Monday, December 11, 2023

In Botswana, foreigners are kings

One thing you need to know about government tenders worth billions of Pula is that a majority of them continue to roll on the foreigner’s high-way. While this has been an open secret for quite some time, figures covering a five years period that runs from 2017 – 2021 shows that the situation is not getting any better. When it comes to wealth accumulation foreigners and their companies are still kings.

Fresh information shared in Parliament this past week shows that atleast 75 percent of the money drawn from the country’s Development Fund went to foreign companies while twenty two percent of the money ended on the pockets of the locals. The remaining three percent was shared between locals and foreigner who owns joint ventures.

In terms of the country’s Public Finance Management Act, development projects are funded from the Development Fund, which is a separate account not forming part of the Consolidated Fund. Minister responsible for allocation of public funds – Peggy Serame told Parliament this past week that the Development Fund is funded through funds appropriated by Parliament from the Consolidated Fund and/or proceeds from loans and grants.

“Proceeds from loan disbursements and development grants received from Development Partners are deposited directly into the Development Fund and pooled together with funds appropriated from the Consolidated Fund”, said Serame.

The five years period (2017-2021) figures as shared by Serame shows that a total of P3.6 billion was drawn from the Development Fund with P2.7 billion finding its way out of Botswana borders while P106 million and P784 million went was shared between joint ventures and local companies respectively.

The data was shared in Parliament follows a series of questions asked by Selebi Phikwe West MP – Dithapelo Keorapetse who demanded answers on the disparity that exists between Batswana and foreign companies operating in the country.

“The minister and her government are clearly prisoners of bad economic laws and policies and think there is nothing they can do about it. After 55 years of independence, 22 percent paid to Batswana and more than 80 percent going to foreigners is a kick on the teeth and spat on the face”, said Keorapetse.

Keorapetse said that the minister does not even have information on which company has repatriated what amount outside the country.

While a chunk of the money has been leaving Botswana’s borders following the awarding of billion worth tenders, it appears the skills transfer has also not been at a desired speed.
A labour market data published by Statistics Botswana in 2020 shed some light on the country’s working class, revealing that majority of workers are untrained, hold low level jobs, while over 70 percent of the country’s workers earn less than P10,000.

Botswana’s salaries disparities first came to picture some 15 years ago when a study commissioned by the then Ministry of Finance and Development Planning uncovered a pattern of bias in favour of foreigners in appointments to top management positions, salary payments and the award of government tenders.

The “Consultancy on the development of a comprehensive citizen economic empowerment strategy” by Tsa Badiri Consultancy, in collaboration with New Gx Capital of South Africa, turned up facts and figures showing that Botswana’s economic playing field is tilted against Batswana in favour of non-citizens. Although the report states that through its procurement strategies, government has the capacity to influence as much as 80 percent of economic activity, an analysis of companies awarded tenders by government through the PPADB shows that citizen owned companies got only 17 percent of the P1, 085 billion worth of government business between 2004 and 2006.

At the time, a survey of local companies and corporations showed that 53 percent of the top level- General Manager, CEO Managing Director positions – were held by non-citizens. The study further turned up information that the average basic pay of expatriates holding top management positions is 82 percent higher than that of Batswana holding similar positions.

All this has over the years resulted in Botswana recording a higher GDP while its Gross National Product figures have not been impressive. The conventional wisdom is that GNP is the proper measure of living standards, because domestic citizens do not have claims on the profits of foreign multinationals.


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