There is a false economic mantra which began more or less with the economic diversification drive circa 2008. During that period, we witnessed a concerted effort to turn basic economics of how nations prosper, on its head. Just because there was a new man at the helm, who by the way was replacing a trained economist in Festus Mogae, was seen by some policy makers as a perfect moment to disregard sound economic policy. With gay abandon, we were served a soup of voodoo economics.
All of a sudden, it was permissible for many including a cabinet ministers to be publicly wrong about conditions for economic growth and job creation. A hair brained idea of promoting local production by replacing imports gained currency. Not many pushed back because ostensibly, the man from the army who had now taken over as head of state was, truly or falsely, said to brook no dissent. Those who knew how economies worked, retreated and gave way to a small but influential coterie of people who peddled the narrative that growth could come from replacing imports with local products. They traded in euphemisms of Botswana being landlinked and not landlocked, whatever that means. Under this naïve economic thinking, all it takes to accelerate the rate of growth is to look at our imports and replace them with local production. What genius!
The trouble with an approach which rails against imports is that it ignores the reality that nations import goods all the time. Developed countries for example consume a lot of imported goods. Going by this logic therefore, developed countries should be worried and exploring ways of reducing imports. To our surprise however, that is not where they are expending their energies. Norway for example is not seized with reducing beef imports from Botswana. Neither is Great Britain. These countries are rather focused on producing goods and services for export.
An obsessive focus on imports, blinds you from appreciating that you have to import machinery and intermediate goods for manufacturing purposes. Moreover, modern manufacturing supply chains are sophisticated and involve moving goods across regions.
Sound economic policy is premised on the notion that Botswana’s continued prosperity lies in boosting export competitiveness given our small domestic market. This means that firms must to a large extent, be supported and encouraged to produce goods that sell not only at home but much more importantly, beyond our borders. To remain in business therefore, our firms have to expand their footprint in foreign markets by producing goods and services that foreign consumers are willing and able to buy. A key ingredient of achieving that goal is to ensure that goods and services from here are of exceptionally good quality and competitively priced. That is how you make it in export markets.
The same rigorous standards we speak so fondly of regarding our education sector, apply in equal measure when it comes to the production of goods and services by business. With respect to education for example, we take pride in the fact that we strive to make our education standards to be recognised internationally. We then use such high standards to attract international students to our shores. We also flaunt the education infrastructure – especially private schools – to reassure investors thinking of setting up in Botswana that their children would not be exposed to mediocre schools. This means that we understand that for us to export goods (and even services such as attracting foreign students), we have to raise and not lower standards.
Finally, consumers must be allowed have the right to spend their money on imports if they so choose, Thy must not be coerced to spend their hard earned on inferior local goods. Businesses which lobby for such polices cannot be described as entrepreneurs. An entrepreneur is a name given to one who provides consumers with their needs and wants at a price that the latter consumers is willing to take in a voluntary exchange.
