For an effective business culture to take root there has to be appropriate infrastructure in place to facilitate that business.
This infrastructure does not only pertain to roads, bridges and railways.
In today’s modern world telecommunications, especially in so far as it pertains to internet is just as important ÔÇô if not more important.
In its recent Global Competitiveness Report, a research by the World Economic Forum put Namibia at number 23 as the best in Africa when it came to roads infrastructure.
The report pointed out that roads infrastructure is one of the main catalysts for economic development.
Of the 120 countries surveyed only South Africa, Rwanda and Mauritius were the only African countries to appear on the top fifty.
Namibia did not go to the top of the African list by fluke.
The country has developed a very robust roads network of roads linking some of the continent’s most important trade markets to the sea ÔÇô whether you are talking about Zambia, Botswana, the Democratic republic of Congo or South Africa.
It might sound crude, but it is true that for most of African countries their infrastructure does not meet global standards, much less belong in the twenty first century world.
In the World economic Forum list cited above, Botswana is at number 62, which is by world standards not bad. But a lot can still be done.
Bad infrastructure has both the direct and indirect costs to the economy and business.
If infrastructure is inadequate or insufficient or if it stays for too long without being repaired, upgraded or even developed, its negative effects on both the economy and business become institutionalized and endemic.
Bad infrastructure undermines business and economic efficiencies, kills productivity and also stultifies economic and business dynamism and also repels people with skills and talent ÔÇô two attributes that are crucial for growth and survival of modern business.
Bad infrastructure tends to have a negative multiplier effect on the economy.
Good infrastructure on the other hand does not only reduce the costs of doing business it also facilitates and attracts new investors to come on board.
Developing infrastructure should not only be limited to cities and urban areas but should extend to rural areas, including especially to farms.
The reason why Botswana’s agriculture has lagged behind has to do with bad infrastructure, especially roads.
Internet for farmers is literally none existent.
This is notwithstanding proven importance for internet in today’s farming and supply chain.
As a result of such handicaps, farmers are not able to take their produce to the market on time and cost effectively.
The instinct by planners and other Government authorities is often to cut down expenditure on such primary infrastructure like roads, bridges and railways.
Reducing expenditure on infrastructure is hardly the best way to save money.
This is because other than saving, such reductions spiral out of control as they ultimately suffocate business which has to absorb them as part of the running costs; thus undermining economic growth.
As the new administration grapples with jump-starting the economy, infrastructure development should be among Government’s top priorities.
Investments in infrastructure will set the tone for decisions of prospective business investments.
For business, traffic clogged roads are just as bad as those with knee-deep potholes.
They raise input and operational costs while also undermining efficiency and productivity.
It is a truism that for businesses to grow they need access to finance.
But in the case of dilapidated infrastructure, the costs of finance inevitably rise, or even when subsidies are offered as is the case in Botswana, such subsidies end up being absorbed by resultant inefficiencies.
Once again, experience shows that before they choose where to settle, one of the derivatives that potential investors assess closely is the state of host country’s infrastructure.
If the infrastructure is in a state of disrepair or is non-existent, naturally potential investors price off the country as risky.
That renders attempts to develop the economy a vicious cycle that never sets off.
Botswana Government should work hard to escape this elephant trap.
