Tuesday, September 22, 2020

CEDA should be overhauled

It is five years since the government established the Citizen Entrepreneurial Development Agency (CEDA).

The Minister of Finance, Baledzi Gaolathe, under whose ministry the portfolio falls, has made an announcement to the effect that the government is currently reviewing CEDA.

That is a welcome move.

We should not wait until the fund loses its direction and then do its audit.

That was the case with other past schemes.

It would seem like we have leant lessons.

However, such a review should be fast-tracked if the Small Micro and Medium Enterprises (SMME) sector in Botswana is to timely graduate into meaningful corporations that would compete in the regional and international markets.

We want to point out that CEDA is just one of the many efforts by the government to help citizens enter businesses and stop being ?bemused players? as expatriates run the show and, along the process, take away all the loot.

The importance of Batswana being integrated into the management of the economy of their country does need to be emphasized.

The government of Botswana has to be credited with acknowledging such a fact, and by introducing a number of schemes over the years, albeit with mixed success rates, to achieve just that.

Unfortunately and apparently under the influence of their foreign advisors, the government seems to be developing cold feet towards the citizens? economic empowerment.

Even more worrying should be undertones of xenophobia leveled at deliberate policies that favour citizens when it comes to citizen economic empowerment.

Batswana should not shy away from demanding what is rightfully theirs.

The world over, citizens of respective countries are given preference over non citizens.

No country or government apologises for doing that.

In that regard, we urge the government in its review of CEDA as well as drafting of the citizen economic policy, to be forthright in its emphasis of a need to deliberately favour citizens over non citizens.

We also want to point out to non citizen investors who complain and whine about xenophobia that it is actually in their interest that citizens become meaningful players in the running of their economy.
Coming back to CEDA, we want to point out that while we await its review, there are a few points that, after a few years in existence, can be pointed out as its biggest handicaps.

The first such point is that CEDA can only lend up to P2 million.

That, by today?s business standards, is very low.
It condemns citizen companies to being eternal ?small man.?

CEDA Chairman, David Magang, succinctly put it recently when he told a group of members of parliament that Batswana are not able to go into large scale projects exactly because of this.
Because of such low capitalisation, citizen companies? ability to grow and enter the international market is limited.

It is very important that the review if CEDA takes into account the realities that Botswana has a very small market and that, if citizen companies based here are to be competitive, they have to be adequately capitalized as to have muscles strong enough to enable them to enter the world or, at the very least, the regional market.

The rules and regulations governing CEDA also have to be relaxed and made more generous.
Batswana employees working for foreign owned companies have to be allowed a window by CEDA to buy into such companies when the foreign owners exit the scene.

Also, at the moment, CEDA does not allow individuals to approach it, for example, to borrow P2 million each and pool together the money under one company so as to make it P10 million to achieve greater impact.

The ongoing review announced by the minister should consider that.

CEDA like, Magang said, should be flexible enough as to allow for the differentiation of loan conditions ?between sectors with dissimilar characteristics.?
At the moment, loan conditions for all sectors are the same.

That is not the best way to go.

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