We recently published a news article under the heading, ‘Gov’t begs foreign retailers to accept local goods’. In the story, we revealed how government was literally begging some foreign owned retailers to accept locally produced goods in their shops.
In the same story, Permanent Secretary in the Ministry of Trade and Industry, Peggy Serame confirmed that that some foreign owned retailers are still refusing to accept locally produced goods. This emerged after Member of Parliament for Selebi Phikwe West, Dithapelo Keorapetse, speaking at the Public Accounts Committee (PAC), accused government of not doing enough to promote local produce. He singled out CNA book stores and Musica music stores (both South African) as amongst retailers who still refuse to sell local products even though they are of international standards.
“CNA only started selling a few local periodicals after a recent parliamentary question. There are many other shops that have closed their doors to good quality products just because they were produced locally,” Keorapetse said.
In response, Serame admitted that government is aware of the trend and has been engaging such companies over the past two years. What emerged very clearly from the PAC was that Botswana does not have the necessary laws to compel foreign retailers, especially from South Africa and China to reinvest some of their proceeds in the local economy. Also, local products hardly get onto the shelves of these dominant retailers. This dreadful practice is said to be been done in the name of ‘open economy.’ There have been incessant calls for government to come up with a comprehensive law on citizen economic empowerment. Foreign owned companies have been accused of suffocating struggling locally owned businesses with their excessive funds and abundant resources.
It because of this ‘open economy’ craze that foreign companies have continued to milk money out of Botswana and export it to their home countries. As it is, major South African retailers such as Shoprite, Spar, Pep and Woolworths do not have to account for capital outflows from Botswana. These are the same retailers who pay their employees peanuts and line up ‘peanuts’ to finance their lacklustre social responsibility projects, taking advantage of the fact that there is no law on CSI.
This past Friday, South Africa’s premier business newspaper, BusinessDay ran an article that announced Woolworths’ ‘excitement’ over its black empowerment employee share scheme pay-out. This scheme was put in place for the retailer’s workers across the border, not in Botswana.
Under the multimillion-rand black empowerment employee share scheme pay-out, Woolworths says approximately 10 percent of its ordinary share capital will be allocated to previously disadvantaged employees, based on length of service and seniority. The strong performance of the business over the past eight years (which we strongly believe Botswana significantly contributed to) has created R2.4 billion for the participantsÔÇÜ who have also enjoyed dividends of at least R332 million during the life of the scheme. How come we haven’t heard of a similar arrangement for Batswana workers who make billions of Pula’s for Woolworths or any other foreign retailer?
Earlier this year, in this space we wrote about Samsung, an international company which also does trades in our shores. We pointed out then that Samsung and other private companies operating in Botswana should be reminded to focus on improving their reputation not only among investors through huge profits, but also among a wider group of stakeholders including the communities they are operating in. As part of its CSR in South Africa, PEP stores has to date opened more than ten academics within existing schools to help give close to 1,500 primary school learners the building blocks of education. On its website, the shop, which sometimes operates more than two shops in one mall in Botswana, says the academics were designed to make a positive difference on the lives of young South African people. Who can tell me what PEP has done here? Or we do not have young lives that need improvement in Botswana?
Perhaps is worth noting that it is not only South African companies which are at once reaping benefits and ripping off customers from this once diamond rich nation. It is no secret that giant international money transfer companies such as Western Union and MoneyGram are making huge profits here. For them it’s through excessive fees and hidden charges as well as foreign exchange margins which are not that transparent to consumers.
But then again, maybe instead of pointing fingers and blaming South African companies and other multinationals for our own mischief, local entrepreneurs should roll-up their sleeves and come up with a long-standing solution in the form of substitute products. The obvious suggestion would be establishment of local brand/s manufacturers and retailers who will compete against their foreign counterparts, consequently providing the consumer with a choice.
There is no doubt that Botswana has traditionally been a strong economic partner of South Africa. The foundation for this relationship dates back to the establishment of the world’s oldest trade union, the Southern African Customs Union (SACU) back in 1910. We do not in anyhow want SACU ruined, but at the same time we should not stop advocating for the economic advancement of our people. In dominating the debate over how to address the Greek crisis, Germany has shown that economic success brings ‘political influence’, which it wielded last weekend to brush away requests from France and Italy for a more lenient treatment of Greece.
Botswana should take a stand like that when it comes to dominance of economic players in both the domestic and regional economy. Going forward it should not be business as usual when we have foreigners eating a large chunk of the economic cake. The #Bottom-line though is that all the companies that operate here must build long-lasting CSI programmes that have tangible and measurable economic impact. We still retain hope that one day our government will see the need to revisit the ‘open market’ rule, which is not necessarily working for us at the moment.