Beware of Big Brother�s flue
Mmegi Editor | Thursday March 9, 2017 11:32
South Africa’s dominance, at once a blessing and a curse, has stunted local manufacturing with cheaper imports, while simultaneously shoring up local annual budgets through SACU revenues. To some extent, Botswana has benefited by having access to the world-class aviation and financial services located in South Africa, which tourists and investors have leveraged to access our smaller economy.
On the ground, however, Botswana has literally exported hundreds of thousands of jobs to South Africa via an import bill heavily in favour of the regional powerhouse, while the dominance of that country’s firms in local financial services, retail and similar sectors has exposed the local economy to the vicissitudes of the South Africa economy.
The resilience of the local economy has thus, become dependent on the performance of South Africa, with macro-economic factors such as inflation, exchange rate policy and even growth reliant on triggers outside our borders.
The situation is not unique to Botswana, but certainly needs continuing efforts to address, particularly as developments in South Africa point to a darkening socio-political crisis with inevitable impact on its economy.
President Jacob Zuma’s administration and the various institutions and agencies involved in South Africa’s Government are embroiled in deepening crises, a large number of Constitutional Court challenges and political battles that are gnawing at the country’s stability.
Economists from South Africa have warned that countries in the region, including Botswana, will be exposed to the fall-out from the troubles in South Africa, including sharp movements in the Rand and constrained growth.
Last year, the South African Rand was the most volatile, playing havoc with the local currency and its sensitive peggings which are, in essence, designed to protect against imported inflation, while promoting local exports, particularly diamonds.
It should be acknowledged that there have been measures by various authorities to promote greater independence for the local economy and to boost its resilience to issues in South Africa.
For one, the balancing of the currency basket that determines the Pula’s value have been moved around to reduce exposure to the Rand’s madness, while various programmes have attempted to boost local manufacturing and agriculture to limit a reliance on South Africa.
These are not the type of changes that happen overnight, but may in fact take decades to achieve.
In the interim, we note the Ministry of Investment, Trade and Industry’s efforts towards greater citizen empowerment in the retail sector, as well as the continuing Economic Diversification Drive.
We also applaud the Botswana Chamber of Mines, which has a similar programme through which to direct its vast purchasing power inwards towards the building of local manufacturing capacity.
Such efforts, with political support, will ensure we do not catch Big Brother’s frequent flues.
Today’s thought
“Remember, my son, if you ever need a helping hand, you’ll find one at the end of your arm”
- Sam Levenson