Sunday, November 27, 2022

Economic crisis: Deputy Governor bets on digitalisation

As Botswana’s tailwind of favourable economic demography wane, it is becoming clear that digitalisation should play a critical role in its economic jumpstarting.

Infact, a high ranking official at the central bank agrees that there is need to speed up digitalization and adaptation as part of the efforts to address Botswana’s perennial challenges of undiversified and narrow economic base, decline in exports as a proportion of the Gross Domestic Product (GDP), low total factor productivity, high levels of unemployment and income inequality.

When addressing a Business Forum hosted by Business Botswana last week in Francistown, Bank of Botswana deputy governor – Kealeboga Masalila said that a big shift and reset needs to happen, in productivity and mindset.

“This involves adaptation of digital processes and functionalities,” he said.

Masalila said digitalization is a manifestation of the fourth industrial revolution which engenders leaps and exponential changes in the conduct of economic activity, industrialization and socialization. He also said digitalization potentially enhances productivity and economic inclusion. Masalila however said to be impactful at national level, digitalization requires preparedness and adaptation.

“I wish to anchor on one aspect of mindset shift or orientation and therefore focus on policy implementation, entrepreneurship and business bias. This relates to buy-in into the export led development strategy. This is for the simple reason that it is only through exports that we can gamer a sufficient market and in turn local production can support economic diversification, increase employment, broad base economic inclusion and therefore economic growth rates sufficient to transition to high income status by 2036,” he said

He said it is important to note that the export market involves not just ultimate consumer products, but inputs to global production and value chains. He also added that the export market has an inherent attribute of raising productivity and quality standards as well as competitive customer service imperatives. Among other important issues Masalila said there are opportunities in harnessing Information and Communication Technology (ICT) to accelerate the digital economy. He said research and comparative studies shows that detractors to total factor productivity for Botswana include inadequate, less functional and reliable infrastructure, mismatch of domestic financing to productive economic activity.

“There is insufficient quantum and pace of innovation, research and development effort that lags the necessary relativities to dovetail into and integrate with the requisite industrialization effort,” he said.

He however said to improve in that regard; there is need of enablers that include adequacy of infrastructure, connectivity and bandwidth across the country which links well globally. He also said there is need for reliable electricity supply. He further said the other enabler is facilitative policies, regulation and implementation capacity by government institutions and private sector service providers.

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