Monday, June 24, 2024

Alcohol Levy is a glaring testimony of Khama’s failed economic policies

If there is any policy position that has been discomfiting and difficult to justify for the Government of Botswana, it has to be the Alcohol Levy.


Eight years after the policy was introduced, not a single official in Government other than President Ian Khama wants to be associated with it.


Even spin doctors have long stopped trying to justify it.


The policy started as a joke. It will probably end as a joke. The only tragedy is that it has resulted in real tragedy to many livelihoods and a real destruction of once thriving businesses.


The then Minister of Trade, Dan Moroka was tasked with the onerous task of demonizing alcohol to the nation. From his tone in the numerous public meetings that he addressed he was clearly unconvinced of the reasons he had been forced to convince the nation on.


A dyed-in-the-wool entrepreneur, Moroka cut the image of a man who against his will had been forced to negotiate the sale of his most prized asset.  The meetings he addressed across the nation were a pathetic sight.


One could not help but feel sorry for the man. He was participating in a game the rules of which went against his conscience.


The Alcohol Levy is by far the most glaring example of President Ian Khama’s scorched earth and absolutist demeanour.


The failures of this policy have given ammunition to the levy’s traditional critics who have always argued that it was a hurried project, predicated on medieval-like instincts and emotions that are not based on any scientific dictates.


The Alcohol Levy was introduced a few weeks after President Khama ascended. The haste with which it was introduced was most telling.


It should be our hope that his successor will be even quicker to repeal it.


But as it stands, it is a policy mishap from which as a nation we might take longer than a generation to recover.


To make the levy even brasher, it was introduced through a presidential decree without the slightest attempt to even disguise and dress it with any supporting legislative infrastructure that would have induced any semblance of popular legitimacy, however superficial.


This was perhaps a result of reluctant admission on the part of its patrons that the reasons advanced were unconvincing.


Other than assuaging the bloated egos of its inventors, it is infinitely impossible to identify even a single positive that has flowed from the levy.


Economically, the Alcohol Levy has been a major tactical as it has been a strategic mistake.


Thousands of direct jobs in the brewing sector have been lost. Many more thousands indirect jobs have literally varnished as a result.


Entire industries like those in entertainment have closed down. The once blossoming tourism sector, which across the world is increasingly getting inter-linked to the entertainment industry, has lost its verve. But then all those do not matter to the patrons of the levy whose fanaticism in its enforcement can only be compared to that of religious crusaders.


Eight years on, there is a visible dislocation between what was promised when the levy was introduced and what it has achieved.


As it is we have all lost track of the reasons why the Alcohol Levy was introduced in the first place.


Alcohol sales have not gone down ÔÇô at least not in any manner that correlates with the levy.


There is no public accountability on how the money accrued from the levy is used.


Snippets coming from that side of the equation indicate a capricious level of unaccountability that easily borders on money laundering.


Not a single alcohol addiction rehabilitation centre has been built in the country.


The promise that Batswana would reduce drinking because alcohol had been made artificially too expensive has proved to be a wishful thinking.


There is no evidence to suggest that because alcohol is now much more expensive, road accidents have been declining on account of the levy.


Divorce rates and domestic violence, twin evils that were a popular refrain used to justify the levy by its adherents have continued to rise despite the levy.


The spread of HIV/AIDS, which the levy proponents had linked directly to low alcohol prices continues unabated.


Other than being remembered as a historical nuisance from our political leadership, not many Batswana outside the Ministry of Trade will from the top of their heads remember how much the Alcohol levy is today.


As in any secular, modern and liberal society, alcohol will always provide challenges of social malaise.


But taking a swing for the fences as our government did with its introduction of a whimsical levy that was not supported by any public education was inevitably going to be counterproductive. And sure it has been!


Because the levy has dismally failed to achieve any of the goals for which it was intended, it is only fair that it is scrapped out.


The Levy has provided no winners; only losers, the biggest of which is Kgalagadi Breweries ÔÇô a onetime blue chip that has since 2008 shed millions as it struggled to compete in a trading environment where the Government has acted like a regulator, protagonist and hangman all at the same time.


The upshot of it all is that Kgalagadi Breweries has seen its ranking of importance based on profitability inside the multinational parent company, SABMiller decline to appallingly low levels.


It is amazing that Kgalagadi Breweries has remained committed to Botswana despite the challenges they have been put through in the past eight years by a Government that feigns to support business.


More to be admired is SABMiller’s patience in the face of this unprovoked intervention by our Government.


Any other company would have long closed their brewing plants and left our shores, especially given the fact that with the Alcohol Levy SABMiller stood a better chance to make more in Botswana by trading from outside the country.


More disheartening however is the fact that Botswana Government has a sizeable stake inside Kgalagadi Breweries which is held through Botswana Development Corporation ÔÇô a wholly owned state investment company.


The Alcohol Levy has been an enduring sign of the times in which we live.


It has constituted a phase in our history that is best forgotten.


We can do ourselves a great good by investing our hopes in a future that is much better than what we have seen.


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