Botswana's economic independence agony

Motorists queuing for fuel PIC: MORERI SEJAKGOMO
Motorists queuing for fuel PIC: MORERI SEJAKGOMO

Since Botswana attained her independence some 54 years ago, the advent of the COVID-19 pandemic has actually exposed our weaknesses as a country that is struggling to diversify its mineral-dependent economy, feed itself and provide certain important services without a hitch. Mmegi Staffer RYDER GABATHUSE follows a developing story at a time when the length and breath of the country is experiencing acute fuel shortages

FRANCISTOWN: A question on everybody’s lips today is where have we gone wrong as a country? Our dependence on the neighbouring Republic of South Africa for everything is apparently widening instead of narrowing.

Botswana attained her independence from being a British protectorate some 54 years ago and for a country classified as a middle-income economy, with a population of over 2.4 million people, it’s worrying that Botswana’s political independence didn’t come with economic independence.

Besides the rising unemployment, Botswana’s dependence on her neighbours and in particular South Africa, is a cause for concern. From time immemorial, Botswana’s ruling elite has been singing a song of diversifying the economy away from being mineral-led. But Botswana’s economy is still dependent on minerals mainly diamond, a resource that is susceptible to economic turbulences. At the beginning of last April, the shelves of many retail shops at some stage were literally empty as the panic-buying bug hit the public. The public feared that food imported from South Africa might take longer to be replenished. Today, Botswana is grappling with yet another problem, fuel shortage, which is threatening to cripple the precarious economy. Botswana imports fuel, food, beverages and tobacco, machinery and electric equipment, chemical and rubber products and vehicles. Its main imports partners are South Africa (75% of total imports), China, Israel, Namibia and Zimbabwe, journals reflect. On the other hand, the exports mostly diamonds (more than 60% of total exports), copper and nickel, beef and textiles. Botswana’s main exports partners are United Kingdom (56% of total exports), South Africa, Israel and Belgium.

Statistics Botswana’s International Merchandise Trade Statistics (IMTS) monthly Digest presents statistics on Botswana’s total imports and exports of goods. For instance, in February 2019, total imports were valued at P6, 206.2 million while total exports were valued at P3, 178.7 million, resulting in a trade deficit of P3, 027.5 million.  According to Statistics Botswana’s IMTS, total imports for February increased by 33.3 percent compared to the revised January 2019 value of P4, 656.3 million.

“Diamonds contributed the most to total imports at 39.9 percent, followed by vehicles and transport equipment with 10.4 percent while food, beverages and tobacco and machinery and electrical equipment contributed 10.2 percent each,” further reports the IMTS.

Total exports for February 2019 show a decline of 33.5 percent when compared to the revised value (P 4, 783.2 million) of January 2019. Most of the contribution was attributed to Diamonds at 88.9 percent, followed by machinery and electrical equipment and salt and soda ash with 3.4 percent and 1.4 percent respectively.

Commenting of the scenario, Adam Mfundisi, University of Botswana (UB) lecturer in politics and administrative studies, speaks from a perspective anchored on the analysis of public policy in his interview with Mmegi.

In his view, over the last 50 plus years, Botswana had poor political leadership. He says one party dominated the political system has been a major liability. Voters, he says, were hoodwinked to view progressive policy proposals of the opposition as weird dreams. Each successive BDP leader was hostile to the opposition denigrating all suggestions tendered by the opposition.

“Some reforms were adopted at later times when opportunities have been missed. For example, brilliant proposals by the opposition on irrigation as a progressive development towards food security were shot down as communist ideals, which was not achievable,” posits Mfundisi.

Lack of strategic leadership he observes, is the main factor indicating that the BDP successive political leaders had no vision and strategies to usher a progressive economic policy for economic independence.  “Political independence predominated their political agenda. Parastatals were not created as vehicles for economic independence and sustainable development,” he says and adds that they ( parastatals) were created for pursuing interests of the ruling elite at the expense of public interests.

Mfundisi also observes that parastatals eventually turned into haven for corruption. The ruling party elite, he says, used them for personal gains of the few.  “They became avenues for mismanagement, patronage, and embezzlement of public resources to benefit the few. Tenderpreneurs within the ruling class consumed government’s tendering and procurement processes.”

He blames the crises Botswana faces today on what he calls “regressive and reactionary policies of successive BDP leaders and government. The Middle Income Economic status does not reflect itself in realistic terms.” To the UB academic, the dependence of the country has always been a ticking bomb. He feels the BDP government should have developed policies to reduce such dependence particularly during Apartheid period.  He is steadfast that the BDP-led government ignored all progressive policy proposals from progressive forces in the country. On the other hand, he says the dependence on diamond revenues blinded the current government’s vision for the future.  Mfundisi says Botswana is an exceptional country where the economic status is not reflective of the socio- economic and political development.  In the midst of plenty, he says, there is abject poverty, unemployment, criminality and diseases.  His judgement is that economic diversification is a mirage in Botswana; a facade peddled for political expediency.  He sees no practical policies adopted to transform the economy for sustainable development. Instead, he only sees trials and error management of the economy, which he says will not deliver economic diversification.  Tourism sector to Mfundisi is a viable alternative to the mineral sector, “but practically foreigners dominate it and most of the proceeds do not enter the country.” Mfundisi’s UB colleague, the institution’s lecturer Business and Finance, Mphoeng Mphoeng posits that the slow evolution of the Botswana economy from being government-led to being private sector led is really a result of our past economic success between the 70s and 2010.   Whilst the country had clear efforts and opportunities to evolve, Mphoeng says the motivation was reduced by a booming economy that provided opportunities for most of its citizens and showed an upward trajectory for most people’s living conditions.  “This reduced the hunger needed for different stakeholders to play their roles effectively. Policies from as far back as 70/80s encouraging businesses to take over and make Botswana self-sufficient weren’t implemented, measured and followed through upon as effectively because the need wasn’t urgent,” he says. The past decade according to Mphoeng had stagnated growth and increasing unemployment and that necessitated a transformation as President Masisi has been advocating for but Covid19 has now brought our deficiencies heavily into public conversation.

He emphasises that Botswana is now realising a need to be able to be innovative and do more with less.  “As a relatively young economy, it must be remembered that Botswana was moving from being one of the poorest countries with a low literacy rate 50 years ago. The governments challenges evolved over time and by late 90s early 2000s we were fairly self sufficient from a workforce standpoint.” Mphoeng further observes that effectively Botswana’s education system up to then was built to feed the civil service, parastatals and multinationals.  Unfortunately the country hasn’t evolved since then to move from developing workers to also developing entrepreneurs. Mphoeng says this has frustrated other policy efforts aimed at “empowering us to become business owners that could effectively take advantage of potential opportunities especially around import substitution and manufacturing. “ That said, Mphoeng notes that the current pandemic provides a great opportunity for citizen economic empowerment and the economic recovery and transformation plan, for us to rationalise all our policies and ensure we make them more effective

“The main lesson is the need to be self-sufficient. The need to grow our own businesses that will fuel jobs. This pandemic will fuel greater national will for us to do import substitution and become self-sufficient,” adds the UB academic.

He is steadfast that the greater focus on citizen empowerment hopefully will lead to policies and laws that will create a conducive environment for the local entrepreneur. Whilst most of these policies exist, Mphoeng’s hope is that the country would rationalise the many and create one simple, clear and pragmatic policy direction with all stakeholders buying in and being on board.”

 The success of such policies cannot be put down to government only. For the policies to work, the UB academic stresses a need them to be driven by the potential users, the businesses and citizens therefore we must employ a bottom up approach to how we develop our interventions. 

“Another big lesson Botswana as a whole needs to learn is budgeting for value,’ Mphoeng says. For too long in the past, “diamonds fuelled our budget and we didn’t need to be effective in procurement or spending. This has lead to resource waste in the past. It is important that as a country we re-examine how we work and where we spend our money and what value we must demand from all the recipients of our moneys.”

On the other hand, Mphoeng is of the view that COVID-19 showed that when faced with challenges Batswana can rise to the occasion.

He acknowledged that an entrepreneurial and problem solving spirit has been displayed during this pandemic that we can lean on going forward.  Universities and research institutions such as BITRI and BIH and their students showed an ability to innovate and solve problems, which Botswana had never seen or given an opportunity to be seen.  “Creating an effective problem-solving environment that encourages internal solution finding rather than the current external favouring rendering system, will allow for young Batswana to transform the economy by solving problems which government and big businesses have. “

 Botswana, according to Mphoeng has a robust economic foundation built on excellent policies, which have led to an educated nation and a growing middle-class.

Unfortunately he says, “Our predisposition has always been to depend or look to government for problem solving. Government itself has also not been fully trusting of its other stakeholders.”

 This relationship, surmises Mphoeng, “has meant that we haven’t been fully able to harness the internal capacity we have as a country. The capacity of what the citizenry can produce if given a proper effective chance and the capacity of what government can deliver to its citizens if it had better evidence based policy decisions making with effective monitoring and evaluation.”

Although our strength is our economic wealth Mphoeng concludes that we are currently not leveraging off it as well as we should be due to waste and lack of focus. 

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