The Ministry of Trade recently imposed restrictions on importation of pre-packed salt through the Control of Goods, Prices and other Charges Act and Trade Act. By June this year, government will initiate a moratorium on importation of less than 100 kg of packaged salt, a move aimed at stimulating domestic production and creating employment. SUNDAY STANDARD financial reporter VICTOR BAATWENG posed a few questions on the matter to Permanent Secretary in the Ministry of Trade Peggy Serame.
VB: What necessitated implementation of this instrument?
PS: In its quest to promote industrial development, the Ministry continuously puts in place sector-specific interventions to broaden sector and product base in the country. The decision is undertaken taking into consideration the available raw material locally and the need to develop the value chain of the sector. In this regard, the salt industry has been identified as a sub-sector with great potential for value addition. Sua Pan has the largest deposits of Soda Ash and Salt in Southern Africa, hence the need for more government support. There are local companies which are already engaged in packaging of both fine and coarse salt, but operating below capacity. This instrument will encourage them to expand production and increase their market share, both locally and externally. The growth of the salt industry will have a positive impact on other downstream activities. Further, Botswana has market access with other trading partners globally and this industry could benefit from such opportunities.
VB: If possible, furnish us with data on current production (domestic) of salt as compared to imported salt.
PS: According to data from Statistics Botswana, from 2008 to 2014, average imports of pre-packed salt stood at approximately 5, 100 tonnes annually. The local salt packaging companies’ current production level is around 8, 500 tonnes annually, more than the imports. However, at full capacity, a production capacity for local salt packagers is more than 10, 000 tonnes annually. It is clear that local salt packagers with their current production will be able to meet the local demand and export some of their produce.
VB: Implementation of these guidelines is expected to promote salt packaging locally, stimulate domestic production and attract Foreign Direct Investment, which would in turn create employment. Kindly elaborate on the specifics, being FDI attraction and stimulation of domestic production.
PS: There are numerous companies that are packaging salt and have invested substantially into their businesses. Some of these companies are ISO certified and are exporting their products, both fine and coarse salt. These companies are operating below capacity and have the potential to increase production and employ more people. These companies have shared their expansion plans with the Ministry. The Ministry and its agencies (Local Enterprise Authority (LEA), Botswana Bureau of Standards (BOBS), Botswana Investment and Trade Centre (BITC) and Citizen Entrepreneurial Development Authority CEDA), are currently engaging with these local companies to support them to improve their productive capacities.
VB: What measures have been put in place to ensure that implementation of the instrument is carried at the targeted date of 1st June 2015?
PS: The Ministry has held consultative meetings with the affected stakeholders, to check mainly their readiness when the implementation of the instrument comes into effect. There have also been visits to salt packaging companies, having one-on-one engagements with them. In its continued endeavour to support these companies, the Ministry has scheduled a workshop in March/April, 2015. The workshop will continue sensitisation about the instrument and allow salt packagers the opportunity to share with Ministry their expansion plans as well as any challenges pertaining to their production. This is being done in order to ensure their readiness when the instrument is implemented.