I was here in April this year to brief you about the Roadmap to Poverty Eradication, following the 2009 Inaugural Address by His Excellency, the President on the policy shift from poverty alleviation to eradication.
Today, I would like to take you through Economic Diversification Drive, an initiative by Government to eradicate poverty and create wealth for our people.
As you are aware, economic diversification has remained high on Government’s agenda, mainly because it is key to sustainable economic growth, sustainable development and partnership with a vibrant and globally competitive Private sector.
In view of this, Government has started a new initiative called the Economic Diversification Drive (EDD), as part of its relentless efforts to diversify the economy.
The Economic Diversification Drive is premised on the fact that the country has a huge purchasing power averaging P20 billion per annum.
In this regard, a Technical Committee, chaired by the Minister of Trade and Industry, Honourable Dorcas Makgato-Malesu, has been established to oversee the implementation of EDD.
This committee reports on a monthly basis to the Cabinet Committee on the Economy and Employment (CCEE), which l have the honour to chair.
The Economic Diversification Drive has two components, the short term strategy and the medium to long term strategy.
The short term strategy focuses on the interventions that promote targeted domestic production and consumption, by leveraging the country’s purchasing power to enhance participation of local enterprises in the economy.
I wish to inform you that the implementation of this component started in April this year.
The core elements of the short term strategy being implemented are: Promotion of local procurement through preference margins based on turnover threshold. These are categorized by company size as follows:
Small companies with a threshold of up to P5 million with a preference margin of 15%,
Medium ones with a threshold of between P5 million and just under P20 million with a preference margin of 10% and
Large ones with a threshold of P20 million and above at 5%.
This categorization will allow locally based SMMEs to have a higher advantage of price differentiation when tendering with larger companies, with price preference margins as indicated above.
The thrust of the Economic Diversification Drive is to develop private sector’s productive capacity as well as to create employment in Botswana.
To this end, Government will not accept non-compliance with principles and intended purposes of this strategy.
Bagaetsho,
Tough measures will be taken against companies which would have been awarded tenders to manufacture products locally, but instead import them.
These companies will be blacklisted from subsequent tenders.
To achieve this, Government will ensure that the PPADB Delisting Guidelines and Procedures are effectively implemented. A Suppliers’ Directory is being compiled with the assistance of BOCCIM, while concurrently, the Ministry of Trade and Industry is registering companies for the Economic Diversification Drive Certification, which is part of the tendering eligibility criteria.
Business Service Providers such as the Local Enterprise Authority the Botswana Bureau of Standards, the Botswana National Productivity Centre, the Botswana Technology Centre, the National Food Technology Centre, the Botswana Export Development and Investment Authority, the Botswana Confederation of Commerce Industry and Manpower and the Botswana Exporters and Manufacturers Association are working together to undertake an enterprise audit, with a view to addressing capacity development.
In addition, this will assist local enterprises to improve their productive capacities and build world class companies which can fully service the local market as well as take advantage of the lucrative export markets, which are being continuously negotiated.
Government has developed a long term strategy which is to be the subject of discussion at a Pitso on Economic Diversification Drive to be held in Gaborone on November 01-02, 2010.
This strategy will build productive capacity and develop competitiveness, which will enable Botswana to participate effectively in the international economy on the basis of quality goods and services, enviable and productive labour force, technological innovation and adaptation, as well as the development of business linkages between small, medium and micro enterprises (SMMEs) and large companies.
Bagaetsho,
To achieve this mammoth task, there is need for a mindset change to enable us to work collaboratively and harmoniously to attain the set goals.
I therefore appeal to all our friends in the Media to focus and intensify advocacy on this strategy as one of the major issues of national importance.
As a leader, I wish to encourage Batswana to seize this opportunity to build a better future for all.
I would like to implore Batswana to take advantage of all government programmes in place such as Integrated Support Programme for Arable Agriculture Development (ISPAAD) and Livestock Management and Infrastructure Development (LIMID), among others, to contribute towards the prosperity of our nation.
Let us all work together to ensure the success of the Flagship Programmes of Poverty Eradication and Economic Diversification Drive, and take Botswana towards High Income Status within 10 years.
It is my fervent hope that these flagship programmes will, in no small measure, assist in providing strategic direction in enterprise development, economic diversification and growth.
Lastly, I am pleased to inform you about the launch of Pitso Ya Nyeletso Lehuma in Mahalapye on October 28-29, 2010.
I thank you for the courtesy of your attention.
OCTOBER 25, 2010
