The European Union (EU) has advised Botswana to work on a raft of measures in order for it to fully take advantage of the Economic Partnership Agreement (EPA) that was penned some few years back.
The country, which heavily relies on the mining sector, has been guaranteed unlimited markets access for its goods in Europe, but has not been able to use the gesture from world’s top market.
Head of European Delegation in Botswana and SADC, Paul Malin, said the country needs to build capacity, diversify its economy and move away from protectionism.
“The market is there. It is a matter of capacity. The biggest problem Botswana has is diversifying from beef and diamonds,” Malin said this week, ahead of his departure to Mozambique where he will resume new assignment.
There have been capacity concerns since the country and some of its peers in the SADC-EPA negotiating group initialled the agreement that scrapped most of the levies, including 8 percent that was charged on Botswana goods entering the EU.
But Botswana has mainly been exporting beef to the European market although the deal allows the country to sell other goods.
On the opposite, there are several European companies operating in the country across the financial services sector to diamond industry.
Malin has suggested for Botswana to be successful in reaching the EU market, it should look at the regional market first. This will also help in the regional integration as part of the SADC Free Trade Area (FTA).
“What Botswana needs is to export into the regional (SACU) market first and then the international markets (Europe),” advised Malin.
“The problem is getting the ability to trade. You can not only rely on the domestic economy and also have to be competitive.”
In a bid to improve capacity, Malin said the EU had previously worked with Botswana Confederation and Commerce Industry and Manpower (BOCCIM) and Botswana Exporters and Manufactures Association (BEMA).
The idea was to help them export with the help of Centre for the Development of Enterprise (CDE), another EU sponsored agency.
The other difficulty facing Botswana, Malin said, is that the country is a fairly protected market adding that a considerable shift needs to ‘take place’ in order to be more open.
The world largest rough diamond producer has also been faulted for not being an easy place to establish businesses with a regulatory environment that needed to be made cheaper.
“There are lots of things that need to be put right and Botswana is recognising that.”
The EPA, which will level the trading field between ACP countries and EU in line with WTO rules, is about to be concluded although other group members are still reluctant.
South Africa is the remaining stumbling block to the signing of full EPA as it makes it difficult to implement the new trade regime without the participation of Africa’s largest economy.
South Africa has had its own agreement with the EU under The Trade, Development and Co-operation Agreement (TDCA) and its argument was to protect its fledging manufacturing and BEE based companies.
Malin, however, said it seems Botswana’s neighbour will come on board.
“They have said so,” he said when asked if South Africa will be part of the agreement.
“There has been change of attitude from South Africa. The EU shows flexibility in areas that could benefit South Africa. The agreement is on sight,” he added.
Namibia, which has historical trade ties, is also suspicious of the EPA, but Malin hoped the problem the country has will be dealt with.