Tuesday, September 22, 2020

Political stability no longer enough to market the country

As the African continent, especially the SADC region, gets more competitive, it is high time Botswana changes its strategy in terms of doing business.

In many recent indices, it has become very clear that Botswana lags behind many of its competitors like Namibia, Mauritius and South Africa.

Over the years, we have flaunted our political stability as our key sales pitch.

There is no doubt that this has served us well.
There is also no doubt that if we are to move ahead with times we also have to change.

Political stability is no longer Botswana’s exclusive trait.
Many other countries, in fact, all the countries in the Sub-region have become politically stable.

Also it is clear that stability notwithstanding, investors of today are more than happy to even go to less stable areas if only they are assured of profits.

Angola, which is a late comer to political stability, has seen a surge in foreign investments even as a civil war was raging in most parts of that country.

In short, we think gone are the days when good governance and political stability were a major yardstick used by investors as they set out determining where to put their money.
As some experts put it, there should be a link between macro and micro economics.

In the past, Botswana had political stability and had a good currency rating, but still failed to attract investment to diversify the economy.
Why?

Let’s face it, circumstances have changed.
Botswana is no longer the best democracy in the region.
As much as we are nostalgic about our past, there are many questions lingering on the direction of the country.

These we have to address dispassionately so that we do not over-exaggerate our true rankings.
Who would have thought a few years ago that civil wars in Mozambique and Angola would one day come to an end as to make these to former Portuguese Colonies some of the most attractive destinations for foreign investments in Africa?

Not only has peace come to these countries, the governments therein have put in place some of the most investor friendly frameworks imaginable anywhere in Africa.

South Africa and Namibia that only democratized less than twenty years ago have made strides and are giving Botswana a good run for our money ÔÇô and we used to have lots of money.
In 2004, the World Bank, through its Foreign Investment Advisory Services (FIAS) report scolded Botswana for its poor investment climate.

The issues raised by the World Bank’s investment and research arm at the time were common bureaucratic issues that included difficulty in registering a company, the slow process of getting a license, tedious process to access land, work permits and high utility costs.

While Batswana were holding their breath and hoping that government was acting on the recommendations of the FIAS report, another report of a joint Investment Climate Assessment by Government of Botswana and the World Bank has cast doubts on the attainment of the 2016 vision and the attainment of the level of high income status.

Although Botswana government has acted on a number of recommendations of FIAS, some say reforms still remain a myth as there are still long queues at the Registrar of Companies, which shows that it still takes someone two weeks or more to register a company.

The Investment Climate Assessment is bringing a new picture to the scene that cast doubts on the competitive edge of the country amongst its peers.
Two key issues highlighted by the report are skills shortages and labour productivity as the most worrisome of challenges Botswana needs to overcome.
As reported somewhere in this newspaper, 60% of firms in South Africa, as in Mauritius, have been recorded as offering training to their employees.

It is also disturbing that the issue of land is resurfacing in this new survey compared to other middle income countries.

We hope Government departments and ministries find a better way to work together and address concerns as raised by the investment community.

It should be acknowledged that doing and forming a business in Botswana does not only stop with the Registrar of Companies, but a chain of other government departments as one government official has in the past put it. In that respect a one-stop shop housing all offices should be considered.

There should be a synergy amongst government departments and parastatals including Registrar of Companies, Ministry of Lands and Housing, Botswana Export Development and Investment Authority (BEDIA) amongst others.

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The Telegraph September 23

Digital edition of The Telegraph, September 23, 2020.