Has Botswana given up on efforts to diversify the economy away from diamonds?
Are such efforts still worth it, anyway? In short are such goals still achievable?
Economic diversification used to be a top priority for Botswana government.
There was not a single speech that the late president QKJ Masire and after him Festus Mogae could finish without referring to economic diversification.
Botswana’s economy remains too small and poorly linked to the global theatre where everything is happening.
There used to be a time when there was sufficient cushion in the form of foreign reserves.
Those have ben depleting over time.
Compared to many countries, Botswana is still under borrowed, especially as a percentage of GDP.
This is significant because the threshold and the extent to which the country can borrow is well spelt out in law.
Botswana has expended a lot in efforts to diversify the economy.
There have been too many schemes, especially in the manufacturing sector aimed at diversification.
The financial sector too has been a target of such efforts.
Those efforts, though with not much to show for it have not come cheaply.
In fact it is unlikely that the country will be starting any such efforts again.
The latest and still ongoing is CEDA.
It is however not clear of its long term viability under the current climate and competing priorities.
The strategy was always to use proceeds from diamonds to diversify the economy.
That was at a time when the country was awash with cash.
That is no longer the case.
There is a serious dearth of cash in the economy.
Too many competing interests are today not being financed exactly because of that shortage.
Botswana has been a victim of its past success.
When there was a lot of cash, too many symbols were created that had no value to the economy.
The situation was worse on the parastatals.
Today the country is saddled with parastatals for which the country has no real use.
Surprisingly, government talks about closing these parastatals, but nothing moves on in that direction.
A failure to diversify the economy will have consequences.
Diamonds are not forever.
Even before they get depleted, there will come a time when it would no longer be viable to get diamonds from the ground.
Already there are those who say we are approaching that point because of increased costs and diminished returns of mining diamonds.
A Botswana without diamonds might become a failed state, or an economic wasteland at the very least.
What is already clear is that revenue from diamonds is no longer enough to sustain the country.
There are too many competing needs.
While needs have grown, the pie has not grown, at least not at the same speed and scale.
The public service too has become too big.
There was a time when growing the size and quality of the public service was a top priority.
That is no longer the case.
If anything the priority now is to reduce the size of the public service.
The money that goes to salaries every month has become a real burden.
Something has to be done.
Botswana’s economy is already flashing red.
Indigenous Batswana have been left out.
The economy is controlled by a few people with links to the ruling party.
The situation calls for more innovative economic thinking.
Sustainability will be paramount.
It is also important to highlight that not everyone should be a potential beneficiary of a new scheme.
The schemes should be more targeted.
