Wednesday, October 4, 2023

MITI can do much better to ready Batswana for Africa Free Trade agreement

At the time of writing this commentary almost all the African states including our own – Botswana had signed up for the African Continental Free Trade Area (AfCFTA) agreement. The AfCFTA, launched in 2018 and now in its operational phase has an ultimate aim of establishing a single African market for goods and services, accompanied at a later stage by the free movement of people and capital. 

The deal is expected to, amongst other things stimulate intra-regional trade flows, address the continent’s industrial deficit, and reduce its over-reliance on primary goods exports.

A fully implemented AfCFTA, we have been told, will cover a market of more than 1.2 billion people with a combined gross domestic product of $2.5 trillion.  

In short, the AfCFTA presents opportunities for African countries including Botswana to grow economically through regional cooperation and integration as previously attempted through regional economic communities (RECs) such as the Common Market for Eastern and Southern Africa (Comesa), Economic Community of West African States (Ecowas) and our very own – Southern African Development Community (SADC).  

Now with all “good things” expected to come with AfCFTA, the question becomes what is in store for Batswana? Most importantly how ready are Batswana owned companies to start sending their products and services abroad? From distance, it appears that countries with larger manufacturing bases, such as our neighbour South Africa, Kenya and Egypt, are more likely to benefit “immediately” after the deal is actualised. Our country and other small nations such as Namibia on the other hand seems to be looking at the usual – beef and diamonds to sell. Our private sector continues to be narrow and shallow, characterised mainly by weak inter sectoral diversity and production links, and high dependency on public expenditure. This why it is important to pause and ask what is in store for Batswana with the hope that the answer will be in the form of capacity building for citizens owned companies.  The ministry tasked with development of citizen entrepreneurs – MITI should take this special task to capacitate Batswana on international trade, negotiations and anything international business related. My assumption is that we did not sign the AfCFTA to be spectators but rather be amongst the earliest beneficiaries out of it. 

The integration anticipated under the AfCFTA aims to unlock manufacturing potential and facilitate industrialisation in Africa and the deal has not said, “except for Botswana”. Given our level of industrialisation and most importantly our import bill, one can only say we need to do a lot of catching up if we are to compete with our fellow African citizens. In the past our spiraling import bill, especially on luxury products, was viewed as worrisome to the future of our foreign currency base. The problem is now bigger than that. Our worry now should be on capacitating the citizens of this country to be able to produce goods and services that can be sold to the rest of the country. We surely cannot ‘bet’ our participation on AfCFTA through the state owned Okavango Diamond Company and the ever ailing Botswana Meat Commission. We have to capacity citizen owned companies, more especially those that manufacture unique Botswana products to grow beyond supplying the local market and reaching out to the rest of Africa. 

The days in which we thought we could diversify and build a strong economy by relying on imports and subcontracting producers in other countries to produce for us when we can produce for ourselves and those countries are gone. Our number one mission, atleast we been made to believe, has been to build a more equal society through sustained inclusive growth. The AfCFTA agreement present Botswana with an opportunity to do exactly that by growing its market and potential clients to more than a billion people spread across the continent. 

The aspiration of AU’s “the future we want” and the Agenda 2063 for a just, prosperous and responsive world where everyone can enjoy their rights and live with dignity and hope can only be realized if African countries, including Botswana make conscious efforts to integrate trade and its populace. This is why we applaud Botswana for having found it fit to sign the AfCFTA. The signing will however be of no use if majority citizens of this country do not gain economically from it. The #Bottomline is that the need for industrialism and by extension diversification of the local economy has never been as pressing and as critical as it is today. The Africa Free Trade deal has come to give us an opportunity to grow into that space. We just need to develop and build capacity then we will be set to go. 

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