Wednesday, October 20, 2021

Will ESP solve Botswana’s economic problems?

The Economic Stimulus Program (ESP) was crafted to respond to an unrelenting slump in economic activity and rising unemployment. However, the ESP alone will not suddenly overturn Botswana’s economic misfortunes and usher in a new era of prosperity and economic boom.

The ESP’s sole intent is to boost economic growth through increased government spending. However, what should also be considered is the fact that there are gaps within the economy that will not ordinarily be bridged by availing funds. Simply, Botswana’s economic problems are varied and cannot be narrowed down to lack of spending. 

It would be inappropriate to chastise the ESP without assessing its merits. Government could not sit back and fold its arms in the face of the current deprived economic outlook. Things cannot get back to normal unless action is taken, and government introduced the ESP to defend the economic growth that has been achieved so far, which includes staying on track with diversifying the economy and creating employment. This is the intent of the ESP, to protect the economy against regression. The program will target the Construction, Manufacturing, Tourism and Agriculture. It will also fast track the Economic Diversification Drive (EDD) and the Special Economic Zones (SEZs). 

While the ESP emphasises on government spending, others have opined that stimulating the economy by increasing the availability of money is not necessarily what the country needs. Given the challenges that continue to plague the economy, which include high unemployment, poverty and income inequality, it could be suggested that a combination of government spending, reformation of the business environment, earnest commitment to policy decisions and respecting public accountability would ensure economic prosperity for the country.

Michael Fairbanks, co-Founder of OTF Group and the SEVEN FUND, which provides grants for enterprise solutions to poverty, illustrates this point better: “There is that threadbare maxim: If you hold a hammer in your hand, every problem looks like a nail. What happens, then, when all we hold in our hand is a cheque book?” 

The argument is not premised on what ESP is doing, which is injecting money into the economy; what is in question is whether pumping money into the economy will solve the country’s problems. Supporting this argument is the fact that the Ministry of Finance and Development Planning is on record stating that poor implementation remains a problematic phenomenon that hinders delivery of public services. Finance Minister Kenneth Matambo has been quoted saying: 

“During NDP 10, the development budget has been under spent by an average of 17.3 percent for the years 2011/2012 through 2013/2014, due to delayed project implementation. Even where projects were finally delivered, they were usually characterised by cost overruns and questionable quality. It is against this background that government continues to take measures to improve on project implementation.” 

It is difficult to arrive at the conclusion that money availed will trickle into the economy to unlock opportunities of growth and employment when the country is still grappling with poor implementation. Poor implementation questions the delivery of projects that ESP is set to bring to the fore. Providing context to the implementation challenge is a paper by Research Fellows at the Botswana Institute for Development Policy Analysis (BIDPA) Gape Kaboyakgosi and Keneilwe Marata. The paper identifies a number of challenges that emerge as strong bottlenecks to optimal policy implementation in Botswana.

Such challenges include increasing policy complexity, declining levels of accountability and lack of commitment to reform. While Botswana has historically been commended for it’s eloquently weaved policy framework, Kaboyakgosi and Marata argue that government does not earnestly follow such policies. When launching the ESP last month President Dr. Ian Khama revealed that the Government Implementation Coordination Office (GICO) was being strengthened to oversee the implementation of all government projects as well as to monitor and to keep records of their progress. On the other hand, the National Strategy Office (NSO) will focus on successful delivery, strategic oversight and support to ensure that the goals of the ESP are achieved.

However according to Kaboyakgosi and Marata the commitment to reform is rendered short by the failure to empower reform institutions such as NSO. 
“The NSO, a semiautonomous agency in the Office of the President, whose mandate includes coordinating the Botswana Excellence Strategy (BES), lacks legal authority to undertake certain aspects of its mandate,” they said.

Consequently, compliance and implementation are left to the discretion of the implementing agencies. In a discussion on whether money will solve Africa’s development problems, James Shikwati, Founder and Director of the Inter Region Economic Network said: “If money was the key to solving problems, banks would send agents on the streets to supply money to afflicted individuals. But banks only offer money to individuals who successfully translate their problems into opportunities.” The question then arises: Will the ESP solve Botswana’s economic problems?



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