Saturday, September 26, 2020

To set local procurement in motion: Move the cat, not the Milk

In August 2016, South Africa Business Forum in Botswana, in association with Business Botswana hosted a plenary workshop for South African retailers operating in the country. Key deliverables for the said workshop entailed amongst others things, a framework on local procurement and market access for Botswana product and services.

The workshop was also to touch base on value chain linkages to kick start Botswana based manufacturing for import substitution and export.

Twenty-three months down the line, we still wonder if any of the key deliverables of that workshop, which was attended by amongst others, Investment, Trade and Industry Permanent Secretary ÔÇô Peggy Serame has been attained or at bare minimum there is any progress to ensure that they see the light of the day.

What we know for sure is that, just like in the past years, there is still lack of procurement from local suppliers by South African retailers who still source vast of their products from their home country. That is to say, procurement from local suppliers by these retailers has been at almost zero over the last several years. This failure to source from locals is not only common amongst SA retailers as even the so called local retailers are not only failing to procure from our people who are in business but also exploiting those they have hired as shop assistants. Just recently we learnt about one of the leading SA retailers, who through procurement agents (South African) source horticultural products from Batswana farmers and pay them ONLY when they so wish. The group of Batswana which supply this particular retailer are unhappy that despite the fact that they produce international standard products, deliver them on time, they get to be thrown from pillar to post by the appointed agents. This is unfortunate and should stop immediately.

This set up should be brought to an end through a regularity shift by the government. A shift in regulations is necessary as it will pave way for the processes that will ensure that conditions are set for these giant retailers to obtain trading licenses. For a very long time, retailers who are trading in this country chose not to make any deliberate changes in their procurement policies and supply chains which could have been beneficial to our people given their socio and economic status.

In the meantime, while SA retailers continue to cement and preserve their market share, the propensity to procure goods and services from their country of origin is undermining the government’s Economic Diversification Drive (EDD) policy. A lot of money that should be revolving and sustaining the local economy continues to leave the country’s shores at alarming rates.

This lack of support of local enterprises is inhibiting economic development and like we said end up defeating the noble ideals of the government’s Economic Diversification Drive policy aimed at import substitution.

Dear Honourable Kenewendo, this is why we need to start talking on a possible shift in regulations relating to licensing and procurement by these giant retailers. We have always noted, as we do even now, the persistent worry expressed by some of these retailers about local suppliers’ capacity, more especially of SMEs. Their worry is that local produce is of low quality and not good enough for their shelves. We however believe that, with necessary support from both government and business sector, that can easily be solved. The persistent fret by these businesses should not in any way make us forget that a lot of them have closed their doors to good quality products just because they were produced locally. If pushed we can single out CNA book stores and Musica music stores (both South African) as amongst retailers who have for a very long time refused to sell local products even though they are of international standards.

If we have international authors and artists, what could be the rationale of having their products hardly getting onto the shelves of these dominant retailers? Could this dreadful practice be encouraged by the sold called open economy?

Just like we have always said in this space, the government should as a matter of urgency come up with a comprehensive law on citizen economic empowerment. Such a law will cover issues like these which have left a lot of Batswana stagnant on the same economic class for so many decades.

While we wait (Possibly in vain) for this law, 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. This will also ensure that we silence the good excuse that some of our products are not good enough. Instead of pointing fingers and blaming South African companies and other multinationals for our own mischief, we need to stand up compete. The only thing that perhaps the government need to do is to come with a law that will protect Batswana and ensure that they become active participants in their economy. We know of the fear by the government that seeks to avoid sending protectionist signals to our country’s trading partners.

But the #Bottomline is that all interested parties have a role to play that will ensure that we end this misplaced and self depreciating national psyche that everything that is produced in Botswana is of inferior quality.

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