2018 economic outlook positive

SHARE   |   Monday, 26 February 2018   |   By Ditiro Motlhabane
2018 economic outlook positive

Industry captains, academics, business and politicians concur that recent developments in the region have coalesced to project a positive outlook about economic prospects for the year 2018.  An air of triumph swept across the room as panellists at the Barclays Economic Outlook forum in Gaborone on Thursday morning took turns to draw a glowing picture about the business landscape in the year ahead. The panellists included experts from different fields among them the private sector represented by Business Botswana, Chief Economist and Head of Research at Barclays Africa Group Jeff Gable, banking, tourism represented by HATAB CEO Lily Rakorong, Government think tank BIDPA and University of Botswana academic Mphoeng Mphoeng – a lecturer in the Department of Accounting and Finance. Gable set the tone for the discussion when he submitted that the global economy enters 2018 from a position of strength. He said the 3.9% projected for 2017 would be the fastest economic growth since 2011, adding that the good thing is that such growth is largely synchronised, creating a positive confidence momentum. He observed that although the labour markets are tightening around the globe, core inflation so far remains comfortable. He, however, said in terms of markets volatility is expected to rise as market recognises late cycle economic conditions. Although all panellists agreed that prospects for the future look bright, they also pointed out that it may not be smooth sailing. A number of reforms, predominantly on Government side, have been highlighted as enablers to address challenges.

Business Landscape 2018
Policy Advocacy Director at Business Botswana, Dichaba Molobe, hailed the private sector for embracing new trends in (ICT) technology to communicate, conduct business and handle transactions. He decried the slow uptake in Government departments and ministries who conduct and facilitate business with the private. Molobe said there is an urgent need for Botswana to improve the process of issuing Visas, work and residence permits by creating a transparent one stop service centre. "The current system is hazy and susceptible to abuse by government officials, who can use some provisions selectively to reject applications without just cause," he said. Although private sector has adopted new technologies and is ready to do business online, Government is still lagging behind with implementation. This makes it impossible for business and other transactions to be done online, said Molobe citing examples of the long pending e-Gov project, bureaucracy in issuance of EIA reports, failure to introduce a Public Private Partnership (PPP) Act. He encouraged Government to learn models used in other countries like Gabon where application and approval for Visa is done online; in Rwanda Visa is issued at port of entry; while in Mauritius the "silence means consent policy" applies. Poor turnaround time was also identified by Hospitality and Tourism Association of Botswana (HATAB) CEO Lily Rakorong, saying although the tourism industry is ready to play its part in poverty alleviation and creation of jobs, poor implementation on Government side is a major problem. For example, she said, although Botswana developed a Catalogue of Issues to be prioritised as far back as 2010 implementation was only actualised in 2016. Rakorong said there is positive Tourism Outlook as shown by ever increasing contribution to GDP which stood at 3.6% of 2009 but is now at 4.9 % of GDP. Notwithstanding poor implementation by Government departments, Molobe hailed business reforms undertaken by regulators like the PPADB who have streamlined paperwork for bid documents. Going forward bidders will no longer be required to produce certified copies of identity cards (O mang) for every bid.

On the other hand CIPA is rolling out online registration of companies, which will be available to local and foreign investors. The system, expected to be available around July 2018, will cut bureaucracy. To this end business confidence is projected to rise to 67 in H2: 2018, from the 52 in H1: 2018, Molobe said. "Change is imminent. By April, three big countries in the region will see major changes in the political leadership. If your neighbour is undergoing major changes you need to take heed and avoid being left behind," observes Specially Elected MP Bogolo Kenewendo in response to the positive economic outlook and changes in political leadership at home and in the region (South Africa and Zimbabwe)  as portrayed by experts. Disappointed that the Ease of Doing Business Ranking has dropped from 152 to 190 because of difficulty in establishing and operating a business, Kenewendo said efforts are being made to improve the situation. An initiative to achieve that, she said, is the Doing Business Roadmap 2014 that was developed by stakeholders among them Government, Business Botswana and Ministry of Investment, Trade and Industry.  The legislator said the April session of Parliament will discuss four Bills to amend CIPA laws on the registration of companies to improve the ease of doing business. Kenewendo has already tabled a motion on reducing the number of days it takes to start a business. As part of reforms, Kenewendo said the April/ May session of Parliament will conclude discussions on amending laws to remove requirement for inspections for trade licences, where such process is not necessary for the business to operate.  She also emphasised the need to look at immigration in a more flexible manner rather than being rigid. For example, there should be no requirement for work permit when an investor visits the country for a meeting or just a simple routine inspection, she said.
Kenewendo expressed hope that the Immigration reforms Bill, which was withdrawn from Parliament in the past, will be brought back to the house to cause amendments that will improve it. "All in all I am happy that the 2018 budget is up 15% in relation to health and education, showing commitment by Government to improve lives," she said.

Corporate Director Barclays Bank of Botswana, Lesley Bradley, says the bank is ready to partner with business to create jobs to absorb graduates roaming the streets and alleviate poverty. She said in terms of technology, on the corporate and retail side, income has come under pressure in the last two to three years because a lot of transactions done outside banking platforms via mobile money. She said the bank should seriously look into how to deliver services in such platforms and space in the mould of the likes of MyZaka, Orange Money, Bitcoin (the future of money utilisation) etc. Bradley cautioned that as technological trends deepen and intensify banks have to evolve to adapt. On the other hand Bradley said Barclays has been supporting Public Private Partnerships (PPPs) for over a decade. She said the bank already plays in the PPP space, although differently worded in current partnerships. For example, Bradley said Barclays is already facilitating partnership transactions between the Catholic Church and Turnstar Holdings for developments in Kgale and other investments in Central Business District (CBD). "We are happy that Government spending, as captured in the 2018 budget, emphasises spending in infrastructure, energy and alternative energy, education and health care," she said.