Sunday, May 28, 2023

There is still no alternative to Citizen economic empowerment

The ruling Botswana Democratic Party has adopted as its strap line: “There is still no alternative to the BDP”.
It is a nice and catchy line.
To paraphrase the BDP’s line, we want to say: “There is still no alternative to citizen economic empowerment.”

We should never lose steam over the citizen empowerment debate.
Someone once remarked that if Botswana had a broad-based citizen empowerment policy, the country would have millionaires overnight, looking at the small population of less than two million people.

The comments were assuming that if properly empowered, Batswana can create wealth for themselves and not become spectators in a country whose wealth is in the hands of a few and, mostly, non citizens.

Over the years, Government has come up with a number of initiatives aimed at empowering Batswana. Sadly, these initiatives have failed owing to, among others, a lack of supportive legislation.

An example of such policies, for instance, is government’s imitative to place an embargo on vegetable produce. The idea was to give ‘local’ farmers an advantage by making sure that they produce more, through ‘The Use of Locally Manufactured Goods and Services’ of 2004.

Botswana has the potential to empower citizens, especially since it is the world’s largest producer of raw gem diamond, a big tourism player and is in the process of privatising entities. Ideally, when government divests from state-owned companies, it is citizens who assume control of them and become millionaires.

However, this is not the case in Botswana, as evidenced by the botched sale of the national airliner to SA Airlink. Batswana should own privatised Air Botswana, Botswana Telecommunications Corporation (BTC) and a host of others in line for privatisation.

Equally, as a leading player in the tourism industry, the Tourism Law should be skewed in favour of citizen participation and ownership of camp sites and other machineries that oil the industry.

As a mining country, Botswana companies should have a slice of the industry as espoused by David Magang in his submission on the debate ‘Driving citizen empowerment through preferential government procurement’ published in Sunday Standard (December 20-26, 2009).

Magang argues that mining companies resource all the heavy equipment as well as the everyday spares from outside the country, saying it was disheartening that very little effort has hitherto been made to establish or encourage local operators to produce and supply mining companies with food supply, engineering services, explosives, conveyor belts and other consumables, like protective clothing and shoes.

Apparently, Magang is the same person who argued for diamond beneficiation that has now created over 3, 000 jobs to young Batswana, even though that was implanted too little too late.

In the construction industry, it has become a tendency that bigger contracts, like the airports and dam projects, roads and hospitals, are awarded to Asian companies at the expense of local ones. The argument put forward is that local contractors have, in the past, failed to execute bigger tenders and are thus incompetent. There is some truth in it.

Nonetheless, it is through empowerment that local companies should be tested as is happening in other jurisdictions with broad based citizen economic empowerment policies. For example, though flawed, the Black Economic Empowerment (BEE) in South Africa has positives that Botswana can learn from.

If it is found during tendering for bigger projects, like Sir Seretse Khama International Airport new terminal building and runway, that local contractors cannot handle the projects efficiently, the local companies should be allowed to participate alongside the international company that won the tender. The bottom line should be that the client (Government) should not lose out in the process ÔÇô not even from the economies of scale.

Although citizen preference remains controversial in view of international competition standards, it is presumed that Batswana will learn the ropes of construction in the process, while at the same time keeping the money inside the country.

On the other hand, if a big computer software company wins a tender to supply schools, the law should permit smaller IT companies with potential to learn from it to cling to such a multinational’s coattails.

Magang, who is a former government minister and, and incidentally a long time proponent of citizen economic empowerment, is bringing back these debates on empowerment at the right time, especially in the government procurement. The good thing about Magang is that he knows both sides of the debate.

Having been a Member of Cabinet he knows very well the arguments his friends inside the BDP hold against citizen economic empowerment.

Being a private sector captain who has had to contend with a lot of government resistance, he knows how frustrating it could be trying to run a business when you do not enjoy support from your countrymen, including your bosom buddies.

Following concerted lobbying, government acted in the right direction with the setting up of institutions, like the Citizen Entrepreneurial Development Agency (CEDA) and the Local Enterprise Authority (LEA), that are meant to help small businesses make a mark in the economy.

These are good initiatives, but there are still flaws that make them less effective like CEDA, which is not supported although a good initiative.

At the moment, the problem with government’s empowerment is that it lacks backing in the absence of relevant legislation for empowering citizens as is the case in other countries. There may be good pronouncements by President Ian Khama, but if CEDA is not supported, it will remain a bank that dishes out loans, but fails to recover them because businesses fail to get government support.

Critics against establishing a legal framework to support economic empowerment think Botswana will violate the World Trade Organisation (WTO) free trade rules, if it introduces protections. South Africa has the Black Economic Empowerment (BEE), but is not operating in isolation. It wants to protect its infant industries while at the same time cognisant of the WTO rules and its other international obligations.


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