EDD channels over P5bn to local businesses
Onalenna Kelebeile | Friday April 25, 2014 12:23
Speaking during the SPEDU regional economic development strategy stakeholder workshop in Selebi-Phikwe recently, Monare said the EDD emphasises much on creating a conducive environment for the private sector to play a major role in driving economic development as well as review of legislative and administrative structures that are still an impediment to private sector participation in the economy.
She noted positive growth in some non-mining sectors with construction, social and personal services as well as financial and business services sectors having recorded high real growth rates of 14 percent, 12.2 percent and 11.0 percent respectively in 2012. “This reflects some success in the country’s economic diversification efforts,” she added.
Monare said the EDD strategy is to invest more on sectors that have the potential to create local industries and employment opportunities and investment in appropriate skills for domestic job market.
“The short term approach is the use of government purchasing power to promote production and consumption of local goods and services through preference schemes. All government ministries, independent departments, local authorities and parastatals purchase from local manufacturers and services providers. Local manufacturers are issued with EDD certificates that give them preferential advantage on government tenders,” she added.
In the medium and long-term approach, EDD intends to develop sectors that can continue to grow long after minerals have run out.
Monare said the first stage would be development of a priority list of the EDD sectors and sub sectors that have been approved by the National Economic Diversification Council. The second stage would be the facilitation of formulation of sector development strategies and that will be followed by the facilitation of implementation of sector strategies.
The EDD coordinator further noted that Botswana is one of the most successful countries in the developing world by many measures as she graduated from being one of the poorest nations to a middle-income country after the discovery and exploration of minerals.
“Botswana also invested in infrastructure, education, health and maintained prudent economic management over the years. The country also managed to relocate the Diamond Trading Centre from London to Gaborone to diversify the mining industry and boost other sectors of the economy,” she added.
Monare further said the country has considerable assets upon which to build a new basis of growth such as abundant mineral resources like diamonds, coal and copper/nickel. She said another asset is that Botswana has participatory governance that anchors its politics in a framework of political stability and is ranked 12/200 less risky countries in terms of political risk, civil unrest and acts or terrorism.
She, however, noted that the country is heavily dependent on the mining sector and that the global uncertainties affect the mining sector resulting in reduced government revenues. Other challenges according to Monare include weak local private sector, low export base, undeveloped culture of entrepreneurship and High Import Bill as well as mismatch between skills provided in the schooling system and the needs of companies. She said all these necessitated the establishment of the EDD.