Cut the red-tape

Recently, the Botswana National Productivity Centre (BNPC) released yet another lukewarm report on Botswana’s competitiveness, indicating the worsening of perennial challenges such as work ethic and official bureaucracy.

Of these two challenges, official bureaucracy is easier to grasp and repair, with the right tweaking of the balance between regulation and over-regulation. Where African competitiveness success stories such as Rwanda and Mauritius are pushing towards effective, dynamic and nimble governance, Botswana still favours the slow and steady approach of yesteryear.

The Trans-Kalahari Railway (TKR) is a great example of the weight bureaucracy is burdening our economy with.

The Trans-Kalahari Railway, an idea more than 100 years old, has been mired in such deep officialdom that it has missed several monetisation opportunities, and at present, the mines that are meant to benefit from it, doubt its feasibility.


Coal prices have slumped below the viability levels of the railway line and many experts, including leading economists such as Keith Jefferis, have publicly stated their scepticism that the coal price could ever recover enough to support the TKR.

In addition, the TKR is facing competition from alternative sea routes: one through Mozambique and the other through South Africa, where more dynamic leaders are fast-tracking infrastructural expansion.

Botswana and Namibia signed an MoU on the TKR in 2009 before Botswana scrapped an extensive tender for private equity in the project in 2011, throwing 36 bidders into confusion. The two countries then spent 2013 and 2014 missing deadlines to sign the bilateral agreement needed to advance the project further.

Meanwhile, the price of coal on the global market declined and the intended beneficiaries of the project all began shifting away from coal exports as a focal enterprise, towards power exports.

Today, the TKR’s major achievements are the MoU, the bilateral agreement and a project office. Talks on resuscitating the TKR’s viability by making a multi-commodity railway are moving at a snail’s pace, predictably.

 While some of the TKR’s problems can be attributed to Namibia’s own sluggishness, it is critical that our policymakers here once again learn the age-old adage about a “stitch in time”.

The use of smaller, more dynamic, flexible and semi-autonomous think-tanks is critical when approaching mega-projects, especially where the private sector will be engaged.

Investors are easily frustrated by the Savingrams and other red tape required to move government’s wheels, where a simple field trip may require single-source tendering, requisitions, approvals and others!

It is important to be prudent and avoid mortgaging Batswana to fanciful or ill-conceived dreams. It is equally important to exploit opportunities as and when they occur in an increasingly liquid global environment. A balance can be struck. Rwanda has done it.

Today’s thought

“Chance favours the prepared mind.”

 

 - Louis Pasteur

Editor's Comment
Escalating fuel prices cause panic

Nowadays it is not uncommon to purchase an item for a certain commodity and return to the shops in a week, to find the same item has gone up by a significant amount of money.Botswana Energy Regulatory Authority (BERA) last week announced yet another fuel price increase, which follows yet another increase that came into effect on March 29. Hardly two months later on May 12 boom, BERA announced yet another increase, which came into effect at a...

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