Tuesday, July 16, 2024

We can no longer depend on foreign investors to create local employment

While not so long ago countries used to put foreign investors at the very center of national economic strategies and employment creation, recent developments signal that such a way of doing things may no longer be tenable.
Not only are foreign investors hard to come by, they are also unpredictable as to be outright costly in certain instances.

The bottom line to always bear in mind in our quest to attract foreign investors is that investors do not set up here because they want to help us as a country to create employment.

They come here because they look around and see real chances of making good returns on their investment.

It’s all about the money, simple.
The ball game has changed altogether.
The competition for foreign investors has grown out of our control.

Those attributes with which we used to market ourselves as particularly unique to Botswana, especially when compared to our neighbours in the sub-continent are no longer just exclusive to us.
We used to say we are a stable and democratic country with a respect for the rule of law and private property rights. We did not exaggerate.

We used to hark on the predictability of our systems. We were being honest.
The trouble now is that almost all countries in Southern Africa have since democratized. Even late comers have since surpassed us in some respects.

With the exception of a few wayward states, like Zimbabwe, countries in the region are actively doing everything to grow their share of the Foreign Direct Investment.

The end result is that all of a sudden investors find themselves with many options and choices of just where they can put their money with enhanced chances of good returns.

Realising just what a scramble we have embarked on for them, investors are in turn becoming more and more demanding.
They know that they have in their possession that which many of us as Southern African countries are dying for – capital.

It is thus not surprising that foreign investors have become not only choosy in where they want to set up their businesses, but also increasingly demanding.

They demand to be treated with respect.
While only a few years ago foreign investors would be happy in the knowledge that authorities here would process the requirements such as residence and work permits, nowadays they want to be told in advance just how long processing such formalities will take.

While not so long ago it was up to the investor to find for himself/herself the office spaces and such things as factory spades, nowadays they insist on guarantees that they will not only be given such spaces but also that such spaces are within reasonable distances from commercial centres and other entertainment places, that can be easily accessed by their families.

While in the past it was sufficient for investors to know that their children will go to school were they to set up here, the latest demands now include detailed resume of such schools and the quality of the teachers.

Not so long ago, we ran an article in which Botswana’s High Commissioner to India, Ms Dorcas Kgosietsile, effectively called for a change of tactics in the way we go out as a country to convince foreign investors to come and settle in our country.
We can not agree more with Ms Kgosietsile.

As a foot soldier resident in a country that has become an important global player in commerce, Ms Kgosietsile has first hand information on just how fast the rules of the games keep changing.
As Botswana Government’s eyes on the ground in India, we cannot for a second afford to ignore her advice without losing out.

At another level, Botswana has to contend with a number of negative attributes, many of which as a people and government we have little control over, if at all.

Those include the fact that we are a landlocked country.

An absence of access to the sea is a serious challenge to today’s commerce operations.

Compared to many other countries in the region that look up to the same places as us for investors, we have a very small domestic population. This translates into a small domestic market which is not attractive to investors.
All these work against us in that they make us less attractive simply because they substantially increase the costs of doing business here.

But still we have many advantages which, unfortunately, we are not harnessing, at least not as aggressively as to award ourselves an upper edge in what has become a ruthless ball game of attracting foreign investors.

The advantages that we have include the fact that Batswana are a well educated people.

Over the years, government has spent generous amounts of money in equipping our people with skills.

This attribute means that many Batswana are trainable and can easily adapt to whatever skill requirement the foreign investors want.

But then there are a few such things as utility costs which we still have to work around.

Many potential investors weighing their options of settling in Botswana always complain of high costs of such things as water, telephone and electricity.
Surely, a way can be found to work around these if we are to attract serious investors.

On a positive note, Government has done a lot in improving the turnaround time for such paper work as business registration, processing residence and work permits as well as getting space for factory sheds and the like.
The truth, though, is that we can no longer rely on foreign investors for employment creation.

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