For some time now it has been clear that Francistown, the country’s second biggest city was being hit by powerful economic gale winds.
The economic re-birth of Francistown over the last decades was spurred by a number of mines that sprung around the city.
The existence of deposits in these mines, be they coal, copper, nickel or gold had always been known for a long time.
But during that time exploiting these deposits was simply not viable, economically. But with the growth of demand in China and India ÔÇô and also a rise in international commodity prices during that time, it all of a sudden became viable to mine those deposits.
Inevitably, China is going through economic headwinds. Nobody knows for sure if the country can recover much less continue the kind of growth it has registered over the last 20 years.
Sluggish demand in China has seen commodity prices collapse to unsustainably low levels. That is biting the producers.
Revival of Francistown was very much on the back of mining.
Those have included gold, copper and nickel.
And they very much were riding the China wave.
And now everything seems to be going down.
Francistown is not the only mining urban area that is in economic trouble.
All indications are that for now, the BCL mine in Selibe Phikwe is also a casualty of the storm that has for some time been brewing across the Pacific in China.
We should be worried for Selibe Phikwe because the revival of Selibe Phikwe was very much linked to the growing fortunes of BCL, especially the company’s growing balance sheet that had allowed it to undertake an ambitious diversification programme through a spate of high level acquisitions, including outside Botswana.
While Selibe Phikwe’s future is once again in doubt, it really should be Francistown that we should be more worried about.
And this has got less to do with the hiving off of the flagship Tati Nickel flagship mine by Russian owners as has to do with the general collapse of international commodity prices.
Ordinary citizens are already feeling the pinch as the mines have started in varying degrees the processes of down-sizing.
Unemployment ranks are again swelling.
Commodity prices are unlikely to improve until demand, driven by China improves again.
In the meantime some of our urban areas whose liveliness were linked to China are slowly becoming shadows of themselves.
Francistown is one such place. Houses that were only a few years ago in high demand are now going empty as employment levels have plummeted, thereby diminishing not just demand but also their affordability.
Government has just recently announced an economic stimulus package.
But in the absence of clear parameters, including a National development Plan (which has been deferred) it is difficult to meaningfully see how such a package can be used to save Francistown from a possible economic extinction.
One way of doing that is to use the stimulus package to diversify the Francistown City’s economic base by growing such areas like manufacturing and services that have for long been overshadowed by mining.
