Thursday, October 28, 2021

Botswana still needs a clear path to guide recovery efforts

First things first.

The road to economic recovery will be long, winded and hard.

There will be many casualties along the way.

And many of us will simply not make it.

But we must be resolute in our determination to make sure that as a country we make the best effort to recover from Covid-19 pandemic.

And that we give it our best shot.

First and foremost the economy means people, and without the people, it is hard to see what the economy will be.

Thus any recovery plans should have people at the center.

And success of such plans should as a matter of fact carry the people Recovery efforts should be a united effort between both government what remains of the private sector.

Many of our people went into the pandemic with huge disadvantages.

They will emerge from it with even bigger disadvantages.

These are unemployed people, the majority of who are young.

Under the circumstances there will be more women in it. And because the pandemic disproportionately hit the informal sector, it also means that these will be less educated people.

Recovery has to embrace the realism that if it is to mean anything it has to empower the majority of people.

And these are the people in the informal sector.

Let’s face it, Botswana will most certainly not see any tangible recover, much less that of pre-Covid levels unless the mining sector, especially diamond sales recover.

This will happen only to an extent that the government is willing to be transparent and play by clear rules.

So far there is no evidence much less clarity of what really government plans to do with the diamond sector.

The mining sector has dragged the entire economy down.

If it recovers, it will most certainly pull the economy up with itself.

That is an easy path to recovery for Botswana.

But it is unlikely to happen. And more tragically it is a kind of recovery that Botswana has less say and even lesser influence because it relies more on the international economy.

Botswana has a highly indebted population.

Most of the debt held by banks is retail, meaning that such debt basically has financed consumption.

Given that the country faces uncertain future of what will happen as the State of Emergency comes to an end, and mass retrenchments become ever more likely, the biggest risk remains to the financial sector.

The biggest and most efficient way to shield the sector from near total collapse is in fast-tracking the economic recovery so that mass retrenchments could be averted.

Botswana should fire up the most promising sectors that hold the biggest for more efficient economy recovery.

After diamonds over which it has the least influence, the country could concentrate on tourism.

Botswana’s tourism has been badly routed by Covid-19.

That notwithstanding, it still has the biggest potential.

Of course there are some things that still need to be done like putting infrastructure to some key destinations.

Such investments are long overdue.

They will be costly for a government that is fiscally still on a limb.

Still tourism can still be helped to start working towards getting back to full capacity.

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