Economic diversification, job creation 

SHARE   |   Tuesday, 30 May 2017   |   By Lekwalo Mosienyane
Mosienyane Mosienyane

Business Botswana was asked several days ago to make a formal presentation on the private sector’s contribution to economic diversification and job creation. As economists always explain; the private sector contributes automatically as it is constantly striving for growth – because for the private sector, this is a matter of survival. If a firm does not succeed, it means there is no income and no food on the table. The private sector contributes with every pro-growth action we take on an ongoing basis and in our efforts to expand in order to accommodate more jobs. The more the private sector grows the more jobs we create, and as Michael Porter explained at the 1994 BOCCIM conference, the private sector’s ability to grow can either be suppressed or be facilitated. We have been growing and creating new jobs – the point here is that diversification will only happen if this growth and job creation are escalated to a new level – and for this we need major mind set shift. It is clear that the way forward to diversify and grow the economy and reduce unemployment is to provide a supportive environment for rapid growth of the private sector – not just mining, but the broader private sector. Our formal presentation will highlight how we jointly as the public and private sectors have been able to do this in the not so distant past – illustrating that it is something we can do again and sustain in the future if we put our minds to it. We in the business community still remember that 22 years ago Michael Porter explained how the Botswana government could use public resources to provide the type of supportive environment that is needed to grow the economy. He said, and I quote: “The role of government is to provide infrastructure, promote the up-grading of productivity by all, enhance skills for all, improve economic sophistication, and create a competitive environment by breaking down cartels and monopolies and supporting the formation of clusters.” 

On this note it is worth observing that: First, on infrastructure, we know and appreciate that government has worked on the provision of infrastructure – but this is almost never done as part of a joint infrastructure strategy with industry and so is rarely crafted to the needs of the business sector. Having made its financial contribution in taxes, it is only right that industry have a say in the strategy for infrastructure that is supposed to support its growth. The documentation we submitted weeks ago to the NSO and Ministry of Trade. The time is now, with the take-off of NDP 11 for Government to share its implementation plan. This is very important. We all know that implementation is a major weakness for all us combined. It is time we created confidence about year on year achievements by clarifying models that will ensure meaningful engagement of Botswana’s capacity. In this case where the greater capacity resides in the Private Sector – capacity in value engineering, capacity in Project Management, Capacity in skills development, and job creation. In this regard I wish to acknowledge H.E. on the State of the Nation speech when he recognised the role of the Private Sector and H.H. the VP’s engagement of the Private Sector. Second, on productivity, little has been done to upgrade productivity for all in a manner pertinent to the business sector– the industry-specific technology adoption and adaptation needed to raise productivity and help competitiveness is yet to be explored. I implore government to engage the Private Sector in defining how this support would best be structured. Financial incentives to support independent business efforts should be put in place to promote productivity. Third, regarding the enhancement of skills, we are all aware of the ongoing skills mismatch issue in the labour market and of how extremely difficult it is to fill the skills gap with foreign skills and expertise. There are also no financial incentives to support business efforts to upgrade skills domestically. Fourth, on improving economic sophistication, there are no model factories or plants with the latest know-how and technology used to train and develop the private sector firms and businesses in their respective sectors, and there are no financial incentives to enable the private sector to make such public goods available to businesses. The private sector is also not involved in designing intervention strategies. Efforts to form clusters and value-chains outside of diamonds have only just begun. We recognise that government patterns of behaviour and culture are deeply entrenched making it difficult to reform at a rapid enough pace for change to manifest, nevertheless we do believe that government could make substantial inroads if it were to mimic pertinent legislation and reform processes of successful African reformers such as Mauritius and Rwanda.

Sector-specific concerns of business 

I will also just high-light some of the transformative initiatives we have put in place to enable more efficient and effective business as well as a few sector specific concerns. We cannot talk about productivity and weak implementation without talking about corruption. Often the perpetrators keep on positioning themselves to render them invisible… little do they know that they are known to both of us. Business Botswana has gone a long way to discourage its members from corrupt practices. We still have a long way to go by putting in place anti-corruption policies and to protect whistle blowers. The implementation function of the PSDP has moved to Business Botswana (BB). Close to a hundred SMMEs were identified for participation in the audit process which showed where they might be falling short. All the SMMEs interviewed showed remarkable benefit from the interventions- some moving from the brink of collapse to increased profit margins and turnaround in record time. The value chains elaborated under PSDP provide comprehensive analysis of challenges, opportunities and pragmatic recommendations which could be implemented in the short term by the public and private sector. Among these are the diversification of products, effective marketing, branding and packaging. This could be achieved together with the upgrading of the management capacity of the producers and negotiation of commercial agreements with distribution networks. The proposed actions can be used by Government, Intermediary Organizations and sector associations to effectively develop the value chain, impacting positively on new investment and employment while building the capacities of institutions and human resources that supports it. This would impact positively on the quality of implementation of the NDP 11. With regards specific concerns at this time, we hope that the joint results are implemented and our proposed solutions be considered for adoption by the HLCC. We also feel the need to raise the issue of the Tourism Development Levy. The recent introduction of the 30USD Tourism Development Levy illustrates the ongoing concern that the government often introduce and implement regulations which have negative implications for business. There was no consultation with the private sector. Hence our proposal to you Sir is to halt implementation of the levy pending a comprehensive consultative process with all interested parties. We further propose an impact assessment be conducted.

Slow implementation of policies 

The private sector remains concerned with the slow implementation of various policies and initiatives such as; the Doing Business Reforms Roadmap, in which we continue to see very little progress on the ground. In addition to the proposal we have submitted to Ministry of Trade and NSO on this matter, we propose that the private sector be brought on board to assist with the management, monitoring and evaluation of the roadmap, to ensure timely implementation of policies. This is the last HLCC meeting I will attend as President of Business Botswana. I wish to take this opportunity to express my sincere gratitude to you and your government for the support you have afforded me during the four (4) years I served as President of Business Botswana. 

Remarks by Business Botswana President, Lekwalo Mosienyane, at the High Level Consultative Council (HLCC) meeting on 18 MAY 2017 in Gaborone.