What does this negative rate of return mean? Dr Howard Sigwele, a retired agricultural and trade economist explains that the country is spending more to realise a single pula. The reality is that the investment in the agricultural sector is not profitable but rather a loss as contained in the World Bank report of 2017, which acknowledges, “the rate of return (ROR) to total agricultural spending is the lowest in Africa”. In fact, it was a negative 25%.
According to Sigwele, who is currently a practising agricultural and trade consultant, over the years Botswana has spent lots of public funds to improve the agricultural sector, without much success as shown by the persistent negative rate of return. “All independent assessments have found that the country spends more to generate a single pula than is necessary,” he said. Sigwele added it has now become critical than ever to improve the sector’s productivity in terms crop yields, beef per animal production, milk per animal production, output per unit of labour and other productivity variables. It is also imperative that to support the agricultural sector, a strong provision of the necessary infrastructure, effective extension services, water, energy and others is urgently undertaken. The agricultural sector’s contribution to the gross domestic product (GDP) has been poor over the years, averaging two percent. But how did the decline occur?
