Monday, July 15, 2024

Will Kenewendo’s proposed “Apex model” deliver what the economy desperately need?

Until recent years, Botswana has been exceptional among the African nations in so many ways. The country has perhaps merited the most admiration globally for its unique ability to direct revenue from minerals towards development and economic advancement during its early years of independence, or rather soon after discovery of minerals more especially diamonds. It was through the money from diamonds that we built large part of our infrastructure including main roads, schools and hospitals. Sadly, as we write this commentary some of these infrastructures have been neglected and are deteriorating. It is not just that ÔÇô a sizeable number of citizens of this country remain landless, moneyless and highly indebted.

From rising poverty, high unemployment rate and landlessness, the country desperately need some strategic reforms that will reverse the damage that has happened over the past decade or so.

This past week, the new Trade and Investment Minister, Bogolo Kenewendo addressed members of the press for the first time since taking office in early April this year. We were fortunate and privileged to listen to her speak on what she referred to as “apex model”.  Through the model and other policy changes, Kenewendo intends to protect the country’s emerging industries as way of creating wealth for the locals.

The proposed policy changes at the Ministry of Trade and Investment (MITI) are a clear indication that the economic situation of the dwellers of this country is not so glittering. On close scrutiny, when one pays closer attention to the plight of the economic well being of ordinary citizens it appears a number of them have little to be proud about.  Lately they have not been able to actively participate in the country’s economic growth due to low wages, high cost of living and lack of business opportunities.

Granted, government must be credited for its prudent management of mining revenues, stable democracy and good governance record in the past years. But the same government dismally failed to equitably share wealth from diamond mining among its citizens. This is what should always be on the head of Minister Kenewendo and her team at MITI as they journey on inclusive growth.

Minister Kenewendo and her MITI team should always bear in mind that too many Batswana ÔÇô particularly the indigenous ones ÔÇô feel left behind. It is not just a feeling; many Batswana really have been left behind. It can be seen in the data no less clearly than in their anger. And, as we have argued repeatedly in this space, an economic system that doesn’t “deliver” for large parts of the population is a failed economic system. It is quite evident that over the past decade and half the rules of the domestic economic system have been rewritten in ways that serve a few at the top, while harming the economy as a whole.

That is why it is very important that the apex model or whichever model that key ministries such as MITI chose to adopt should be a tried and tested model. It should be the kind that will deliver what this economy badly need ÔÇô inclusive economic growth as well as wealth creation for the citizens.   

If Minister Kenewendo has the joy of driving a manual transmission vehicle regularly, she certainly knows that the shift from first gear to second is the hardest and the most important. That’s when one actually begins to pick up speed and get somewhere. We need to shift gears from the first to atleast the second gear. If the domestic economy growth is to pick up speed anytime soon, a number of things have to work in our favour.

First, global oil prices need to stabilize. This would go in a long way in ensuring that that already depleted National Petroleum Fund (NPF) get some breather. Secondly and most importantly we need to find ways of getting money into the pockets of the citizens. As mentioned before, we failed to do that during the times when diamonds “were forever”. But like as the African saying goes, “the best time to plant a tree was 20 years ago, the second best time is now”. Now is the time to ensure that we hand back the economy to the rightful owners. The bitter pill that we all need to swallow – starting with our cabinet, precisely Minister Kenewendo is that to truly unleash our country’s potential we need to tackle the concentration of ownership, control and market dominance by foreigners. We need a sizeable number of locals to become key players in key sectors such as retail, financial services as well as manufacturing. As we write this, and as rightfully shared with Minister Kenewendo by one journalist at the press conference there are many foreign owned shops that have closed their doors to good quality products just because they were produced locally. We cannot continue like this. We cannot turn a blind eye on this setup if at all our citizen economic empowerment song is to sell. In fact from where we stand, our country is at point where we need to consider turning some of the economic policies into laws. We need an unapologetic citizen economic empowerment law – now. Policies can only take us this far, but for us to progress economically we need laws that will ensure that the interest of the citizens are legally protected.

While we wait to put up such law, we have to use the levers of government procurement more effectively to affirm Batswana-owned companies. We have been successful to a less extent, and as such need to do more to ensure that government’s substantial procurement budget opens up opportunities for emerging local businesses. In her speech at the press conference Minister Kenewendo mentioned the need to roll down red carpet for citizen investors. Such shift in gear is long overdue and we applaud her for making such a commitment.

In wake of this sad reality which has resulted in high income inequality, we challenge the current government and all interested parties to consider fresh ‘citizen-building’. Citizen-building involves providing people with the required skills to gather, understand and analyse evidence about the contexts and institutions that affect their lives ÔÇô particularly their economical lives. The #Bottomline is that the citizens of this country need knowledge, support, services and opportunities in order to thrive economically.


Read this week's paper