Saturday, September 19, 2020

Botswana has a ‘huge mountain of obstacles to surmount before doing businessÔÇö-Report

Although Botswana’s private sector climate is complimented by the country’s proximity and access to South Africa’s developed infrastructure, report of a joint Investment Climate Assessment by Government of Botswana and the World Bank shows the country has a significant host of obstacles to forego if it has to attain the level of high income status, envisaged by Vision 2016.

 It was against this background that the 2007 Global Competitiveness Report, by World Economic Forum ranked Botswana 76 out of 131 world economies.

 While there were areas in which Botswana seemed to fare better in comparison to other countries, the Investment Climate Assessment Report identifies skills shortages and labour productivity as the most worrisome of challenges Botswana need to overcome. 

“For example, less than 40% of manufacturing firms in Botswana provide training, whilst in comparison over 70% of firms in Thailand, China and Chile provide training to their workers,” stated the report. In the same vein, 60% of firms in South Africa as in Mauritius have been recorded as offering training to their employees.

 Labour productivity and total factor productivity are reported to be relatively low. Such that a median manufacturing firm in Botswana produces about 8000 Dollars of value added per worker compared to between 14000 Dollars & 28 000 Dollars per worker in Malaysia, Namibia, Chile and Argentina well as South Africa.

It has been cited as a disturbing factor, that land ownership in Botswana remains problematic compared to other middle income countries.

┬áFurthermore, Botswana’s export and domestic sales are reportedly concentrated towards Government especially for domestic firms (about three-quarters of all output), than firms in comparator countries.

 The GOB/World Bank report further pointed out that about 38% of small, medium and large enterprises and 78% of micro enterprises have rated lack access to finance as a major severe obstacle.

 That is in comparison to the 10% of small and medium sized firms in South Africa and Malaysia.

 As to whether Government has fully resolved on any clear cut policy direction it wants to take regarding the place of the private sector in terms of creating the right environment, that still has to come out clear.

┬áHowever, reference is made to Botswana’s decision to introduce six hubs as a way of stimulating the appropriate clout for business and a conducive atmosphere for investment in Education, Innovation, Agriculture and Diamonds exploration and processing. The Medical and Transport hubs form part of the initiative.

Notwithstanding these initiative, the 2009 World Bank’s Doing Business report ranks Botswana 38 out of 181 economies( up from 51 in 2007).

In spite of this, there are 11 pre-investment procedures requiring 108 days to fulfill in the case of Botswana compared to 38 days in Seychelles, 44 days in Kenya and 7 days in Mauritius while in Mozambique it takes 29 days and 99 days for Namibia.

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