Monday, October 26, 2020

Special Economic Zones are still a pipe dream

In February 2011, our Cabinet approved the draft policy of the Special Economic Zones (SEZs) which was later delegated to the then Botswana Export Development and Investment Authority (BEDIA) (Now Botswana Investment and Trade Centre). 

BEDIA was declared the interim authoritative body to see the implementation of SEZ in the country. 

The proposed policy defines SEZs as geographically distinct economic areas with their own administrative authority for the provision of an investor-friendly business environment that will make our country the most preferred destination for both domestic and foreign investment. 

Amongst other things, the policy aims at diversifying the economic and export base of Botswana into sectors that will continue to grow even after diamonds have run out.

As we all might be aware, the development of the policy emanated from the recommendations of the Botswana Business and Economic Advisory Council of 2005.  Former Trade Minister Dorcus Malesu indicated a few years back that the development of the policy involved extensive stakeholder consultations in government, parastatals, the private sector and civil society, including labour organisations. 

Amongst key tasks given to the authority body (now BITC) is the administration of SEZ, specifically in terms of staffing, budget, spending and policymaking. To date the nation has not yet been updated on the implementation of this rather noble policy. 

The key question that remains to be answered is why do policy makers at BITC allow a policy which we were made to believe was cast within the context of domestic policies, strategies and legislation, to stay on the shelves for this long?

In some other countries policies and law, that governs SEZ have been used to identify various cities and large towns as gateways and hubs to lead development in their regions, with other towns, villages and rural areas characterised as having complementary roles. 

As it stands, we can all agree that in our country we already have potential economic hubs such as Maun  or Kasane (Tourism), Lobatse (Dairy and Transportation hub), Sowa (Glass and Salt production) to name a few. 

What is left for us or perhaps for BITC is to put in place a set of laws and regulations to govern the development and operations of SEZ and their enterprises across the country. 

Should this really take us more than five years? By the way, let no one be tempted to direct us to the “part” of the Finance Minister Kenneth Matambo’s budget speech where he talks about SEZ. It’s all the same, year in year out. 

While at it, BITC should be reminded that the policy should cover all legal requirements for the efficient and effective functioning of modern SEZ. This should be done to guard against any possible failure as seen in other countries. Policy makers at BITC and the Government Enclave need to learn a few things from what Mauritius did to succeed in transforming its sugar economy into a textile exporting economy in the 1980s and 1990s through SEZ. 

The country’s SEZs provided a tax-free and welcoming business environment for investors.  

As previously said on this space, policy makers at BITC and government enclave should be reminded that it will take much more than ceremonial, lavish talks, as well as exclusive interviews and live coverage by the state television to transform potential economic hubs such as Selebi Phikwe and Maun. 

We should also guard against the temptation to place such zones in isolated locations that have no commercial advantage to business. 

The #bottom-line, however, is that the establishment of economic hubs through SEZ has the potential to speed up decentralisation which in turn has the potential to expand our economy and could bring an end to the escalating unemployment figures as well as cutting down on the inequality gap.

RELATED STORIES

Read this week's paper

Financial Teamwork: Why it Matters in Marriage

“… and the two shall become one flesh”. You might be thinking to yourself that these words sound a bit all too...