Thursday, August 6, 2020

No economic parity for natives unless we reduce the power of chain stores and those running them

Events of the last few weeks have totally exposed the emptiness, vanity and precarity of Botswana’s economic independence.

That no national leader with any weight or clout has been able to stand up and endorse the cause for which indigenous citizens are clamouring for should be instructive enough.

Batswana you are on your own!

President Mokgweetsi Masisi has just announced the CEDA guidelines. And that is most welcome.

Make no mistake, even at face value these guidelines look and sound overly generous. They go far and beyond expectations.

The guidelines will continue from exactly where the old ones left. In other words the announced guidelines essentially provide for more money. And money is important for starting or running any business.

That however does not make the guidelines a panacea, much less the end of the struggles of an indigenous Motswana businessman and woman.

The underlying structural disabilities that indigenous Batswana have always had to contend with will remain intact.

They might even intensify.

There is no how artificial and organized cartels will be removed by more money that CEDA plans to disburse.

As things stand, Government is most likely to feel like they have done their bit. In fact that was clearly inferred from the tone of the president when after completing his prepared notes he murmured something to the effect that Batswana now needed to stop complaining about Indians forthwith.

Relations are already fraught as we speak.

This paves the way for a deep schism between government and non-indigenous business on the one hand and the indigenous Batswana on the other.

Here is a short anecdote to illustrate my point.

Almost two years ago government decided to stop all imports of bottled water.

immediately following many young Batswana jumped to the opportunity to process and package bottled water.

For all of them the adventure has led to economic ruin.

They approached CEDA for machinery, many of them on the strength of a letter from chain stores like Choppies that they will sell the products through the retail giant that has close to hundred stores in Botswana alone.

By the time they delivered their first consignment of bottled water they found out that Choppies had no less than seven brands of its own already selling in its stores.

To make matters worse some of them had to buy bottles from Choppies who was by now not an enabler but a competitor.

A former senior government official was among those who had tried their luck at packaging bottled water. He too closed down.

Luckily for him he was appointed a High Commissioner. That will enable him to pay back CEDA.

Another government official had tried to open a chicken run competing against such brands like Nando’s, Chicken Licken’ and Hungry Lion. Before long the business went belly up.

He too has now been appointed Botswana’s Ambassador to a faraway foreign land after failing to break the wall of foreign monopoly.

We point these out to show that not only are these issues structural in nature but also that no indigenous Motswana is immune.

Batswana should not give up.

Money is an important part of the equation. But throwing money at the problem without addressing other matters in tandem cannot be the solution.

That is not all.

Chain stores like Choppies, Sefalana, Pick ‘n’ pay, Shoprite, Payless, Spar and others like them are intransigently refusing to go native in their key decisions.

Their benefits to indigenous consumers and producers trying to supply them are often exaggerated and embellished.

Their biggest crime is what has come to be known as anchor tenancy.

All these chain stores invariably always aim to become anchor tenants in all the shopping centres they occupy.

Anchor tenancy is a South African invention.

An anchor tenant is able to purchase and abrogate to themselves many monopolistic characteristics.

They effectively can determine who else can come in as a tenant. And what any potential tenant can trade in. They literally can forbid competition from trading anywhere close to their stores. And in Botswana they always do.

This power enjoyed by a few chain stores – none of them is controlled by an indigenous citizen is having a devastating effect on indigenous Batswana businesses. I fail to see how the new CEDA guidelines, important as they are will address these fundamentally flawed structural defects.

An indigenous businesswoman cannot set up next door and run their small bakery or fresh produce.

No butchery for example can set up in a shopping mall where Sefalana or Choppies are anchor tenants.

That is how these chain stores killed family owned stores across the country – undermining competition, but also employing and deploying unsavoury competition tactics.

Choppies by their own statistics control 62 percent of Botswana’s national fresh produce market.

They are directly involved in farming while also buying from indigenous suppliers who crucially have no chance of negotiating prices based on costs.

As with bottled water, any action by Botswana Government to close imports of fresh produce does not benefit the indigenous farmer, but a global player next door in Choppies and its farms.

Many of these chain stores own milling operations. From the beginning indigenous Batswana in their little worlds think they can negotiate meaningful prices for products from their mills. That to me is like burning the candle on both ends.

We cannot talk about poultry without talking about egg production.

Botswana’s biggest egg producer is Ram Ottupath – well-known Choppies Chief Executive and shareholder.

Is it in his interest to see growth of indigenous egg producers?

Will he give them a competitive price when they come to Choppies begging that they too be allowed to become suppliers of true worth?

Your guess is as good as mine.

In Botswana a lot depends on his grace and goodwill.

And like other chain store owners, his gets easy and undue credit for helping out indigenous Batswana.

Now, not for the first time Choppies promoters have their eyes set on acquiring a commercial bank license as their biggest target.

Given their unassailable political sway, it is unimaginable that anybody including at government enclave can stop them.

And some in government will unashamedly turn around and say the bank is indigenous.

Indigenous Batswana need to nonetheless continue with their struggle to wrestle control of their country from the jaws and clutches of these chain stores and chain store owners and those controlling them.

Given the above, on that struggle they are on their own.

They should not expect support from government. And the settler merchants will not give away their economic power and privilege without a fight.

These people have access to those in power. And they have over time refined the skills to manipulate those in power.

If it means it means going on a collision course with their own government, indigenous Batswana should stand firm on getting equitable market share for their businesses.

This will inevitably mean selectively boycotting those sectors they perceive as monopolies deliberately created to hinder growth of indigenous citizens. Indigenous Batswana can no longer participate in any efforts that render them a docile and helpless but ultimately shiftless market. They have the numbers. And they should use those numbers as a weapon to push their own interests.

On this war Batswana cannot rely on their government because it, like others before it has chosen to sail too close the settler merchants. We might continue to hope that one day light will dawn on them and get them a better handle of the situation. But that should remain their problem, not the people’s.

Yet there are glaring admissions that indigenous Batswana still have to make.

Chief of those is that all these merchants are here to stay.

They certainly will not be gone tomorrow.

As indigenous Batswana we need to make them feel welcome.

We need not chase them away.

But still we also need to be resolute in our demonstration to them and also to our government that going forward the settler merchants can only stay and trade under the terms acceptable to a majority. And that they will submit themselves to a principle of “live and let live”.

The choices facing young indigenous Batswana dreaming to go into business – many of them first generation aspirants are really grave.

To make light of these choices is literally play blind to life and death choices indigenous Batswana are forced to as part of going into businesses in Botswana.

Government has to accept that the economic imbalances against indigenous citizens are not only unsustainable but also an existential threat to the nation.

Lastly our political leaders need to demonstrably stop consorting with the settler merchants if they need to keep the trust of the majority.

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