A recent report by the Bank of Botswana has highlighted the importance of infrastructure in the overall economic development.
According to the Bank, good infrastructure is an important variable towards improving productivity and competitiveness, among other things.
What should be of worry to most is the fact that while Botswana has over the years compared well when it comes to public infrastructure development, there is a downward trend, as succinctly captured by the Bank, which shows a decline, starting from 2007 to date.
This is excluding mobile telephony, which has barked the trend by being the only sector to show a significant improvement.
While the report is specifically about Botswana, it really could be extrapolated to apply to the whole of Africa.
As we have said before there is need for “infrastructure fund” that could compliment the efforts by Government(s).
There is evidence, now supported by this report that infrastructure does not only facilitate economic efficiency and competiveness, it also enhances job creation and above all stimulates the economy.
This infrastructure includes but is not limited to road transport and network, rail transport and air transport.
The report singles out low reach of rail transport as particularly disconcerting.
“The potential for rail transport as a driver for future development, including unlocking the value of mineral resources other than diamonds should not be underestimated.”
The report observes that lack of transport infrastructure to areas with economic potential compromise productivity improvements.
“Closely related to public infrastructure, it is also essential that regulations governing access to land are subject to critical review that recognizes the extent to which traditional /historical means of allocation are detrimental to economic efficiency and supply of residential , industrial and commercial property.”
In the same report, the Central Bank highlights concerns about high unemployment, which the Bank rightfully calls a “blight.”
This report by Bank of Botswana is significant not only by what it says, but more importantly by the truths it does not exactly touch on.
For far too long, there has been a myth etched upon policymakers that the country could just develop human capital, and survive on that.
It is clear from this report that while Human capital is important, equally important is infrastructure development.
Skilled labour is important. But it should never under any circumstance be at the expense of investing in infrastructure.
From the report it is clear that there will be no quick fix..
As a country we have to go through all the steps of the ladder.
And this time around it will not be easy because the cash that we used to have from diamonds is no longer there.
The report ends by pointing out the future is not much hopeful.
“Looking ahead, providing enough jobs will become more challenging in the context of modest rates of economic growth compared to the past…. Like many countries in Africa, the increase in the number of younger, better educated generations has the potential to become a “demographic dividend”: however, on current trends, this threatens to be a “demographic time bomb” if chronic youth unemployment is not addressed.”