Monday, September 28, 2020

What would it take to turn Selebi Phikwe into Shenzhen?

Could it be called a coincidence that six Fortune Global 500 companies were born from a single city? This is true for China originating companies, which have successfully thrusted themselves into the global space, whose roots are traced to Shenzhen, a coastal city in South China adjacent to Hong Kong. The six companies are Tencent (WeChat), Huawei, Vanke, Pingan, Amer and China Merchant Bank ranking at 478, 83, 307, 39, 193 and 216 respectively.

Information from the Foreign Affairs Office of Shenzhen Municipal People’s Government reveals the uniqueness of the city. The city was the country’s first special economic zone established by the Chinese government in 1980. It is one of the most developed cities in China and also registered growth at the fastest rate. It is the high-tech and manufacturing hub in Southern China. It has the largest number of ports in China, and the largest cross-border flow of passengers and vehicles. It is considered an ideal place for domestic and foreign entrepreneurship, proving to be a magnet for both Chinese and foreign investment. “8037 national tech companies are located in the city, and 275 of the Fortune 500 companies can be found here, including IBM, Walmart, Microsoft etc” Four important ingredients to the city’s robust economy can be derived from this information. One, government support, two, private capital investment, three, ease of movement and four, entrepreneurs; the people who demonstrate, through their ingenuity, the necessity of the other three elements.

Botswana demonstrates a proven track record of government support, access to capital, a pool of talented entrepreneurs but is yet to match the level of entrepreneurship as that of Shenzhen. Could the reason be simply that Botswana does not have ports to enable and accelerate the movement of both goods and people? That would suggest that the lack of a robust cross-border transport hub is a glaring impediment to the country’s entrepreneurial success.     

Botswana, like China, has established special economic zones. The Botswana SEZ Policy of 2010 and the Botswana SEZ Act of 2015 provide the legal framework under which SEZs are established, developed and managed in Botswana. An example is the Selibe Phikwe region, located in Central district of Botswana, under which the Selibe Phikwe Economic Diversification Unit (SPEDU) was set up in 2008, to attract investment and as such propel diversification of the economy. The zone exemplifies continuous government support along with preferential treatment. It also has demonstrated the availability of business and economic opportunities and potential, which have to an extent proven its relevance.

A like for like comparison of China and Botswana SEZs is not realistic and is not the point of this discussion. Both countries have unique and respective development histories and economic building blocks as well as government structures, factors which can influence the outcome of SEZs. But the two contrasting SEZ outcomes leave one big question. The reality on the ground with Selibe Phikwe appears not to be reflective of the seemingly significant effort that has been ploughed into establishing the zone as a robust economic hub. Since 2008 SPEDU has appeared to be relevant but the collapse of BCL depicted its glaring shortfall and showed, with urgency, the need to accelerate diversification of the economy. If government support and preferential treatment is evident and the support given to entrepreneurs by entities such as CEDA, LEA, BDC, NDB is provable as well as the existence of ingenuity in Botswana’s entrepreneurs, then what else remains to be done to realise success from Selibe Phikwe

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Sunday Standard September 27 – 3 October

Digital copy of Sunday Standard issue of September 27 - 3 October, 2020.