In July 2020, the Botswana parliament passed the ERTP to boost economic recovery in the wake of the COVID -19 pandemic and, much more critically, place the economy on a durable path of transformation. ERTP recognised that before the outbreak of the COVID-19 pandemic, the economy was “already facing major economic challenges and hence the need for deep structural reforms ‘
In view of that, ERTP was conceived to work in tandem with both the Midterm review of NDP 11 and Vision 2036 to address growth constraints , chief among which were:
- “Declining economic (GDP) growth: over the five years from 2014 to 2019, annual growth averaged less than 3 percent, well below the 6 – 8 percent target, needed to raise real incomes and create sufficient employment opportunities;
• A deteriorating fiscal position, with a long-term, structural decline in fiscal revenues, regular budget deficits, and the depletion of fiscal and external buffers;
• An unsustainably high level of government spending, with insufficient efficiency in the delivery of public services;
• A proliferation of state-owned enterprises (SOEs), posing an increasing fiscal burden;
• The need to diversify exports, so as to reduce the very high level of dependence on diamonds and provide the basis for future balance of payments and exchange rate stability;
• Major uncertainties around the diamond industry, with the depletion of Botswana’s diamond deposits and rising production costs, competition from synthetic diamonds, and rapid changes in market dynamics;
• The persistence of high unemployment, slow job creation, high-income inequality, and the need for greater socio-economic inclusion; and • Lagging technological readiness”
In summary, therefore, ERTP is supposed to provide the impetus for economic recovery and transformation to high-income status through export-led growth. As already stated, some of the notable guiding principles of the ERTP are the acceleration of privatisation, reducing government ownership and control of institutions, ensuring that government spending crowds-in the private sector, lowering production costs, promotion of foreign direct investment, liberalisation of importation of foreign skills, citizen economic empowerment and ensuring that citizen economic empowerment activities do not deter foreign direct investment.
It is therefore somewhat of a mystery – at least to those of us outside the hallowed halls of Government Enclave- why the ERTP and the weighty issues that it seeks to address barely got a mention in the President’s State of the Nation address. One would have assumed that a parliament-approved policy document which lays building blocks for the transformation to a high income, would be one of the key things that the president takes stock of.
This is for the simple reason that it is one thing to talk about high income and quite another to get there . To attain high income takes the type of bold and daring reforms envisaged in the ERTP. The pursuit of high income starts not by mollycoddling ourselves but by acknowledging that Botswana’s domestic market is too small to support the requisite high growth rates. In other words, the economy cannot grow at 5.7 or 6 percent if it is closed out to the outside world and is based on selling to ourselves only. The fact of the matter is that we cannot anchor our growth plans by keeping out goods from other countries and still expect the world to import from us. I repeatedly hear us saying that our plan is to keep out imported fruit and vegetables so that somewhere down the line, we sell to the very same people whose fruit and vegetables we have banned. That is incoherent and unfortunately the world does not work that way. And as they say, we cannot have our cake and eat it.
Our plan for producing goods that people outside Botswana are willing and able to buy cannot be more urgent. It must be a regular feature of the State of the Nation.
