Saturday, May 28, 2022

BEMA calls for sea change in trade policies to support local industry

The Botswana Exporters Association of Botswana (BEMA) has urged a sea change to refine trade policies in a bid to make them more protective of local industries.

The body that represents manufacturers say programmes such as Economic Diversification Drive (EDD) and Citizen Economic Empowerment (CEE) policies, trade policies and Industrial development legislation must be cohesive, effective and in line with the current state and maturity of the local industry.

BEMA President Nkosi Mwaba told Sunday Standard on Friday that their members are concerned that is almost impossible for Botswana companies to win tenders in South Africa and yet foreign companies are having field day here.

“SACU countries for instance, have a mixture of restrictive and free trade policies and these are designed by each member state to protect their own enterprises and thereby promote industrialisation,” he said.

“Botswana needs to consider taking a harder stance on the structure of its trade policies in relation to regional trends and recognise that industries amongst regional trade member states have not matured at the same rate.”

According to Mwaba, their members also face internal challenges that are brought about by local procurement processes, codes and documents within the tendering processes. For example, he highlighted that some BEMA members who are bona fide, registered and qualified manufacturers lose tenders to traders, agents and fly-by-nights as a result.

“This happens despite the fact that certain tenders are reserved for manufacturers or producers,” he said.

“We strongly believe that the PPADB has to play a more prominent and meaningful role in promoting local beneficiation and industrial growth by addressing current loopholes in the process.”

“We have instances where some BEMA members have qualified for tenders in South Africa and have lost out on these bids simply because they did not meet the BEE requirements. Policies similar to BEE in South Africa are inclined towards promoting participation of SA companies and encourage growth of their local industry.”

He argued that in quest to attract Foreign Direct Investment (FDI), one must remember that current players in the industry are also potential investors in their own growth and thereby in the growth of the economy.

He said there is extensive effort and expenditure in programmes that attract FDI in the form of new investments.

“Our sentiments as BEMA are that existing businesses must be awarded similar effort in order to encourage growth and export development. We should be concerned about the industries that are failing and enterprises that are shutting down within Botswana and similarly, make an elevated effort to ensure their survival and competitiveness.”

BEMA however is supportive of EDD, which they argue is an excellent programme in principle and that it is encouraging that Government comes up with such tools to boost diversification efforts.

Mwaba said with the country’s buying power averaging P20 billion per annum, the efficient implementation and management of such programmes and policies is critical. However, he said they are worried by mismatch between imports and exports which paints a clear picture of how much work still needs to be done within the local manufacturing industry to enable meaningful diversification through exports.

Latest export statistics show that 80 percent of Botswana’s exports were diamonds whereas Copper and Nickel contributed another 10 percent of our export bill. This means 90 percent of exports are derived from mining and minerals. Botswana’s export bill for this period was just over P66 billion.

Mwaba said BEMA has formulated a roadmap that will see the effective implementation of a new direction the Association is taking in addressing member concerns.

“We have identified key enablers and strategic partners who we will work closely with to share experiences and find mutual ground in building a more robust public private partnership in developing Botswana’s industries,” he revealed.

“We are confident that the efforts from both sides of the table will see local producers and exporters build companies that will bring about a more positive impact on the economy of Botswana.”


Read this week's paper