash flow suffers as a result."
Addressing these concerns and ensuring that promised incentives are effectively implemented will be crucial in maximising the economic benefits of the citrus project for Phikwe and its residents.