Engineering sector seeks protection from SA companies
Keikantse Lesemela | Friday July 11, 2014 11:54
Botswana Confederation of Commerce Industry and Manpower (BOCCIM) engineering sector chairperson, Obed Motsumi said they have observed that a lot of companies in South Africa obtain wide agency status from Original Equipment Manufactures (OEM) worldwide an then use this to block out Botswana companies and others from clinching business deals in other small countries.
“It has occurred to us that Botswana companies are operating at an unavoidable disadvantage which can be overcome through the active involvement of BOCCIM and the government,” said Motsumi.
OEM makes equipment or components that are then marketed by its client, another manufacturer or a reseller, usually under that reseller’s own name. Commenting in the BOCCIM annual report 2013, Motsumi explained that even where South African companies lose tender bids they are still able to have a stranglehold on Botswana companies through their OEM agency status. “We think this should be nullified, but individual Botswana companies have no capacity to do this. What is sad about this is where South African companies inform overseas OEMs to the effect that Botswana is part of South Africa. Any applicant from South Africa who requires direct trade links or an independent OEM status should not be entertained,” said Motsumi.
However, Motsumi said these South African companies prevent Botswana companies from arranging direct procurement deals with local companies. “We feel this practice adds avoidable costs to Botswana’s economy, while preventing Botswana companies from building trade links with the OEMs based overseas”.
The Botswana government has been fleeced in the supply of spares, repairs, calibration of specialised equipment and the building of the necessary local skills and knowledge.
South African companies also bid with Botswana companies in Botswana for works awarded by the Public Procurement and Asset Disposal Board (PPADB) and other government organisations.
“We believe that Botswana through the Ministry of Trade and Industry with support from BOCCIM advocates for its companies to directly deal with OEMs unless such OEMs already have appointed agents in Botswana,” said Motsumi. Furthermore Motsumi raised concern that even though local companies have capability, much of the work is given to foreign countries. “The idea is not that foreign companies should not be given work but rather they should become the first point of call in areas where they have competencies.”
He urged BOCCIM to come up with a solution to benefit its members and to assure a long term that is not fully dependent on imported skills. He also recommended that government should be asked to set up a mechanism which will be open to local companies to register works that they feel are given to foreign companies with the ultimate effect of compromising the effort to empower local employment and business expansion.
“The Ministry of Trade and Industry must intervene at a government to government level regarding the OEM phenomenon.”