Botswana’s regional and global integration efforts are considered by the local think tank, economic firm Econsult Botswana, to be hindered by barriers that perhaps could be sabotaging the country’s attempts at diversification
“The fundamental approach must be outward looking, embracing global integration, vigorously promoting and supporting firms that export goods and services, attracting inward foreign investment, welcoming foreign firms and individuals who wish to invest in Botswana,” says Econsult Botswana in a recent review bulletin.
The paper points to Botswana’s membership and trade agreements in Southern African Customs Union (SACU), Southern African Development Community (SADC), ACP and the Cotonou and African Growth and Opportunity Act (AGOA).
It further mentions that putting in place a progressive and consistent trade policy will enable the country to achieve sustainable growth and global competitiveness. “It could be expected that with the potentials for an expanded market in the southern African region as envisaged by the SADC trade protocol, as well as for an expanded African export market to be occasioned by the NEPAD trade initiatives, ample opportunities exist for Botswana exporters that are able to compete with others in these markets,” cites the paper.
It highlights a significant outward investment that the government of Botswana made into De Beers in 2001 when it acquired a 15 percent stake, which as a result granted it representation in the Board of De Beers.
Despite the challenges facing the country in regional and global integration, solid efforts continue to be undertaken in terms of export development and foreign direct investment exercises by the Botswana Trade and Investment Centre (BITC). It seems, however, that the inward and outward policies are yet to offer the country competitive advantage in both attracting investment and to local exporters.
Economist and Associate Professor at the University of Botswana, Brothers Malema, challenges the current perceived view that Botswana has diversified its economy. He argues that the decrease in mining contribution to Gross Domestic Product (GDP) is not symbolic of diversification but is rather indicative of the declining trend of the mining sector over the years.
“If one sector is losing its significance in the economy, others will gain not necessarily on the basis of them growing, but on the basis of the other one getting smaller. I don’t think our economy is actually getting diversified.
Diversification would be when mining remains robust as it has been all along and the other sectors gain momentum at a rate faster than that of mining,” said Malema.