Despite its status as an upper middle-income country, its international renown for peace and stability and its level of integration into the world economy, Botswana has one of the lowest FDI inflows in the Southern African Development Community region.
In its 2014 election manifesto, the Umbrella for Democratic Change (UDC) chalks this lackluster performance down to “poor identification and targeting of high impact local and international investors.”
That being a new set of words and idea in public discourse, Sunday Standard sought elaboration from the party’s policy director, Ndaba Gaolathe. His conception of a “high-impact investor” is one “who is able to invest a significant amount of financial and or human capital or knowledge in a manner that creates jobs, proprietary skill and financial gains for citizens as a whole, in a sustainable way, and in a quantum superior than the average Botswana-based business venture.”
It is inconceivable that any government, the Botswana Democratic Party’s included, would willfully go after low-impact investors. While he concedes that point, Gaolathe points out that a government may, without realising it, foment an investment eco-system that is not ideal or conducive to attracting high-impact investors.
“Botswana needs to do more than just sustain macroeconomic and political stability to attract the type of investor that could lend the country the leap that is necessary to realise prosperity for the majority of citizens. One of the realities of our country is that its small and landlocked market makes it difficult to compete for investors with neighbouring countries which are not only endowed with macro-economic and political stability but enjoy more cost-effective access to world markets,” he said.
Under such circumstances, he recommends that Botswana should do “special things”, in particular, create an eco-system that not only woos but potentially sustains the presence of high-impact investors. Such eco-system must churn out more investable projects or opportunities in sectors where the country has reasonable prospects of success; integrate and seamlessly coordinate the work of diverse but complementary institutions like research and development, entrepreneurs, the Citizen Entrepreneurial Development Agency, Local Enterprises Authority, the Botswana International Trade Centre, the Department of Immigration and Citizenship, landboards; empower and better prepare citizens to collaborate and partner with small and large investors; focus on specific sectors; and, set product-and-service as well as revenue-and-timeline targets for Botswana’s economic drive.
“Our manifesto proposes how we intend to tackle the ingredients above. We have provided specific infrastructure expansion guidelines from which many tangible projects, many of them in a public private partnership model, will emerge. We will also have established a Research and Development Programme (supported by an integrated system under the new Botswana Centre of Science, Technology, Investment and Management Excellence) intended to further develop, for example, indigenous foods, flowers, drinks and medicines into potential international franchises – the programme has other areas such as solar energy, water and material science. So we will direct high-impact investors towards these tangible opportunities. This is one way that we will keep a focused approach to finding investors,” said Gaolathe.
In order to attract high-impact investors, UDC also intends to pursue strategic investments through at least two holding companies, each managing one or more of several sector funds established to identify meaningful or even high impact investments in the identified focus sectors. As important to the party will be resolving some of the structural bottlenecks that impede FDI: cost, bandwidth, speed of international communications, cost and access to water and power, cost and speed of access to serviced land or land in general as well as speed and reliability of immigration and permit process.