Sunday, March 3, 2024

Reforms should happen faster than is currently the case

Botswana’s economic model is due for reforms.

That should happen chiefly by drafting an Industrial Policy that is rooted on exports.

If that is to be, productivity issues need to be addressed.

As are inputs costs that include labour, power, electricity and indeed communication and or transport.

Botswana has had enough of politics of patronage and cronyism.

It’s unlikely the country still has any stamina left to stomach any more of that.

There are however concerns by both citizens and foreigners that need to be addressed.

Foreigners accuse Batswana of subtle xenophobia.

Batswana for their part hit back, accusing foreigners of exclusionary entitlement.

The truth is somewhere in the middle.

Batswana have for years been treated like outsiders in the politics of their country’s economy.

Those seeking reasons behind the ruling party’s difficulties in getting traction on the back of its economic track record need not look any further than the key economic indicators.

Unemployment, especially among the youth is at its highest.

Productivity has been stubbornly low.

Retrenchments, especially by mining houses has led to unprecedented jobs hemorrhaging.

The future for many is really gloom.

That leaves the public in the clutches of populist narrative as that one of P3000 minimum wage.

The opposition has been rich in promises and short on details.

A tiny minority among economists take this seriously.

They see it as nothing short of voodoo economics.

Already trading on a budget deficit, Botswana’s room for budgetary maneuver is markedly limited.

To allay any fears, and also address ongoing doubts the opposition should convincingly deal with where the money will come from.

At least based on their promises there is a need for coherent economic programme to back their promises.

And that they should do rather quickly.

More to the point they should state their position on Government spending and taxes.

There is no way how that could be achieved other than showing an appreciation for the importance of a codified sustainable and long-term economic policy.

Mining, especially diamonds has always been an engine of growth. Now mining is the economy’s weakest link – still very lucrative, but very much a shadow of its past heights.

With the closure of BCL in Selibe Phikwe as well Tati in Francistown, copper mining has all but become non-existent in Botswana.

This has meant losing thousands in direct jobs, more thousands in contract employment and much more in those who rely on the mine – directly and indirectly.

There is no question that the economy is due for reforms.

The current Government needs to prove that it has learnt from past mistakes.

That will include making admissions that the economy needs to reform.

Those reforms will include making it more inclusive. And also allowing those left the past feeling that they too are a part of the country.

The balanced budget has for years been a driving policy for Botswana’s budgeting processes.

If the opposition are abandoning it then they should state so.

One thing is clear; political convenience should never be a substitute for economic policy.

As for the party in government, it is important that they address the borrowing threshold as provided for by the law.

With all indications pointing to a possible global recession in the horizon, it is important that there be a public debate on public borrowing as a function of the GDP.

We are of the view that the current ceiling vis-à-vis the GDP is too high.

The ceiling needs to be lowered to give more room to the country to be able to pay comfortably even during times of a crisis.


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