The Botswana government has rightly embarked on private sector development policy to address the structural weaknesses of a mineral-dependent economy, but there have been problems with the institutional mechanisms of economic diversification policy governance.
This was said by Dr Charles Conteh, Brock University Professor of Public Policy and Administration, during his presentation on Friday at Botswana SMME conference.
Conteh’s presentation was on ‘Rethinking Botswana’s Economic Diversification Policy’.
His discussion focused on the nature of state-market partnership in Botswana, looking at the administrative capacity of the state in its employment of several institutional and policy mechanisms in engaging the market and implementing its goals of economic diversification.
“Participation in the equity promotion of new ventures in partnership, where appropriate, with foreign capital, is of significant importance,” said Conteh.
According to Conteh, the key challenge was to address the impediments created by structures and processes of program implementation. He stated that Botswana has steady economic growth, averaging more than eight percent per annum over the past 30 years and has been one of the fastest growing economies in the world between 1965 and 1998. He said Botswana demonstrated recognition of significance of a robust private sector in sustainable development.
He, however, said beneath the glossy macroeconomic indicators, Botswana has socio-economic inequality and persistent rural poverty at fifty-five percent of rural population. He also mentioned high ratio of public sector employment relative to the private sector as well as untapped reservoir of entrepreneurial talent in the informal sector.
Conteh cited Botswana Development Corporation as an example of economic diversification policy governance. He stated that BDC’s role of identification of business opportunities in industry, commerce and agriculture has made positive results. He said it has also been undertaking the related detailed feasibility studies and engagement with potential investors in specific projects.
“There is need for a greater focus on a more comprehensive economic diversification that encompasses more targeted institutional support for small, micro and medium-sized enterprises,” said Conteh.
He stated that one of the aspects of economic diversification challenge was the nature of the relationships between line ministries and economic development agencies, adding that there seemed to be too rigid a hierarchical relationship between certain ministries and their field agencies, so that they constrain the autonomy and managerial flexibility of the latter.
Conteh said that weak Inter-organizational coherence among economic development agencies is one of the issues affecting economic diversification.