The revelation that government has turned down a loan from the Chinese government for the rehabilitation of the Nata-Maun road, sends positive signals of a commitment to prudent fiscal management.
This is not in any way to impute ignoble intentions on the Chinese government. China is and has always been an important development partner to Botswana over the decades, helping with technical and financial assistance in the delivery of some of this country’s most important development milestones. The Oriental giant has and continues to support the education of Batswana each year, who then return home and put their shoulders to the national wheel.
Even in this particular case, China’s goodwill may be noted in the grant of P3.4 million for a feasibility study for the project, and the cancellation of more than P80 million in debt owed by Botswana. Indeed, China had pledged about P12 billion in concessional loans to various road and rail projects sought by Botswana.
The issue, as succinctly explained by Finance Ministry technocrats, is not the goodwill or friendship between Gaborone and Beijing, but rather the terms of the loan and the time taken in the negotiations over these.
According to Finance permanent secretary, Wilfred Mandlebe, one of the contentious terms was around the choice of contractor for the project, with the Chinese insisting that this must be undertaken by a firm from their country.
This, actually, has been the Chinese government modus operandus not only in Botswana, but Africa. While on some level this could be viewed as fair, given the concessional funding, in the era of restrained funding
One obvious criticism of this modus operandus is that it creates opportunities for Chinese state and non-state firms in countries such as Botswana at the expense of alternative capacity, including that of local players. It also raises questions of quality and standards associated with restrictive project award, while also limiting the contractual avenues for remediation in cases of dispute.
Because these contractors are almost always Chinese-state affiliated, political and diplomatic sensitivities tend to complicate contract disputes, as witnessed with the P11 billion Morupule B power station whose troubles at one point necessitated trips to seek the intervention of authorities in Beijing.
As Finance Minister Thapelo Matsheka pinches pennies and scrambles for revenues to carry the nation through the Covid crisis, it is critical that government pays extra attention to each obligation and commitment it signs Batswana to.
Without specific reference to the Nata-Maun project, there is an inherent risk that imprudent assessment of loan agreements could lead to the country mortgaging itself and its future, sacrificing good sense on the altar of expedience.
As former president, Festus Mogae famously said: “straight talk breaks no friendships”. Botswana values China’s assistance and as friends, we should all speak up in the relationship.
“My best friend is the man who in
wishing me well wishes it for my sake”