Saturday, October 24, 2020

It often feels like its Governor Linah Mohohlo who’s really in charge of this economy

A fairly reasonable case can very easily be made that the Ministry of Finance and Development Planning has lost the aura of invincibility it once had when it case to the inner government tussles for the control and ultimately management of the economy.

Politically speaking that role has been transferred to the Ministry of State President, which owing to its impotence and also illiteracy on economic issues does not know what to with that power other than make headless pronouncements, as it did with Economic Stimulus package, but which in the main are if not disastrous, then inconsequential.

In short, the short message of the long and winded message above is that our economy is on auto pilot.

The decline in the stature of the Ministry of Finance and Development Planning has seen an inverse rise in that of the Bank of Botswana.

The basic Act of Parliament establishing the Bank of Botswana makes it clear that the Bank shall be the economic advisor to Government.

More importantly, that act makes it clear, as a way of limiting the powers of the Bank that its primary mandate shall be on creating monetary policy stability.

Another law has given the fiscal authority to the Ministry of Finance.

But then to exercise that authority it is assumed that the ministry will be staffed with ambitious, imaginative and intellectually savvy officials and politicians, which unfortunately does not at the moment seem to be the case.

The upshot of the lethargy at the Ministry of Finance is that the Bank has quietly but very forcefully usurped what should be in law and indeed in practice be the mandate and turf of the ministry.

Thus we have an oversized Central Bank, whose importance far exceeds the size of the economy, not to mention the role for which it was by law created.

This fits and indeed sits well very with the Governor, Linah Mohohlo ÔÇô a strong and ambitions control freak with unbounded quest for power.

The intention of this commentary by the way is not to criticize the Governor, but rather to point out just  the many shortcomings by the Ministry of Finance and Development planning has played into the hands of the Governor, who seeing the vacuum has filled it with the natural instinct of a fish taking to water.

To be fair to Mohohlo she has built a very strong team of advisors around her who she has used in the process to build her own empire which now overshadows all other players involved in the country’s economic policy formulation and implementation.

The biggest strength of every leader is to understand their own personal shortcomings and work at attracting and training their advisors to complement the.

That is what Governor Mohohlo has done. She is a good leader because she knows and appreciates her personal limitations. She has used the stature of her office to train and attract a team of advisors to help her.

We do not see any evidence of that happening at the Ministry of Finance and Development today.

Thus we have a Ministry of Finance – in theory the principal benefactor of the Bank – literally operating at the mercy of the Central Bank.

This is unpardonable.

Not only is this a real risk to the economy and country, it also incentivizes the Central Bank to not only overreach itself on key decisions, but also to potentially become a rogue elephant, well aware that its power is not subjected to sufficient scrutiny of checks and balances as envisaged in law.

We cannot as a country live under a faith that the Central Bank officials will on their own do what is right for the country.

Yet the lapses by the Ministry of finances have put this country under exactly that kind of existential scenario.

There is no doubt that the State presidency has had a direct hand in establishing a cowed Ministry of Finance that we have today.

But the Ministry of Finance has had an even bigger contribution into this quagmire by failing to attract talent.

In the years gone by, the Ministry of Finance was hub of intellectual activity and probity, exceeding the whole of Government put together.

It was not a coincidence that the Ministry even seconded some of its best brains to other ministries to act not just as economic advisors but also as enforcers of the country’s developmental doctrines.

To further underscore the prestige of that Ministry, it was generally accepted to be a nursery for future heads of state.

Those days now seems to be gone, probably for ever.

The beneficiary of it all has been Governor Mohohlo who is now the undisputed Czar of the country’s economic path.

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