Botswana’s economic development journey has been an interesting one ÔÇô starting from being so poor that its recurrent budget was financed through donor funds to achieving a rapid growth and being able to sustain it for a long period. What is even more exceptional is the fact that the initiating source of growth was mineral wealth, a trend which fewer countries have been able to transform into economic growth.
“However how do we explain the absence of a Mining Department at the University of Botswana when Botswana is a mineral led economy, such as diamonds, copper, nickel, soda ash and so on? There is a wealth of resources still to be mined in this country yet we are not setting up the future generation to be at the centre of the activities.
This is the requirement for the next forty years said the Chairman of Pakalane Estates, David Magang,, at the Association of Chartered Certified Accountants (ACCA), annual gala dinner held at the Gaborone International Convention Centre (GICC) on Friday.
Magang also reveled that Citizen Entrepreneur Development Association (CEDA) is in need of urgent reforms, saying that “Not because the ideal for which it was formed is no more, but because the structure of the scheme is not aligned to the expectation of the targeted beneficiaries, who may unfortunately be accustomed to Government hand outs.”
He mentioned that the policy environment within which the scheme operates is not conducive to the realization of the program.
“The procurement policies of major institutions, including Government and its related quasi-government, are not geared to fostering citizen participation. There is a lack of coordination of efforts to transform financial assistance as an enabler to citizen participation through procurement,” said Marang.
He added that he was worried that there were voices that were calling for an almost total reversion to a grant scheme, adding that “This, I am afraid plays into the hands of those that believe Batswana cannot run businesses and are bad business managers.”
Conversantly Magang also added that the challenge is to accelerate the pace of economic change.
“We need to intensify efforts in diversifying the economy.
There is need for us to improve productivity levels to increase our competitiveness in the face of globalization. What sets countries apart is not only in the generation of new ideas but in the pace of implementation of these ideas as captured in policies,” Magang said.
He added that the surplus revenue from diamonds that could not be invested was saved -“the question to ask is whether this strategy has indeed worked,” he said.
“Are we content about our creativity as a nation and the level of development we have achieved after 40 years? My view is that we have kept the savings of this country to support public consumption. In other words, we have kept our resources to smooth out public expenditure,” he said.
Magang also added that initiatives like investing in assets other than cash has not been explored, saying “Other nations with wealth own streets in major centres of the world as part of their investment strategies. The benefit of which is to bequeath to a future generation of their nationals tangible assets.”
Moreover, Magang questioned how the government and Botswana Export Development and Interment Authority (BEDIA) could go around the world luring foreign investors and yet allow fund managers to invest in foreign capital.
“Rather than encouraging fund managers to invest offshore, we have to prevail upon them to participate in the physical development of this country and not just focus on quick and short term returns.”
He said that it was important o note that high investment rates and macroeconomic stability are necessary for a country to achieve sustained growth.
“The investment grade ratings for Botswana reflect the unusually low public debt and very strong liquidity which derive from a commitment to prudent fiscal and monetary policy,” saying that economic factors such as growth of money, trade balance, low foreign dept and fiscal balance help gauge a country’s financial stability and the government’s ability to manage its obligations.
According to Lipalisa Siwawa, the President of ACCA Botswana, the economy is currently not doing as well as it should. He, however, added that “Over the last 40 years we have seen our economy grow and develop to become one of the fastest growing in Africa.”
Siwawa cited that one of the challenges faced by the government at the time, was the development of a skilled labour force, amongst these a dire need for accounts.
She said that over the years, the accountancy profession has developed largely as a result of the establishment of the Botswana Accountancy College (BAC) ÔÇô “A partnership between government and private sector.”
However the effectiveness and success of this strategy, she said “assumes a continued commitment by all stakeholders.”