Government has been urged to extend support to grow the local manufacturing sector through relevant policy framework and protection as it holds great potential for economic diversification and citizen economic empowerment.
Delegates to the Botswana Exporters and Manufacturers Association (BEMA) last Friday, held under the theme: ‘Reducing the import bill through procurement of locally manufactured goods and services’, complained of lack of protection from government and contradictory policies.
The vice president of BEMA, Buzwani Manyepedza, called on government to 'fix its house' and address simple factors that can support and grow the local manufacturing sector. He gave the example of contradictory policies, which he said need urgent attention. A representative from the ministry of trade and industry, Lesedi Kgotlele conceded that they have since realised that there are some sections of the Economic Diversification Drive (EDD) and Citizen Economic Empowerment (CEE) policies that do not marry. She said her department will soon complete a review of the policies to make them complement each other.
Although he applauded government for initiatives to support local producers and manufacturers, Manyepedza said government should not go back and forth in extending such support to the budding industry. "Manufacturing in its infant stages, as is the case in Botswana, cannot grow without government support," he said.
He complained that setting out tender specifications in procuring entities is a one man show. He said to address this, procuring entities should form committees to come up with specifications for tenders rather than the current scenario where only one officer is responsible for everything. "Suppliers cannot source from local producers when the product procured is not specified correctly by the procuring entity," he said.
Millers Association of Botswana chairman, Nkosi Mwaba of Bolux Group said there is a need for a paradigm shift from seeing Botswana as landlocked to being a 'land linked' country, providing an opportunity to be the central linkage for the region due to its strategic location. He emphasised the need for partnerships between government and private sector to unlock potential in local production, also urging government to protect local budding industries. To enhance local procurement, Mwaba said there is a need to strengthen of local industry associations, improve dialogue with regulators and improve relations with other industry players. He said the major challenges with locally manufactured goods centre around issues of quality, consistency of supply and capacity to compete regionally amongst other concerns. He encouraged local manufactures to work on improving the quality of their produce in order to be competitive.
Locally manufactured goods and services include minerals, processed foods, textiles and footwear, meat products, furniture, salt and soda ash, dairy milk and stationery/ paper products. To demonstrate potential in the local manufacturing sector, Mwaba said, the milling industry imports 96 per cent of raw materials from outside the country due to limitations in domestic supply. He said only 2-3 per cent production of the potential 120 000 tonnes is ever met.
Other challenges include failure by EDD because different industry players are reluctant to reveal projections, ease of doing business in Botswana, the non-existence of special economic zones, narrow range of manufacturing and unavailability of key commodities locally. In response, assistant minister of local government and rural development Olebile Gaborone warned that protectionism, as demanded by the private sector/ local manufacturers, does not translate to efficiency. He said on the contrary, research has shown that over protectionism, which eliminates competition, has in some instances led to complacency and reduction in quality in some sectors. He also said his ministry has received numerous complaints from small millers that they are being pushed out of business by big milling companies.
Gaborone commended BEMA for their efforts to educate manufacturers and exporters on critical competitiveness matters to assist members to penetrate the export market which continues to be very complex and hard to enter. "It is important for government to support private sector and the industry at large through targeted deliberate programs as we forge the Public Private Partnerships. The role of private sector is becoming increasingly important in terms of advising government on policy formulation as well as international trade," he said.
On EDD, Gaborone said government has embarked on the initiative to promote the growth of a vibrant and globally competitive private sector by leveraging the government's purchasing power to stimulate local production and consumption by procuring from locally based manufacturers and service providers. "To ensure that this purchasing power is leveraged government has introduced preference margins to give local manufacturers and service providers a competitive advantage when bidding for government jobs. In addition, a national suppliers directory has been produced which will enable the buyers to locate sellers with ease," said Gaborone, further revealing that government in partnership with United Nations Development Programme (UNDP) and Commonwealth Local Government Forum (CLGF) have developed a Local Economic Development policy to assist districts to exploit local economic opportunities for sustainable development. The policy framework will be completed soon, he said.