Thursday, October 28, 2021

BEMA wants Gov’t to ‘force’ retailers to procure locally

The Botswana Exporters and Manufacturers Association (BEMA) has called on government to bid support from the retail sector to local producers and suggested that it attaches conditions to their trading license requirements if need be.

“BEMA believes that at least 30% of what is on retail shelves should be locally produced, with the exception of those products that are not available locally,” said BEMA President, Nkosi Mwaba.

BEMA, a member based organisation that advocates for an enabling business environment for local exporters and manufacturers, regards government’s intervention as necessary because the growth of the manufacturing sector plays into the diversification of the economy. “Retailers play a big part in the growth and development of manufacturing in any emerging economy,” said Mwaba. He is of the view that the retail sector is overlooked in talks involving the economy’s move from dominant mining activities to other equally significant productive activities.    

The retail sector has previously attributed the limited shelf space for locally produced products to their poor quality and inconsistent distribution. The sector largely procures products from neighboring country, South Africa, where most retailers in Botswana have origins. On the issue of quality and consistency Mwaba said they have recognised the need to focus on them and will be signing an MOU with BOBS in the near future.  He added that they have engaged and developed positive working relationships with other enablers to the sector such as BITC, PPADB and EDD amongst others.

Mwaba expressed confidence in local producers in their ability to service the local market given the opportunity. “With the right mind-set and willingness to buy local, the manufacturing sector in Botswana will see exponential growth within a very short space of time,” he said.

Established more than two decades ago BEMA has contended a myriad of issues relating to manufacturing locally. The manufacturing sector has over the past three years been under siege as was demonstrated by massive job losses and shut downs. Mwaba pointed out that local producers compete primarily on cost as opposed to innovation or technology as is the case in developed economies and though he acknowledged government’s continued efforts in reducing the cost of doing business he suggested further reformation. “We encourage Government to focus its policy reform strategies on subsidising input costs and offering to incentivise manufacturers on that basis,” he proposed. This, he said, will support the growth of the sector given that cost competitiveness is important for the survival of producing firms. Government’s efforts in reducing the cost of doing business include development of Special Economic Zones (SEZs), creating a one stop shop platform and economic stimulus initiatives that have provided a certain boost to the sector.

The manufacturing sector has limited levers to pull to spur further growth which makes initiatives such as the African Growth and Opportunity Act (AGOA) important to participate in. AGOA is a unilateral trade arrangement by the US for African member states. It was signed into law in 2000, for a period of eight years, and was further extended until September 30, 2025. The benefits provided by AGOA have allowed for an average of around 70 per cent of all imports from Sub-Saharan Africa to enter the US duty-free. According to Mwaba BEMA co-chairs the AGOA Reference Committee tasked with formulating a response strategy for the extended AGOA initiative to 2025. This and other initiatives are expected to bolster the sector.

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