Wednesday, January 26, 2022

BIDPA research fellow calls for diversification indicators, monitoring

Calls on the need to disentangle economic diversification and track it with monitoring and evaluation of programmes has been made in order to be clear on how the economy fares with current strategies.

Dr Grace Tabengwa—a macro economists and research fellow with Botswana Institute for Development Policy Analysis (BIDPA)—-said in order to have a deeper understanding of whether diversification strategies are paying off there is need to have diversification indicators in place to track and unbundle the non-mining sectors performance at a more micro level.

“When analysing diversification potential in Botswana, it is imperative to know how initiatives are performing since implementation to pick the change from the initial position, the rate of uptake of the new opportunities and penetration or survival in the local and external industry markets,” said Dr Tabengwa.

Her concern is that deliberations on diversification tend to be at a more aggregated level such that it is not clear the extent to which Botswana is diversifying and performing.

“Monitoring and evaluation is weak in this regard and this remains fundamental to timely re-focus strategies without devoting many years to strategies that would result in economic resource losses either time wise or cost wise without appropriate information to guide policy makers and implementers on time,” she said.

The recent IMF updates, show that the growth rate in Botswana would still take time to return to the high growth rates witnessed during the pre-crises period. This is mainly due to the fact that growth still remains weak in the developed countries with a direct bearing on the demand for Botswana’s main export commodity in the external markets.

For Botswana’s case, limited diversification with limited export commodities renders the economy vulnerable with the continued subdued growth requiring more and more focus on how best to attain broad based growth.

She said it is encouraging that the non-mineral sector has continued to remain stable registering notable positive growth rates.

“The trend in the stable growth realized in the non-mining sector is also crucial and indicative of whether strategies to enhance non-mining sector growth in the various sectors of the economy is bearing fruit,” said Dr Tabengwa.

She said monitoring and evaluation are key for the policy implementation perspective since one is able to assess the effectiveness of programmes and initiatives in meeting and attaining specific goals such as, employment creation, export diversity potential and sustenance as well as extent of attracting FDI and to which economic activities exactly.

“The prevailing situation makes it hard for one to actually be precise with where the economy stands to benefit more from certain potential opportunities and their momentum sustenance to grow the economy broadly to prioritise efforts to support potential opportunities more meaningfully,” she added.

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