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A proposal to President Masisi: Game-changing economic policy reforms - a five-point plan

In 2013 during a press conference to announce Nokia being acquired by Microsoft, the CEO of Nokia, Stephen Elop ended his speech by saying “we didn’t do anything wrong, but somehow, we lost”. Such an ending is devastation considering Nokia used to own a large portion of the smart phone market share before the iPhone came out in 2007.

In a LinkedIn blog, Ziyad Jawabra notes that although technically Nokia did nothing wrong, it was their refusal to change and learn new things that led to their demise.

One lesson we can learn from Nokia’s story is the importance of sustained competitiveness and strategic adaptation. Just like a company, a country needs to have systems to enable continued global competitiveness and adapting to change.  This involves the constant review of its economic policy to ensure resilience, development and drive job creation. Our country has the people, the skills and the goodwill to address the challenges of low economic growth and unemployment. In this article, I present a five-point plan, which will hopefully trigger valuable public discourse that will lead to the formulation of an economic policy package that would guarantee job creating economic growth.


Encourage Public-Private Partnership (PPP)

PPP are a means of providing public assets and services, expanding the fiscal space and reducing over-reliance on government spending. This procurement model result in better roads, educational and healthcare facilities, improved and efficient supply of water and electricity, opening of new markets and increased economic opportunities for the country’s population.  A well-planned PPP programme provides a competitive edge for investment in infrastructure and encourages the flow of private sector capital into infrastructure, as demonstrated by successful jurisdictions with mature PPP markets like the United Kingdom, South Africa, Canada, Latin America and Australia.

The PPP model has served us well in the mining sector – through the Botswana Government and DeBeers partnership. We have to replicate this successful model by adopting PPP to create more “Debswanas” in the tourism, agriculture, manufacturing, education, healthcare and financial services sectors.  This includes the ambitious possibility of creating a sovereign wealth fund company that could play a role similar to GIC Private Limited owned by the Government of Singapore in the international stage. For these reasons, PPP should be at the centre of our strategic planning.


Position Botswana as a SADC region logistics and value-added manufacturing hub

Botswana’s strategic location in the Southern African Development Community (SADC), makes it a naturally strong logistics hub for the region. We need to take advantage of this geographic location and develop strategies that promote trade facilitation, improve connectivity and travel efficiencies within Botswana and with neighbouring countries. This can be achieved by the following:

Developing the North-South Botswana Highway: a dual carriage linking Ramokgwebana and Ramatlabama with offshoots to Tlokweng, Martins Drift and Kazungula Border gates and connections to the A2 and A3 highways.

Furthermore, we need to improve efficiencies at our ports of entry by promoting the establishment of one-top border posts and ensure increased mobility by introducing “visa on arrival” facilities.

The proposed North-South Botswana Highway can actually be funded off-balance sheet and with little impact on the fiscal budget. We just need to ring-fence a portion of road tax and other road transport levies and raise capital against future revenue.

Developing the most viable option between Trans-Kalahari Rail and Botswana-Mozambique Rail Projects: we need to commission a diagnostic study on the two proposed projects to identify economic sectors on the routes and progress the most viable of the two projects and developing it as a value corridor.

In developing these project, we will need to appreciate that some infrastructure projects are implemented for strategic reasons, hence our Government would have to invest on de-risking the project to make it bankable and attractive to private sector investors.

This can be in the form of the Government taking the risk of demand for use of the asset by underwriting minimum level of usage. Funding for this project can therefore involve a mixture of user charges and Government’s patronage guarantee. Enable connection to South Africa rail infrastructure by commissioning a rail line between Mahalapye and Lephalale. Fast track the implementation of our Special Economic Zones programme.

Keep Air Botswana in the air: we need to restructure Air Botswana by procuring an experienced airline operator (via a management PPP contract) to take over the operation function of our national carrier. The operator contract should be based on a payment mechanism that incentivises competitiveness and improvement on efficiency and profitability.


Provide modern economic information and technical support

The successful formulation of policies that support job creating economic growth require

access to modern real-time information; “big data” is crucial.

Valuable information gets collected by the various spheres of both public and private sectors on a daily basis. Furthermore, information exists in National achieves. These require urgent capture and analysis to turn them into valuable information to inform policy and investor decisions.

To achieve this, we will need to restructure, modernise and resource Statistics Botswana to collate this information and develop a modern, up-to-date, and real-time database. The many excellent young unemployed graduates can be absorbed into Statistics Botswana and re-trained in data collection, data analysis and statistical modelling.

We also need to provide incentives for research and development to aid investor decisions and for business development. Through R & D, we can for instance have accurate and up-to-date information on the amount of household and agricultural waste produced by each district in Botswana. This information is crucial in assisting investors to determine the feasibility of turning this waste into a valuable resource for the generation of energy from waste for instance.

Invest on research and development and project preparation to unlock private sector capital

The African financial service market is generally in a liquidity and capital strength position. Furthermore, the developed world is awash with capital. Insurers, sovereign wealth funds and pension funds are all looking for investments around the world to suit their long investment horizons and return requirements.

The only impediment to the follow of this capital is a lack of good projects to invest on. Before an investor, or financial institution embarks on a project, all aspects of the project must be carefully studied as part of the investment appraisal process.

The process typically involves undertaking a due diligence on the feasibility study of the proposed project to ascertain the technical, financial and legal risk profile.  A detailed feasibility study is essential to the lender’s because it will typically contain a number of key elements required for credit committee approval, including technical specification and design, environmental and social impact assessments, market study, and financial, economic and legal analysis.

However, the costs associated with these essential activities are prohibitive and hence good business ideas that could boost service delivery, manufacturing and industrialisation end up not coming to fruition.

Our Government can play an important role in the investment value chain, by creating a project preparation grant facility that can be used to cover project development costs up-to financial close.

This will aid the development of pipeline of bankable infrastructure projects that could enable project and corporate finance transactions. The project preparation grant facility can also be used for research and development to enable the commercialisation of innovation that is prevalent amongst Batswana.


Education Management

Education is an important tool for fighting unemployment and economic growth. We need to continuously reform our education sector by introducing periodic curriculum audits to ensure that the skills we impart on learners are aligned to the demands of the dynamic labour market and technological disruptions. 

This will require a pragmatic shift and ensuring that the curriculum in our schools is underpinned by a focus on Science, Technology, Engineering and Mathematics (STEM). The STEM approach is critical to developing an education policy and curriculum choices that would improve competitiveness in science and technology development. 

We can use the PPP model to roll out the delivery of educational facilities to create conducive learning environment as well as increase investment on ICT learning from primary education.

We also need to diversify tertiary education by making vocational and technical education attractive to JC and BGCSE graduates. Mr. President, Botswana has the potential to be the envy of Africa and the World. But this will require us to work hard towards creating a high-performance environment and culture, where the focus is on continuously implementing economic policy reforms that leads to our country achieving superior results. 

Just like Nokia, we don’t have to do anything wrong, but if the world changes too fast and we don’t adapt, we will miss out on making it big. This five-point plan is critical to our chance for survival. *Batho Mohwasa is a Chartered Quantity Surveyor and an Infrastructure Finance Advisory Practitioner. He has experience in PPP, Lenders Technical Advisory and Construction Commercial Management. He writes in his personal capacity.


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