LEA proves its mettle in economic development
Keikantse Lesemela | Friday July 18, 2014 11:26
LEA was established by the Small Business Act of 2004 as a statutory authority but only started operations in 2007. Its key sectors are manufacturing, tourism, agriculture and services. “From humble beginnings, LEA has evolved as a brand which is now part of the business landscape in Botswana in nurturing entrepreneurship and enterprise development,” said LEA chief executive, Tebogo Matome during the launch of the authority’s third strategy in Gaborone this week. He stated that the organisation is undergoing a paradigm shift to provide cost effective, targeted interventions that address the needs of SMMEs. “Entrepreneurship is the engine of growth for any economy and the only sustainable manner in which employment can increase and the economy can grow is by increasing the number of businesses and allowing entrepreneurship to grow,” he said.
After it was established in 2007, LEA designed a strategy that focused on agriculture, manufacturing, services and tourism. Later, it developed another strategy from 2010-2014 covering four sub-sectors; piggery, horticulture, dairy and leather that would be developed through the value chain approach.
The strategy was designed as a means of sustaining the mission of the organisation, as there was no adequate financial and human resources, which was worsened by the 2008-2009 global recession. Besides, 51 percent of clients on the LEA database are from the agricultural sector and the import bill from the four sub-sectors was huge. The authority has been determined to develop SMMEs despite the tough financial situation.
Matome explained that from time to time, organisations pause and reflect on whether their basic strategies are still relevant and consistent with current evidence, observations and experiences. “The message from our stakeholders has been clear, that in order to remain relevant to Batswana, LEA should adopt a strategy that will allow the organisation to service all sectors within the country,” he said.
The four sub-sectors still remain relevant although the country remains with the huge import bill in these areas. “LEA has learnt that it was difficult for businesses within the sub-sectors to flourish in the absence of appropriate support structures. The strategy thus gave birth to four incubators, Pilane Multi-Sector (2009), Leather Industries (2010), Francistown Industrial Business (2011) and Glen Valley Horticulture (2011).
The horticulture cluster
LEA identified horticulture as a lucrative sub-sector that can assist the country in economic diversification and import substitution. A study conducted by LEA in 2010-2011 found out that the Botswana horticulture value chain is dominated by production, which is still underdeveloped and fragmented comprising largely of micro and small scale farmers. The study found out that low production of fresh fruits and vegetables fail to meet local demand, thus compelling the country to import. Produce averaged 40 percent during the NDP 9 period suggesting an opportunity for increased local production to surplus point. To develop the sector, LEA has lobbied relevant stakeholders such as the Ministry of Agriculture to expedite completion of the cluster strategy to encourage producers to move away from the current individualism in production and marketing to enable local produce to penetrate the market.
LEA has partnered with the ministry to enhance producer’s knowledge with the need to adopt modern technologies in post-harvest like cold storage infrastructure, production under controlled environments and high yielding varieties to increase quality and quantities of produce. This has given birth to the Glen Valley horticulture incubator where clients are housed for two years for training. The incubator currently houses 14 producers that have sold 295,404kg of tomatoes. The producers are exposed to a high technology system, which includes, greenhouses and tunnels.
LEA is in the process of identifying 40 farms suitable for agricultural production. The farms should have access to water and electricity. Farmers who are allocated such land will be expected to adopt modern farming technologies and techniques.
Dairy cluster
Dairy production in Botswana continues to decline and therefore increasingly relies on imports. Currently, the milk import bill stands at 95 percent. In developing the sector, LEA set long-term goals of providing local entrepreneurs with a working model that can be replicated to increase production to match local demand. Currently LEA has six dairy farmers in its portfolio and 48 pre-start-ups. In 2013, LEA signed a Memorandum of Understanding with the foreign-owned dairy production company, MilkAfrica to assist LEA clients in the sector.
Leather cluster
The leather industry has been identified by the government as having potential to contribute to the diversification of the economy. On annual basis, about 300,000 bovine hides are produced annually both by the Botswana Meat Commission (BMC) and municipal abattoirs. LEA established the leather incubator to provide assistance to leather product manufacturers. The incubator is meant to boost the leather industry so that there is value addition in the product before export to reduce imports of leather products that could be manufactured locally. LEA has set up a leather park in Lobatse. The park is meant to accelerate the development and growth of the leather sub-sector in Botswana through provision of infrastructure required for wet-blue and finished leather production.
Piggery cluster
After research, LEA found that the Botswana pork value chain is underdeveloped such that it does not allow full value addition to products. The local pork market is heavily dependent on imports of up to 70 percent. LEA identified opportunities in the piggery sub-sector like a national abattoir, processing plant, regional slaughter facilities, transportation and grain production.