Thursday, October 22, 2020

Khama’s ‘failing policies’ drives Botswana into slow growth rut

Lamenting the fact that Botswana’s is an “extremely undiversified economy” despite all the policies that the government has undertaken over the years, the Gaborone Bonnington South MP, Ndaba Gaolathe, has added a little-known, if deeply worrisome set of facts.

“Between 2008 and 2015, this situation has worsened. If you look at our traditional exports during this period between 2002/2015, you will have noted that their proportion in our total export base has grown to about 95 percent. You need to keep that in mind. We have to keep in mind that our economy has been unable to create jobs, let alone sustainable jobs, let alone high-paying jobs.

In fact, since 2009 until 2015, the increase in job creation has been a mere 1.5 percent,” Ndaba said in Parliament.

To some, the MP’s 2008-2015 timeframe will be seen as a direct indictment of the current administration because President Ian Khama was sworn into office on April 1, 2008. In fairness to Khama though, previous administrations have also been unable to significantly diversify the economy away from diamond mining. On its website, the Accra-based Africa Centre for Economic Transformation – whose figures Gaolathe quoted during his debate, says that Botswana’s “ambitious initiatives” to diversify its economy initiatives have yet to produce “sustainable, productive, and competitive” sectors that would ensure future growth. “(Botswana’s) transformation will demand not just creative and vigorous diversification, but also deeper partnerships with the private sector and stronger foundations for competitiveness, mostly in developing the skills and knowledge capabilities of the workforce,” the Centre says.

To Sunday Standard, Gaolathe noted that between 2008 and 2015, traditional exports (diamonds, mining and beef) grew from 90 percent to 95 percent as a share of exports. “This is despite numerous efforts starting in the 1970s such as the Industrial Development Policy, the Financial Assistance Policy, the Citizen Entrepreneurial Development Agency and the Economic Stimulus Programme,” he said.

One of the solutions the MP proposes is diversifying the economy through the manufacturing and the agricultural sectors. Drawing parallels with early-achieving Asian countries, Gaolathe said that these two sectors have to be “somewhere in the equation”.

“When you compare the early achievers – the Asian countries on average – they have been able to achieve a manufacturing base of plus-minus 35 percent. Countries like Botswana have not achieved anything larger than 6 percent or 7 percent in terms of the manufacturing base,” said Gaolathe, adding that the agricultural productivity of those Asian countries was far ahead of Botswana’s.

According to the figures that he quoted, Burkina Faso also does twice as better as Botswana in terms of agricultural productivity.

The Accra Centre scored Botswana 20th out of 21 countries on diversification in 2010, which represented a slight deterioration from the country’s 19th position in 2000. The country’s share of manufacturing in GDP stayed around 4 percent, the share of the top five exports dropped from 92 percent to 86 percent (which was an improvement), and the share of manufactures and services in exports fell from 24 percent to 18 percent.

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