AP’s economic growth projections for 2025 both aspirational and scientific

03 Feb 2019

“Our ambitions in six years in the New Botswana are to grow our economy by at least 10 percent on average, drive non-mineral exports to at least 40 percent of GDP and shrink unemployment from 19 percent to less than 10 percent, augment manufacturing output to 20 percent of GDP, and make Botswana a transport hub for the 277 million strong SADC market,” Gaolathe said when addressing party members at Ave Maria Pastoral Centre in Gaborone on Wednesday evening. 

It is common for political parties to season their electoral promises with figures that they often cannot justify - meaning they just plucked them out of the air. AP appears to be a different kettle of fish. To Sunday Standard’s question about whether the 10 percent economic growth projected for 2025 was merely aspirational or scientific, Gaolathe, said it was a combination of both. In terms of aspiration, the party retains “strong faith” that it is possible for Botswana to achieve such growth if it puts its mind to it.

“It is also the type of aspiration we have no choice but to have if we truly hope to transform the material conditions of all our people. It is comforting that this nation has done it before, and so that is a good starting point,” he said.

The scientific justification he offers is as follows: “Let’s take average growth rates for five-year passages of time for the 20-year period commencing in 1970 until 1990 - all of them registered an average annual GDP growth rate of at least 10 percent with the first five-year period between 1971 and 1976 actually experiencing average annual GDP growth of about 18 percent.

He adds that it is also a source of hope that other countries, particularly those in northern east Asia, have been able to sustain these kind of growth rates for long periods, over several decades. That was despite the fact that some of them did not have the type of material natural resources that Botswana has in abundance like minerals, solar energy, land as well as flora and fauna.

“I also believe that some of the major factors that are hampering our potential breakthroughs to that path are man-made, and so we can overcome them. Such things as the way we govern ourselves, our system of checks and balances - which I believe breeds corruption - and lethargy, kill the spirit of fairness, excellence and high drive. We need to fundamentally restructure how we govern ourselves so that we can build and oil the type of economic institutions - strong institutions - that breed, cultivate and sustain incentives for a mindset of entrepreneurship, production and high achievement.”

Of interest in shrinking unemployment from 19 percent to less than 10 percent is a corollary issue of job quality. A good many of those in the 81 percent bracket hold precarious jobs whose slave wages don’t enable them a decent life. Employers also routinely trample upon the rights of those people not just as workers but human beings as well. A couple of years ago, there was a story in The Voice about a young man working at a Mogoditshane bakery (who could well have been a vegetarian) who suffered unimaginable abuse one cursed day. The male manager called her to his office, locked the door and proceeded to shove his member into her mouth.

Some employees, especially women, are forced to stay in jobs where they are treated like used contraceptives because they don’t have any other employment choice. In his address to the party faithful last Wednesday, Gaolathe promised large-scale industrialisation that would generate “hundreds of thousands of jobs” for the masses. His elaboration of this point to Sunday Standard is that laying a foundation for a “broad-based, inclusive, diversified and fast-growing economy” would guarantee decent employment.

“When we talk about this change in the structure of the economy, we automatically mean the emergence of sectors that are, by their nature, higher value sectors that intrinsically are able to pay workers well,” he said.

He added that some of the sectors that the AP is looking at driving (such as aircraft maintenance, higher productivity agriculture, data-centre and transport hubs, agro-processing and some manufacturing subsectors) pay higher than the current structure of the economy is able to pay workers in Ipelegeng (the labour-intensive public works programme), low-productivity agriculture and lower-end occupations in low value-adding sectors. 

“There is no comparison between what a well-balanced, diversified, export-focused economy will be able to pay compared with what the current economy is able to pay,” says Gaolathe, who is also the Gaborone Bonnington South MP. 

The one other shift that he recommended at the policy address is from the low-volume, high-end tourism strategy to a hybrid one. There is received wisdom that the latter strategy has served Botswana well because fewer, high-paying visitors don’t despoil the environment in the manner that many, low-paying ones would. Last year, after attending the Southern African Customs Union (SACU) summit in Gaborone, eSwatini's King Mswati III, was whisked away to the Okavango Delta in order to enjoy its splendour. His chief tour guide, then Minister of Environment, Natural Resources Conservation and Tourism, Tshekedi Khama, touted this strategy and proposed that eSwatini could help Botswana popularize it. Conversely, Gaolathe thinks the strategy is regressive.

“High-end tourism strategy by nature means the required standards for hotel facilities are pitched far too high in a way that there are formidable barriers to entry for potential investors/consortia/trusts that can potentially compete in this sector,” he told Sunday Standard by way of elaborating on a point he had made at the policy address. “And so, this tends to close out a broad base of potential economic actors from among our people and communities.” 

While he accepts the need to have high standards, the AP president stresses the need to counter-balance such imperative with standards that reduce high capital barriers to entry. Such ideal situation would give more youth and not-so-well established entrepreneurs a chance to participate in the tourism sector. 

“Having a hybrid strategy would have this effect of making the tourism more inclusive by also widening the volume of potential traffic that is mid-income level and demands a wider range of goods and services that SMEs can potentially provide and grow from,” he says.

Professor Joseph Mbaiwa, who is the Director of the Okavango Research Centre at the University of Botswana, has made about the same point. Speaking to Sunday Standard last year, Mbaiwa said that this strategy has closed out many Batswana who want to venture into tourism while promoting the dominance of international tourists, foreign safari companies and investors. Former President Ian Khama has been too closely associated with the latter group.

In his address, Gaolathe proposed to expand the tourism hub in the Okavango-Chobe-Makgadikgadi triangle, as well as develop the South East (Gaborone and neighbouring areas) as a regional MICE (meetings, incentives, conferencing and exhibitions) centre.