The budgetary review by First National Bank Botswana presented a number of significant issues regarding the economy and one of the questions raised, decades later, was if the manufacturing sector in Botswana should still be pursued particularly in the absence of economies of scale.
The answer to this question was given by Botswana Manufacturers and Exporters Association (BEMA) president Nkosi Mwaba in response to the 2017/18 budget with the message that the struggle of the sector is not in the absence of economies of scale that but in the insufficiency of a catalyst in terms of a supportive business environment.
“Meaningful growth in the manufacturing sector, particularly in a country with a relatively small population, can be achieved through export-led trade. It is therefore critical that the government takes a deliberate stance to elevate its support and invest considerable resources in the manufacturing sector,” said Mwaba.
What Mwaba expects government to do, which he said would need a significant input financially is to provide export incentives to local firms that are export ready; open strategic commercial entry points 24 hours a day to improve cross-border efficiencies because competitors such as Lesotho already have that 12-hour trade advantage over Botswana; acceleration of Education and Training Sector Strategic Plan (ETSSP) to improve the quality of vocational education and training programmes to counter the big skills challenge in the sector to mention but a few.
From the budget, however, it does not seem that vocational training has been given priority as the significant amount of importance has rather been given to degree-related fields of study.
Mwaba argued that the lack of attention on vocational skills is a grave drawback to small and medium enterprises. It could on the basis that government focusses on white collar jobs.
The potential of the manufacturing sector, according to Mwaba, could bring about a catharsis to the current extreme lack of jobs.
Mwaba pointed out that the budget revealed an issue that could stand in the way; the review of various taxes.
“We are however skeptical of the interpretation of paragraph 28, especially the last two sentences where the government is ‘considering the proposals by the Tax Review Committee of how to diversify the government revenue base. These proposals include; adjusting various taxes, levies, permits and licences and reviewing some tax expenditures such as VAT exemptions.
“We hope, as it is our sincere expectations, that government will engage the private sector in ‘considering’ these proposals to guard against hampering the spirit of ‘private sector led growth’ and of course reversing the gains already realised thus far,” he said.
He acknowledged the existing good working relationship BEMA had with government and hoped for it to serve as a basis for engaging further to take the economy forward.
“We eagerly wait with a huge anxiety for government to quickly engage us, as partners to meaningfully deliver on what we believe is a good framework for economic development as presented in the 2017 budget speech,” he said.