Botswana struggling to maintain its special cachet as a beacon of good governance and source of inspiration – an analysis by the African Development Bank (AFDB) has revealed. The AfDB report has turned up evidence that Botswana’s is not only failing to live up to its billing but is also unable to follow its socio-economic road-map, and faces being condemned to being just another African country. At the level of mundane optics, the AfDB report points to the country’s run down infrastructure where roads are in a desperate state and the cash strapped government is patching up potholes rather than fixing them. AfDB expressed concern at “inadequate funding for the maintenance of public infrastructure assets, resulting in their rapid deterioration and premature aging.”
All in all, AfDB undertook an in-depth analysis of Botswana’s economy and raised red flags on mining, tourism, employment/unemployment, Agriculture, Doing business reforms, trade and investment, infrastructure, manufacturing, ICT and Competitive Human Resources. The AfDB report stopped short of warning that diamonds are not for ever. It pointed out that the contribution of mining to GDP has been declining largely due to the plateauing of diamond production as the major mines mature as well as the loss of production from several base metal mines that closed a few years ago. Despite the flattening off of diamond productions, the precious gems continue to dominate the government’s revenue collection from the mining sector, contributing more than 99 percent of government mineral revenue in 2017/2018 and 2018/2019. The Bank said although the share of mineral production in GDP has been declining, the share of minerals in total goods exports has been steady in the range of 80-90% for the last two decades, illustrating the importance of diversifying exports, especially beyond the heavy dependence upon diamonds. Attempts to diversify the economy and create jobs have however fallen short because government policies and legislation, at times, are not in line with efforts to improve competitiveness, create sustainable jobs and bolster economic growth.
“Deficiencies in terms of Regulatory Impact assessment or Analysis Tools to guide evidence-based decision making, and ensure that any proposed new regulations are only introduced if the anticipated benefits outweigh costs Capacity constraints that impact negatively on the immediate development of a deliberate and robust strategy to address the challenges identified from the Global Competitiveness Index,” the Bank said. Regarding trade and investment facilitation, the Bank noted that investment incentive packages to foster competitiveness have serious shortcomings. The Bank said costs of production are high leading to an inability to compete in external markets Existence of companies that are too small to meet large export orders. As a result,the rate of economic growth is too low, and not labour intensive enough to create jobs. This is not helped by the fact that, “productivity is low, contributing to a lack of competitiveness. Education and training are misaligned to the job market, so that school leavers, trainees and graduates do not have the right skills and other attributes to readily find employment or other income-earning opportunities,” the Bank said.
The Bank also noted that; “The cost of labour is higher than the shadow wage rate, leading to unemployment” and that “Labour market information – on supply of and demand for labour – is not readily available.” Touching on Agriculture, the continental lender said the low coverage of cattle ear tagging hampering the control of animal diseases. The Bank said there is; “Frequent drought with climate change, affecting food security and agricultural output Occurrences of trans-boundary animal and crop pests and diseases” as well as “Lack of a controlled environment to increase the production of seasonal horticulture products.” It said when combined with the rising domestic population and beef consumption, the availability of beef for export is declining adding that there are minimal productivity improvements amongst both cattle farmers and food-grain producers, despite many years of government support programmes.
The Bank also took Botswana to task over: “Delayed commencement and progress in delivery of projects, mainly due to lengthy procurement processes, inadequate implementation capacity, weak contract enforcement and contractual disputes Corruption in tender awards.” and “Limited skills in implementation of the large-scale projects.” On the manufacturing sector, the Bank said it has remained small due to a lack of competitiveness and hence difficulties in accessing markets; inadequate capacity to meet demand in major markets; protectionist measures (non-tariff barriers) in neighbouring markets. It also faulted Botswana’s policies which made it difficult to access value chains, particularly in vertically integrated industries; and insufficient inflow of FDI (Foreign Direct Investment). The Bank also faulted Botswana for lack of skills within the Information and Communications Technology (ICT) sub-sector. It said the National ICT Policy of 2007 recommended the establishment of an Information Age Council to provide strategic guidance and oversight of ICT development in Botswana.
“To date, this has not been established. The frequent change of government leadership in the ICT sector development has contributed to uncoordinated delivery compounded by unclear roles and responsibilities for it,” the Bank said. It said the e-Government coordinating office delayed commencement and progress in delivery of projects mainly due to lengthy procurement processes, inadequate implementation capacity, weak contract enforcement and contractual disputes. “Inadequate funding for maintenance and implementation of ICT projects, especially in Ministries’ and Departments’ local area networks and the data centres,” the AFDB said.
It said high data transit costs (across neighbouring countries) are a major contributor to the high tariffs experienced in Botswana. AFDB also expressed concern at “Land shortage for expansion of mobile telephony sites, affecting coverage and quality. Prevalence in the market of illicit mobile or cellular phones not from original vendors which tend to have a negative effect on quality of service.” With regard to competitive human resources, the Bank said there is slow progress in implementing the National Credit and Qualifications Framework due limited capacity at the Botswana Qualifications Authority (BQA). “Misalignment between the BQA Act and those of professional bodies has resulted in professional bodies not recognising some BQA learning programmes,” AFDB said.
The Bank said there is inadequate data collection, and generation and analysis of indicators related to Research, Science, Technology and Innovation (RSTI) due to unstandardised institutional information management systems. It said there is limited understanding of many issues related to RSTI, including intellectual property management; science communication and engagement; and emerging technologies Inadequate research funding for research and innovation initiatives; and research collaborations that have the potential to build capacity for research and innovation.
