Let us rethink economic diversification
Kgosietsile Ngakaagae | Friday May 24, 2019 15:00
In fact, if one is to cast a wide view at it, the problem is really, continental. Whilst it is possible to blame the economic conditions of other African nations on political instability, the same cannot be said of us. We have had everything going for us. Our first President, and his contemporaries, deserve special commendation for ensuring that “the wells of democracy”, necessary for political stability are “dug deep”. The setbacks we have suffered in our quest for economic emancipation have by no means been peculiar. As such, we can furnish very few excuses for our condition.
I do not want to cut a pessimistic, let alone a political tone. By far, we have achieved plenty in terms of infrastructural development. Overall, our management of the economy and the single commodity upon which it has predominantly relied upon, has been good. There have been occasions when we have dropped the ball, but such cannot subtract from our overall achievements. Economic diversification has, however, been the one area where we have dismally failed. Hyundai was frustrated by regional economic politics after capturing about 12% of the South African car market and leaping onwards to being the country’s second, if not third, foreign exchange earner. South African protectionism is not very different from what we see happening between the United States and the East. Populism has reshaped, or at least influenced, economic approaches at the top most levels and small players will find it even harder to compete in regional and global markets where leaders consult the electorate, and not economists for economic policy direction. When regional and global economic powers depend upon labour for political capital, and consider same their default constituencies, free trade is the natural casualty.
But we cannot look at that singular example as the reason why we have failed in our efforts on economic diversification. Helplessness is not an option. Our efforts to take advantage of AGOA have spectacularly failed while eastern nations have done better without similar advantages in the same markets.
For example, we have spent a figure shy of billion Pula putting up glass manufacturing infrastructure that never produced a shrapnel of glass and the Chinese mafia have walked away with all the money.
We have spent millions putting up a packaging and can manufacturing company at public expense. We have then denied it to deserving Batswana and given it to a hostile competitor in Nampak to stifle and to destroy. It has been as much about, corruption, leadership deficiencies as it has been about skills deficiencies. That presupposes leadership inefficiency.
Perhaps the time has come when we must understand that academic education is not in, an of itself, a guarantee of competence and that we are lagging behind by many years with regards to key competencies on the basis of which developed economies are founded.
Our solution may be to go back to the basics and to prioritise areas on which we can more usefully invest our dwindling economic wealth. At present, we are trying to be jack-of-all-trades and failing dismally. We need to identify areas we can excel in and to go on an all out assault. Let us start with food security, for example. By me, this is the foremost critical sector.
Without food security, the country will always struggle. Feeding our 2.5 million people is no mean feat but same must remain a key priority.
As it is, we have been unable to make any commendable strides in that regard, always blaming drought for our failures. Yet plenty of talent abounds both in South Africa and Zimbabwe on the basis of which this sector could be cranked up.
We have not seen these countries as pools for critical skills but have simply sought to match them with academic credentials. As a result, we have a lot of PHD’s in the agricultural sector but no food to show for it.
At best, they only produce more educated scientists. To catch up, we do not only need education; we need on-the-job proven experience that can facilitate skills transfer to even, the very educated.
Tied to this problem is the fact that for all the enviable landmass we boast of, our farms are more status symbols or private resorts than hubs of economic activity.
I am not unmindful that many Batswana have done commendably well in the beef sector but much more can be done. The same cannot be said of crop production. We have been unable to ensure self sufficiency even in those years where we had abundant rains.
Countries of comparable climatic conditions have been able to do much more. Years back, we benchmarked with a desert middle eastern country to determine what we could learn from them.
The solution should have been to identify priority sectors and to get them here to show us how it is done over a period as a means, among others, of ensuring skills transfer on the ground.
The monkey-see-monkey-do approach and the PHD mentality to economic diversification will not work. We need to wake up from our slumber to that reality. A skills transfer approach, especially in the agricultural sector, will set us well on our way to employment creation and economic diversification.