Wednesday, October 20, 2021

Botswana needs to do business differently – Econsult

The hackneyed prod to “revolutionise” the local business environment remains to this day a topic of discussion and it is time we asked why? 

This question is especially relevant because of the contrast in the effort taken to address the issue and the resultant change. The two seem, as indicated in the latest economic review for the first quarter of 2017 by the local economic think tank Econsult, to depict opposite direction from each other. 

In the review Econsult discusses at length the issues surrounding business environment reformation and also makes suggestions on what the priorities should be to put the overhaul in full swing.     

“Botswana is in need of similarly dramatic reform, based on opening up the economy, deregulation, and streamlining administrative procedures relating to all aspects of doing business in Botswana, for both citizens and foreigners,” says the review. 

The starting point of the discussion is the limited change seen in growth indicators. For example, it cites that the real growth rate of the non-mining private sector has been falling steadily, from 10 percent in 2011 to 1.4 percent in 2015, before recovering somewhat in 2016. 

A similar decline in observed in foreign direct investment which in 2014/15 the FDI inflows are said to have amounted to some 3 percent of GDP compared to around 6 percent in the early 2000s. 

Business confidence is also reported to be low showing signs of a lack of recovery following the 2008/09 economic crunch. 

These challenges, says the review, are compounded by the perceived low confidence of the private sector in government regarding its understanding to the needs of the business community. 

The second point was that four years ago a set of wide-ranging reforms were approved by Cabinet but described their implementation as “glacial”. 

The examples given include the “one government” principle in which state bodies should not require applicants/clients to produce documents that are issued by another government agency; automating government processes through the E-government tool and abolishing trade and general licensing requirements with the exception to health and safety practices.  

The review laments that “although Cabinet agreed the reforms noted above, there was no mechanism in place for ensuring that the timelines were adhered to, nor for holding key institutions and individuals accountable for doing so.” 

The third issue of immigration, work permits and visas which is currently a hotly contested matter particularly for acting as a hindrance to the flow of private capital into the country as investors are commonly turned away due to its hostility. 

This is closely related to the perception that Botswana is closed for business which defeats the local investment agency, Botswana Investment and Trade Centre (BITC)’s one stop shop which was set up to improve the ease of investment into the country. 

The review further makes a comparison of Botswana with Mauritius and Rwanda which it highlights are milestones away from Botswana’s state of affairs. 

The review then makes recommendations which it terms “game changing” reforms. These include  reform of immigration regulations for foreign investors and workers; reducing the range of reserved economic activities from which foreign investors are excluded; liberalising land and property ownership regulations for foreign investors and Reducing the scope of environmental impact assessments for developments in non-sensitive areas to mention but a few. 

“Wide-ranging reform should ideally be done through a comprehensive Business Environment Reform Act, similar to Mauritius’ Business Facilitation Act, which introduces wide-ranging changes and improvements to the business environment,” advises the review. 

As far as reformation to the local business environment is concerned, the status quo depicts a stubbornness which one might say only a child can portray. 

Numerous reports by different economic commentators and institutions have written extensively on the issue. The business community traditionally follows the presentation of the annual national budget with observations and recommendations on the matter. 

The media has reserved a significant amount of space on its publishing platforms providing information on the same. Conversations across the different public spaces have been sparked on the subject. 

It also makes a regular mention at Parliament. It is safe to say that the topic has not one place where it has not been discoursed whether formally or not. Not even the demonstration effects in countries commonly compared to Botswana especially in various quantitative indicators regarding the state of the business environment has spurred the country to earnestly follow suit. 

One wonders that if the issue carries such importance then how could it still appear like an afterthought? 

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