The decision announced at a Botswana Democratic Party Special Congress that Government will draw down a portion of the reserves saved at Bank of Botswana marks a significant policy departure in many ways.
The setting where the announcement was made is particularly ill-poised.
One does not expect such an important national decision to be made at a secluded party platform.
In that score, this important economic decision ÔÇô for all its merits or lack thereof – is already contaminated by its unashamedly partisan posture.
Another point of interest has to do with a role that Parliament will play. That hopefully will be clarified in the fullness of time.
But it was all in keeping with President Ian Khama’s modus operandi of wanting to be always the bearer of good news.
While Vice President Mokgweetsi Masisi last week hinted at the fact that something big was on the offing, nobody could have foretold the magnitude of the announcement made by President Khama over the weekend.
Least of all nobody could have foreseen a willingness on the part of Government to commit the reserves at Bank of Botswana in the scale that the President’s announcement has done.
To his credit President Khama has always resisted temptation to use the Bank of Botswana managed reserves, including when called to do so by his self- aggrandising inner circle.
Already there is a lot of predictable excitement among those who have endured the pain of what must often seemed like an endlessly subdued economy.
But, as they say, the devil is in the detail.
Critics on the other hand are already saying the burning of reserves is by no means a prudent economic decision.
They say the burning of reserves at this magnitude is an expedient political decision forced on a reluctant President Khama by strategists who are keen to buy political loyalty for the party from an increasingly despondent population that is beginning to question the Leader’s credibility.
That however is a debate for another day.
It is not immediately clear how much money Government intends to draw from the Bank of Botswana for the intended purposes.
More importantly, it is not immediately clear how far down that road the Government will be prepared to travel if intended results do not come around quickly.
While using the Reserves is likely to bring life back into the economy that is currently on a gridlock, such an instrument is also a high risk gamble.
Of importance is the fact that more than money, it is expenditure that has always presented bigger difficulties to those tasked with managing this economy.
Just what infrastructure has been put in place to make sure that the money drawn will be efficiently used? That is for now not clear.
Past history is however not encouraging.
Another risk is corruption.
The current Government is far more corrupt than all its predecessors put together.
It is not a wild estimate to surmise that less than half of the total money drawn from Bank of Botswana will eventually reach the intended projects.
A great amount of the money will be diverted and siphoned through official corruption that has now become institutionalized inside this government.
Even lower will be the benefits that will eventually trickle down into the mainstream economy.
Scary and insurmountable as that might seem, those problems are only half of the whole story.
An even bigger problem is that there seems to be ingrained reluctance in Government to accept the irrefutable reality that going forward the current low levels of economic growth will become the new normal.
What our Government wants to pass as temporary economic headwinds borne out by low receivables from diamond sales are not passing but are in fact here to stay unless deep economic reforms are implemented.
The days when Botswana’s economy would grow by 7 percent or even 9 percent on the back of diamond sales are gone ÔÇô for good. And it is important to accept 3 percent or lower as the dawn of a long drawn out new reality.
Also gone are days of budget surpluses.
Who in their right mind would believe that in the next four years or so diamond sales would recover to an extent that we could see the pre-recession growth levels restored? That is simply impossible.
What should have accompanied the President’s address to his party should have been an addendum sending home the painful truth that the current economic difficulties are not temporary ÔÇô notwithstanding the use of reserves.
The sooner we start preparing ourselves as a nation that these difficult economic times are with us for a long haul, the better it would be for us as a nation. It is a long game, and we should psychologically embrace that reality.
The intention is neither to sound gloomy nor spoil the party that the BDP is busy enjoying. Rather it is to highlight the hard choices that we face going forward. Reserves are good, but only when they last. But they are not infinite.
The long-overdue adjustments to our economy should be fast-tracked. Top of those reforms is no longer economic diversification, which we hastily acknowledge is important, but rather enhanced productivity.
As a policy reform, productivity can no longer be postponed any further.
It is irrefutable that the reserves were built so that they could be used as a buffer during the difficult economic times such as what we have today.
But still, it is important that proper structures are put in place so that we getter a better appreciation of the policy options that are open to us.
We certainly could do with a little bit of economic imagination.
