Saturday, December 9, 2023

Gov’t FDI inflow numbers keep on changing

The Botswana government which has made foreign direct investment (FDI) a centrepiece of its economic transformation has received several billions from outside but will not reveal the names of companies that have invested, further casting doubts about the actual FDI inflows against the limited presence of developments driven by new investments. 

On Tuesday in parliament, Karabo Gare, the assistant minister of Investment, Trade and Industry, confirmed that that during the financial year 2018/2019, the government through the Botswana Investment and Trade Centre (BITC), registered FDI inflows over P3.2 billion, of which P2.5 billion was generated through the financial services sector, but could not reveal where the financing was from and the target firms. 

“My ministry upholds the principle of client confidentiality and therefore, we are unable to share with the House the names of specific companies that invested,” said Gare. “However, 431 jobs were created out of this P3.2 billion worth of FDI.”

The confirmation from Gare was actually a contradiction to information shared by president Mokgweetsi Masisi during the State of the Nation Address (SONA) last year November. Though they got their story similar in that FDI inflows were P3.2 billion, the two men from Moshupa differed from the number of jobs created by these investments. 

In his address, Masisi said the cumulative FDI inflows created 3,981 jobs, a figure way removed from the 431 jobs that Gare said were created. The sheer amount of the supposed FDI inflows against the number of jobs created has been a subject of debate and concern, with observers querying the small number of jobs created given the huge investments. 

Further adding mystery to Botswana’s FDI figures has been small number of firms setting up in Botswana, and mostly have been mining companies which have gone public with its investments. There is increasing concern that the government might be inflating FDI inflows.

Whether you go with Masisi’s version of 3,981 jobs created or Gare’s 431 jobs, it appears that the cost of creating jobs is not only high but also inconsistent. In 2018, shortly after ascending to the presidency, Masisi in his maiden SONA said FDI inflows topped P1.1 billion during the 2017/2018 financial year. The president added that a further P2.92 billion was raised through domestic investment and expansions in the country, bringing total investments to P4 billion.  

The president said those investments resulted in additional 3,050 jobs, of which 2,008 jobs were created from FDI inflows and 1 142 from domestic investment and expansions. Now compare with what happens after: though the FDI fell from P4 billion to P3.2 billion 2018/2019, the number of jobs created rose to 3,981 jobs, a 30 percent increase. Unless of course Gare’s figures are correct and that the number of jobs created is 431, which then will also be a significant divergence. 

The variance between Masisi and Gare’s figures is not an unusual occurrence, with government’s official figures lately becoming distorted and confusing. Recently, Minister of Employment, Labour Productivity and Skills Development, Mpho Balopi, gave parliament a disputed figure of jobs lost from 2014 to 2018, of which some of the numbers were below what the government had officially stated.

The minister told parliament that 6,314 jobs were lost between 2014 and 2018 when 155 companies retrenched some workers. However, Balopi’s 6,314 job losses were quickly dismissed by legislators, who questioned the accuracy of the figures given past events in which massive job cuts were reported, and cited the closure of BCL mines in 2016, estimated to have shed over 6,000 jobs on its own. 

The minister, who is also the ruling party’s secretary general, tried to stick to his numbers and in the process exposed the inconsistencies of facts from the government, giving new figures about job losses at BCL that were lower than prior official government records.

“Actually, in 2016 alone, a total of 3,752 employees were retrenched as a result of closure of BCL and Tati Nickel and we are speaking of 6,000. As such, whether I trust my feedback or not, it is guided by the statistics in front of me,” he said. “If you know any other, I can go back and investigate as to whether there is an omission in as far as statistics are concerned, but currently this is the information I have.”

Balopi’s BCL numbers were grossly understated based on what government officials said two years earlier. The ministry of Mineral Resources, Green Technology and Energy Security officials in 2017 had put job losses at BCL at 5,486, in addition to another 838 from Tati Nickel mine, bringing total job losses from the mine closure to 6,324, a figure which was revealed to parliament by former cabinet minister Nonofo Molefhi.


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