Saturday, December 3, 2022

The failing economy will prove to be Khama’s Achilles heel!

The reputation of President Ian Khama as a shrewd tactician and strategist par excellence will, in the next coming months, be put to the test.
While on the political front he is walking on water, with all opposition effectively dead, it is the economy that will chart his course as a politician.

With the global economy in a meltdown, it will be interesting to watch how this menacingly popular president will stave off what threatens to be Botswana’s worst fiscal deterioration since the country discovered diamonds in the late 1960s.

By all accounts, it seems likely that, given the approaching economic difficulties ÔÇô which, to be fair, are not of his making, President Khama may soon find himself marked down not as one of the most loved but instead as the most hated and despised president Botswana has ever had.

With the American economy in tatters, and everything about Botswana’s economic miracle now on the verge of a total collapse, the current President will soon be a man without the luxuries enjoyed by his predecessors.

Alone, the United States consumes over 50% of the world’s diamond produce.
And, as we know, Botswana is by far the world’s largest diamond producer by value.

What has always been good about Botswana’s economy is dissipating before our very eyes, thanks to the financial crisis sweeping across the world.

As we all know, nobody is buying Botswana diamonds any longer. And without diamonds what is there to drive the Botswana economy?

For almost 30 years now, it has become music to our ears to hear our government ministers hector their counterparts from other SADC countries about Botswana superior economic performance; wholly attributing that success to prudent economic housekeeping and visionary leadership.
This has, of course, allowed the ruling BDP to bask in a wholly undeserved reputation for being the greatest economic managers in all of Sub-Saharan Africa.

Characteristically, the BDP ministers have never taken kindly to alternative views that, contrary to popular opinion, Botswana’s success was greatly exaggerated; not much different from a house made from card boards.

For many decades the BDP produced election literature that crudely sought to distance the country’s success away from its mineral wealth ÔÇô vehemently arguing that such growth was a result of the party’s strong leadership.
Why have the same minerals caused so much poverty, chaos and anarchy to almost all the other countries so endowed? Our ministers have always asked almost in unison.

May be they have a point.
The decades old debate over whether Botswana’s success is a result of the country’s mineral wealth or the BDP policies will be settled once and for all in the next few months.

Without the traditional assistance from the drug-like diamonds that have for so long fuelled the boom years we will in the next few months get to see how the BDP policies alone will steer us through these difficult phase.
It’s not the nicest thing to say but the generation old claim by the BDP that their policies have been responsible for Botswana’s economic miracle will, in the next few months, be put to the test.

While the BDP-produced national policies have no doubt played a part, the truth of the matter is that minerals, most specifically diamonds, have been by far Botswana’s abiding glory, a boon that can only be underplayed by a ruling party all too eager to hoard all credit to itself.
Which is why it’s no exaggeration to predict that with the world economy, (most notably the United States’) now in tatters the end of Africa’s economic miracle, if we ever were one, is now in sight.

Truth be said, compared to other countries Botswana has used its consistently huge revenues from diamonds to better the lives of people.
By the same token such revenues have not only bankrolled public expenditure but also served to hide and camouflage some of the most glaring failures and shortcomings of the BDP.

Not long ago, parliament approved an unplanned P1 billion for the Ministry of Education, to be used to pay school fees for ghost students at some of the dubious tertiary institutions that have mushroomed in this country.

It’s difficult to see how, going forward, that would still be possible.
Not only will we have to tighten our belts, measures of survival will have to be put in place.

Since the early 1980s diamonds have fuelled Botswana’s booms, acting no less than a performance enhancing drug so much so that it has become virtually impossible to imagine how, as a people, we can, after relying so much on a near-addictive drug, now start learning to live without huge revenues from diamonds.

As with any other drug, the unpleasant side effects will in the next few months catch up with the patient.

The rub lies in how the present administration led by Ian Khama will mitigate those side effects.
Not an easy task for a country that did little to establish alternative streams of economic dynamism when opportunities were abound to do so!

While other economies successfully harnessed productivity as a key driver of economic growth, official statistics from the national productivity centre which, by the way, underplays the extent of the problem show that productivity levels in both the public and private sector are as low as can imaginably be ÔÇô a dismal record of a government that likes to brag about visionary leadership!

The depth of the economic crisis we are entering is almost entirely a function of BDP government’s failure to diversify the economy away from a terrifyingly deep reliance on diamonds.
Which is why I have always believed it to be irresponsibly disingenuous for the BDP spin doctors to insist Botswana’s success should be attributed more to the party’s policies and less to the mineral resources that have admittedly caused misery and human suffering elsewhere in the continent.
Memories are still fresh of how all our past leaders used to lecture us on how we owed everything to them.

What they deliberately chose not to say was that the economic miracle was a result not of their making but rather an accidental one delivered by consistently high diamond prices.
The reality is now upon us and the man at the helm will have to face the music ÔÇô rather sad given that he is a novice when it comes to these difficult economic issues.


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