BDP is taking Batswana for granted

* Moeti Mohwasa | Wednesday March 31, 2010 00:00

Government efforts to diversify the economy and move away from reliance on mining as a major source of income and hence increase government revenue have never borne any fruits because of the approach of the BDP government. Its belief that foreign investors are central in achieving economic diversification is very unfortunate.

 This together with failure by the BDP government to make investments in certain areas at the right time will continue to haunt us as long as it is in power.

At the BNF we summarise years of global political growth and policy development with the slogan 'Kopano ke Maata'. By this we mean there is power in collective effort or unity. Economic diversification of any country requires people whose patriotism credentials are beyond doubt. Citizens naturally have the best interests of the country at heart and therefore it is crucial that they play a leading role in economic transformation. The BNF believes that economic diversification has to be citizen driven. A precondition for this is the requirement for a government that has the zeal and determination to aggressively push forward the agenda of citizen economic empowerment and citizen participation on mainstream economic activities. For almost half a century that the BDP has been in power, the government citizen economic empowerment and citizen participation initiativess have been found wanting. The BDP government therefore does not represent what we stand for or what we aspire for as a nation. It is for this reason that though we are one of the largest producers of diamonds in the world, there is still no citizen owned company involved in the jewellery sector or related activities. This also explains why though the country spends billions of Pulas each year on construction projects there is still no citizen owned Construction Company which is a big player in that industry. It is important to note that the circulation of money in the country is a major stimulant of the economy and a source of revenue for government. If citizen owned companies benefit from the bulk of government spending there is a guarantee that this money will be reinvested in the country as opposed to a foreign owned company that will repatriate its profits.  

We, therefore, miss out on the multiplier effect of such government spending. The result of these failed policies is budgetary constraints for the government.   This eventually affects ordinary citizens because they become victims of increased VAT, introduction of school fees, salary freezes, excessive fees to access essential services in the form of what is called cost recovery, reduced number of students sponsored at tertiary institutions, shortage of medicines in government hospitals and clinics, shortage of study materials in government schools and deferment of development projects etc.

Budgetary constraints challenges in Botswana are escalated by such things as wasteful and unaccounted for expenditure (e.g. Serowe Sports Complex fiasco) and populist and personalised government initiatives whose goals and targets are not clear and only serve to confuse and duplicate mandate of existing structures (e.g. Constituency football league). It is the man on the street who suffers the most due to budget constraints.

The opportunity cost of the BDP government's snail pace in facilitating citizen economic empowerment is increased VAT for example.  Consequently and as it is now, the gap between revenue and expenditure widens and citizens are affected the most as they end up financing the budget shortfall.  This situation will get worse overtime especially when the income from minerals decline. On April 1, this year government will increase VAT rate from 10% to 12 %. Also on April 1, there will be an increase in electricity tariffs. We are now being made to pay for delayed projects and poor judgement on the part of the BDP government. This increase is brought about by the need to finance power generation projects which could have been undertaken years ago. Costs of utilities affect the feasibility of a number of projects and therefore economic growth. This is so in a country that has left the economy in the hands of  the private sector which is profit driven.  As a landlocked country with huge coal resoures we should have strived to have our electricity tariffs among the lowest if not the lowest in the region. We should also by now be a leading exporter of electricity in the region.

This would have made the setting up of industries in the country attractive.  But this will never be under a BDP government. We have failed to take advantage in areas where we are endowed with resources. The electricity utility company, BPC with the blessing of government sold an 80mw power station in Selebi-Phikwe as scrap and all we got was  a lousy US$ 250.

At the time we advised as the BNF that it was not wise to do so citing among other reasons security considerations and the need to  create employment for our people by generating power locally. Attention was now shifted to importing power when we have huge coal resources in the country. The deficit in our power requirements are met by our neighbours, in particular, South Africa as we import about 60% of our needs from that country. We are therefore bound by pricing policies of other countries.  This has lead to imported inflation. Had the government been swift in the development of local power supply we wouldn't have saddled excessive electricity bills. This crisis we are facing is BDP made. It could have been avoided. This means that the costs of production are going to go up and hence inflation.

The government has since April 2008 initiated an attack on the entertainment industry. This started with President Ian Khama making an announcement that he will impose a 70% levy on all alcoholic beverages. This was later reduced to 30%. Media reports earlier in the year indicated that President Khama made a public pronouncement at his favourite announcement platform - the Kgotla, that he will hike the 30% levy soon. In as much as we subscribe to curbing alcohol abuse, we doubt if making alcohol expensive is a sustainable solution.  There are also a number of reasons why people over-indulge in alcohol.  Amongst them is unemployment and poverty which have been brought about by failed BDP policies. Aggressive and targeted public education on alcoholic substances pioneered by the government and the entertainment industry will no doubt be an effective way of controlling alcohol abuse.

Making alcohol expensive will have inherent long-term effects. For instance the development of our tourism industry will be stagnated by a non-existent entertainment industry as a result of reduction of trading hours of liquor outlets (which has led to job losses). Like the increase in electricity tariffs, the hiking of alcohol levy is also going to raise inflation.

Botswana voters must hold their government to account and appreciate that it is possible to prosper in Botswana provided there is a willing and committed political leadership. Economic development and transformation need to be pioneered by citizens.  

A precondition for this is government intervention to provide political leadership in whatever way possible including legislation to guide and protect citizen participation in economic activities.

It is only when the bulk of government procurement benefits citizens in an equitable manner that money will circulate in the country and the development of other sectors will be realised. This will increase government revenue in the form of taxes accruing from the emerging sectors. There will be no such a big deficit as it is currently the case. Government will not have to pass budget shortfall to citizens through introduction of school fees, salary freezes, hiking of utility costs, excessive fees to access essential services,  VAT increases etc.

The increase in alcohol levy by 40 %, increase in electricity tariffs and VAT which will all effect on the 1st April are going to increase inflation significantly. The net result of the failed policies of the BDP government is increase in inflation at a time when goverment employees have not had a salary increase for the last two financial years.

The workers' purchasing power has been completely eroded. Also because of the BDP government endorsed policy of inflation targetting, the increase in inflation is going to lead to Bank of Botswana increasing the Bank rate as a way of curbing inflation. This will slow down our recovery from the recession as high interest rate slows down investment. As a result the ordinary citizens and workers will be hardest hit. 

It is high time Batswana started realising that their interests are identical to those of the ruling political elite, represented by the BDP.

As the main opposition party in the country, the BNF will continue to engage the BDP to ensure that the interests of Batswana come first. As a nation we should say NO to BDP policies because they breed poverty.

Moeti MohwasaBNF Information and Publicity Secretary