The long walk to economic freedom
Mbongeni Mguni | Friday June 19, 2020 14:34
The development of a major mall was paralysed for sometime in 2016, as Seretse demanded that provisions be made for citizens not only in the allocation of spaces in retail developments but also in supply contracts for the shops that operate in them.
The country’s retail space, from food to clothing, is dominated by foreign corporates who prior to changes made in recent years, had virtually no guidelines on local procurement.
Despite the reservation of certain licences such as butcheries and bakeries for citizens, waivers were routinely granted allowing foreign chain supermarkets to open their own in-store at the expense of citizen enterprise.
“Investors in the retail space behaved as though we didn’t know what was happening,” Seretse says.
“They were threatening that they would go and I said ‘with pleasure if that is an option’.
“I gave them the example of Kenya and told them that if Batswana are not supported in these malls and say they want to burn them, they will do so. It happened in Kenya when they burned South African malls.
“The developers here were also not on my side because they wanted their rentals, but I was talking about a bigger cause.”
Government’s clash with retailers and property developers was just one battle in a long-running war for greater citizen economic empowerment.
President Mokgweetsi Masisi has pledged to introduce the long-awaited Citizen Economic Empowerment (CEE) bill in the upcoming winter sitting of Parliament. Should that take place, his administration will make history by being the first to actually bring papers to the National Assembly on an issue that all administrations since Independence have pledged.
CEE has become a major national debate, fuelled by the coronavirus (COVID-19) pandemic, which has exposed stark economic inequalities and the gap between those who have and those who watch from the sidelines.
Over the years, the issue of CEE has usually arisen during election seasons and the fact that the promised legislation could appear in Parliament in a non-election year has given hope that the history-making statutes will actually come before legislators. Seretse is reluctant to talk about how previous administrations have handled the CEE debate. As a member of Cabinet for eight years, Seretse had knowledge of the debates in the highest offices around CEE and the pressure Batswana have been mounting for a law that gives them a greater slice of the economic cake.
“I would avoid talking about administrations because when you talk about administrations, some of us have been schooled in the protocol of collective responsibility and the discretion of not saying the things that might have ensued in a particular sphere.
“I can say that this issue has come to the floor of Parliament. I recall Honourable Odirile Motlhale had a motion talking about coming up with a CEE law but somehow it did not see the light of day.”
Seretse, however, does indicate that his stance in the retailer clash received support from the highest levels. “Some reported me to the Number 1 and Number 2 (of the country) at the time. Both Number 1 and Number 2 told me to stand firm.
“I had the support of the boss and the Number 2.” Former MPs such as Maitshwarelo Dabutha and corporate leaders such as Louis Nchindo, David Magang and Joshua Galeforolwe have previously ignited debate over a CEE Act in previous years, as have many others.
“CEE has long been talked about and government has, in its own way, tried to respond to these matters such as through supporting Batswana,” Seretse says.
“There are a lot of programmes such as subsidies and licence discretions and others, which government has tried in terms of empowerment but it has not been enough for Batswana. “Many have said we need an actual CEE Act for these efforts to be effective.” National debate is stirring around what the Bill due to be presented in Parliament will look like. After decades of pressure and pleas, Batswana hold high expectations for a cure-all piece of legislation that will restructure the economy and post-COVID-19 introduce a new economic dispensation.
For Seretse, not only should the upcoming legislation cut across other laws, it must also be grounded in inclusive public consultation and usher in a commission charged with overseeing CEE.
The former minister believes such a commission should also carry out the funding of CEE, a critical element of the effort to bring citizens on board the economy. Such a commission would make sure that CEE is not abused and would root out fronting. Zambia has a Citizens Economic Empowerment Commission and a Citizens Economic Empowerment Fund, which are based on an Act passed there 14 years ago. “One of the things that has made it very difficult for Batswana to participate in the economy has been lack of access to funding.
“You may argue that there is CEDA and its low interest rates, but that is not enough for proper support for CEE. “Other countries create institutions which take direct responsibility to see that citizens are participating in their economies.
“There should be a CEE fund that will support Batswana in different ventures in the economy and this one is non-negotiable because you cannot talk about empowerment without a fund to support that.”
The development of the CEE legislation has sparked some concerns about its impact on the country’s well-curated investment climate and reputation. In certain circles, it is feared the upcoming law will reduce the country’s lustre as an investment destination by introducing greater reservations, more discrimination in favour of Batswana and shifting the economy and its opportunities towards citizens.
Some of the fears are grounded from the experience of Botswana’s neighbours such as Zimbabwe and South Africa in enacting similar legislation. An aggressive CEE law in Zimbabwe some years ago, saw the government almost overnight forcing all companies to cede 51% control to citizens.
Locally, the public debate around CEE has frequently carried racial undertones with Batswana identifying foreigners of certain descent as the holders of the economy from whom empowerment is needed.
Seretse says critics of CEE will grasp at straws to discredit the initiative.
“Batswana are not racists. We are not and have never been but those who may not want to support this and continue as usual, may raise issues like that.
“The truth is that it has been 50 years since Independence, but can anyone honestly say the economy is in the hands of Batswana? “Look at the COVID-19 Relief Fund contributions. I have watched in dismay and appreciation; appreciating the humanity of people contributing and also dismay at the profile of who is contributing.
“Batswana have pitched in to help their fellow citizens but when you look at the amounts, you will see that they are not empowered enough to help.
“They are putting in P2 to P10 even though they wish to help their fellow citizens.
“They have not been empowered.”
The former minister says CEE must not be apologetic and must spread across the various economic sectors. Discrimination in licensing must take place across, so that even in mining and tourism, citizens are put first.
“CEE will not be done in isolation and it will be in the context of the World Trade Organisation and covenants such as the Most Favoured Nation,” he says.
“The law must not be offensive of these agreements. “Within the country, because of the sensitivity of direct discrimination to support local people, we would want those from outside who have been here and have the opportunity to help support government policy and not feel that they are unwanted.”
The former minister says CEE must underpin the new economy in a post-COVID-19 world. “We cannot wait until after COVID to say let’s deal with CEE. There’s one report that says the coronavirus will cause never seen before falls in Foreign Direct Investment (FDI).
“Here, we have been crying about FDI and now global flows could drop by up to 40%, meaning that even our small FDI will be cut. “Greenfield investments will also drop by about 50% globally.
“The challenges are many and the multilaterals are divesting and relocating.
“That provides a burning platform for this country, for us to rise as citizens and those will be our wings to fly.”