The African paragon of economic flourish and nation building

SHARE   |   Monday, 19 February 2018   |   By Ndaba Gaolathe
The African paragon of economic flourish and nation building

I rise in exercise of the heavy burden of responsibility to which many citizens of our country have, by the power of the ballot called us to. Many of them walked many miles under the scotching October sun of 2014 to cast their vote. This was their way ofsigning a covenant with all those who sit in this august House. By their vote Mr Speaker, these swarves of our people right from the crystal clear waters of the Chobe to the dry sand dunes of Kalahari, placed their hopes that those who form this august House, will collectively help to break the vicious cycle of poverty that engulfs our people. They believe they were entering into a covenant with leaders who realise their desperation to lift the material condition of their families and communities. In fact, the many citizens that voted never really asked much from us. They simply ask for a life of opportunity to walk the sacred path of life, freedom, justice and the pursuit of happiness. These people of Botswana are depending on these Members of this august House to be their voice and voice their aspirations. They are hoping for our leadership in cultivating a path towards this collective vision that they have as a people. Even though this annual Budget presentation by the Minister of Finance and Economic Development is not and cannot be the sole instrument by which is possible to resolve all our national challenges or to pursue our collective vision, this is nonetheless an opportunity to share the insides about what this nation can and should be able to achieve. This is the right moment Mr Speaker, to spell out the opportunities that are before us as a nation. This is the right time to rise so that the historic annals of this Chamber capture the echoes of our appeal and cries that we should and can do much better as a nation than we are at the moment. We should be able to do better than our forefathers were able to do, better than they ever did because we have at our disposal more resources than they ever had. We sit on a sea of the global opportunity upon where we sit on this sea of global opportunity, we have more than our forefathers had. We may not acknowledge this Mr Speaker, but both the preindependence and the post-independence period carry national experiences for which our forefathers enjoyed a claim as a unique socio-economic story.

First, they established in enduring culture of the consultative Kgotla system and then inspired substantial and sustained economic growth. They laid a foundation for a democratic system of governance and planted a that we have it in us to achieve prosperity. Mr Speaker, I want to put it to us that all of us can see these challenges that I want to talk to you about. These challenges that lay before us as a nation. Mr Speaker, every generation that came after our forefathers should have realised, that these achievements of the past are neither perfect nor complete even more precise these imperfections, lapses and incompleteness of our system have grown more pronounced over the last decade. We have been experiencing a worrisome trend of jobless growth. We have been experiencing growth as a whole that has been declining especially during the National Development Plan (NDP) 9 and NDP 10 periods. Our economy continues to be undiversified, our income and wealth inequalities persist as a nation even though it has been improving moderately over the last few years. Our governance Mr Speaker, continues to be in freefall if I may put it like that. The Executive Government, the Executive Branch of our Government is over bearing through its high centralisation and dependence on the rogue Directorate of Intelligence and Security Services (DIS). Hundreds of millions if not billions of Pulas are leaking from the system without much accounting, as has been the case in the National Petroleum Fund. Mega tenders are awarded and appointments are made without merit. Further turning our country away from meritocracy and through this sometimes false senses of the idea of majority rules, the majority in Parliament continues to allow circumstances of our Parliament that is disempowered. A Parliament that is no more than a department in the Office of the President. A Parliament that does neither have the capacity or capability to carry out its own independent analysis on the economy or craft laws outside the intervention of the Executive Government. Local councils neither have the budget nor the manpower to bring international standards services to our people. Mr Speaker, I want to put to you that we should not think that the Budget can and should solve all our problems, it should not. And this reminder Mr Speaker, of the glaring and growing pronouncement of the imperfections and the incompleteness of our system is not an attempt to put all the blame on the Minister of Finance and Economic Development or to the Budget to which he has been responsible. To do so would be to fail in the understanding that our economy and social welfare depend on more than just Government budgets.

And more Mr Speaker, the Minister of Finance and Economic Development is not and cannot be expected to be in control over the actions of the larger Government machinery or the actions of thousands of other social, political, cultural and economic agents in our society. If anything, and despite the many imperfections and lapses in our system, the Ministry of Finance and Economic Development and indeed the Bank of Botswana should receive some credit for managing some of the variables within their control and scope. They have worked to offer Botswana a macro-economic environment of relative stability in respect of balance of payments, exchange rates, inflation, interest rates, Government debt levels and budget balances but macroeconomic stability alone is far from what this country needs to transform its economic fortunes. Yes, macroeconomic stability provides a reasonable foundation from which all those who wish to offer Botswana a grand vision can work from but it cannot on its own adequately address the imperfections and lapses of our system. Although the Ministry of Finance and Economic Development may deserve credit in husbanding a reasonable macro-economic environment, the Government of which they are a part, through the same budget, portrays an ominous disinterest catapulting our nation into a true African paragon of flourish and nation building. Today we rise to speak on behalf of all Progressives, citizens that have offered their lives to assisting our nation become the paragon of the economic flourish and nation building. This is our offer to the people of Botswana, Mr Speaker. I want to put it to you Mr Speaker that it is really possible, to transform our economy if we applied ourselves as a nation. While it is always tempting to delve directly into the ministry allocations, as the Government Budget presentation did, the real gulf we wish to bridge is that of the nation’s development and transformation narrative. We need to be clear about the possibilities and opportunities that we confront or that confront us as a nation. What are those opportunities that we should run with? How best can we run which each of those opportunities? How much should we invest in each of these opportunities to reap maximum benefit from and for our people? These are the questions and answers we wish to explore today. Our view of investment is not only primmest on monetary investment but investment of effort, investment of time, investment of energy towards reaching out those opportunities that are for our taking as a nation.

Mr Speaker, our view of opportunity is inspired by how we look, how we see the future and how we think this future will unfold and unravel. Our plans and actions are crafted by our active investment in perceiving this future, interpreting this future and going ahead of this future here in this country and in terms of the global market place. We see the future through this prism of what we call four megatrends to which are visions and plans that should provide a response in the context of our local imperfections towards a nation that is the African paragon of economic flourish and nation building. Mr Speaker, allow me to talk about these megatrends to which we must respond as a country, nation, economy and as people. The first megatrend is that of urbanisation. The second is that of accelerating technological change. The third is that of an aging population globally. The fourth is that of greater global interconnections throughfinance, trade and people. These constitute fundamental disruptive forces that are changing economies at a historic rate. All these are relevant to Botswana. We should take stock of all these in shaping this new Botswana. Mr Speaker, let me talk a little bit about this urbanisation, accelerating technological change, phenomena of the aging population and the phenomena of greater global interconnectedness. We know that there is rapid urbanisation taking route globally and one that is shifting economic power from the more developed countries to the developing countries. Botswana indeed is and has been part of this megatrend. There is evidence that whereas the 9 per cent of our people lived in urban centres in 1971, more than 64 per cent lived in urban centres in 2011. We intend to aggressively target this large growing developing markets for export of our products and services. We also need to accept and embrace that the growth of our own urban population, both skilled and unskilled educated youth need targeted attention that is different from the one we did in the past as a nation. Mr Speaker, in terms of this phenomena of global technological change, we know that these new global technologies are changing the world as we know particularly in the emerging markets. In our case, we know that given our history of fixed telephony, we have only been able to achieve almost eight per cent penetration and with the new cellular technologies and sim cards, we have achieved penetration rates of more that 160 per cent as a country. This technological change has created a host of new opportunities including improved connectivity, application development and improved financial access through mobile money.

We the Progressives intend to drive technology and innovation strategy at the heart of all of our nation’s socio-economic development strategies to ensure our nation becomes and remains globally competitive. Mr Speaker, our demographic will not always remain the same as it is with the current concentration of young people. We the Progressives realise that our effort should go to inspiring a highly productive working population to ensure that it supports the growing aging population in the years to come. We will focus on attaining much greater employment levels and constantly upskilling our labour force. We also need to focus on restructuring how we finance our social sector for the long-term. Mr Speaker, in terms of our greater global connections, we know that there is international connectedness which is increasing global capital flows which have expanded 25 times in the 27 years between 1980 and 2007. Human capital today is more mobile both through physical export of labour and the increasing trade. We know that countries like India, Vietnam and the Philippines have employed hundreds and thousands of business processing, outsourcing jobs targeting western countries. This is why as the Progressives, we will focus on building foundational capabilities including skills and the business environment for Botswana to be globally competitive enough to generate tenths and thousands of jobs for sustained periods. We intend to be aggressively outward looking in search of transacting mass services with the outside world, investing in emerging markets, product exports to both emerging and developing countries. Joint investments with the outside world into Botswana enterprises and joint investments with other African countries to build and maintain infrastructures that create and sustain intra- African trade and investment. Mr Speaker, this global interconnectedness means that Botswana must have an outward looking policy that includes increased trade and investment. We as Botswana need to ensure that we are globally competitive as a country, that Botswana must build foundational capabilities including those of greater skills and the business environment to be globally competitive. Mr Speaker, I want to talk to what we call the general principles of some of the things that need to be done in order to catapult Botswana towards being this desert of flourish and African paragon of nation building. It is our acknowledgement of these global megatrends and the local realities that we have already outlined including the dire joblessness or jobless growth in our economy, including the income and wealth disparities, the deteriorating governance system, the deteriorating education system and the poor service delivery contextualising all these. These are the things that inspire what should be our principles in building and doing the things that we need to do as a country moving forward.

In terms of these principles, I want to talk to the first principle, which talks to the fact that this Country should build or focus on the sectors where Botswana can truly build global competitiveness and scale these sectors up. So that we can stand apart from other countries both in the continent and globally. This principle of focusing on these sectors, of standing out from other countries within Africa and globally, means a number of these issues. It means we need to select and consistently keep reviving these focused sectors to signal our clear intent to the global investment and talent market, that these are the sectors that we want to concentrate on as Government. It means we need to focus on sectors where Botswana has continuing advantages due to being more advanced than the other African countries, like we are in the financial services or having resources that can only be exploited locally such as diamonds, tourism and agriculture. Of course, as we have already pointed out these largely align with sectors that the Government has already identified, but has not systematically attended to. This talks to the need to focus on chasing opportunities that are significantly within our control. For example, we need to enhance our participation in the diamond value chain and do the same with other minerals, where we can do it feasibly. It means we need to invest in the infrastructure, mega projects, for enhancing connectivity, internationalisation and equality in the access to opportunity. It means we need to establish a high powered committee on what we call the new Botswana economy, to drive again what we call an Industry Transformation Programme to manage a systematic allocation of National Research and Development Innovation Fund and manage collaborations in the innovation and industry transformation. We are indeed aware of the recently established Committee on Innovation. We commend this effort as a step in the right direction. Mr Speaker, in the context of these principles we need to aggressively build and attract globally competitive work force. In this respect, we need to align our talent development with these four focused areas, including at university training level, secondary, primary, vocational and trainee- internship programme levels. It means as part of building and attracting a globally competitive workforce we need to build a talent path that supports these sectors, that includes the aforementioned skills development with clear targets for foreign labour participation and localisation targets. It means we need to invest in facilities, materials at primary and secondary school levels, in quality teaching and teacher training, better incentives for teachers and improved management and empowerment of the school management governance systems.

Mr Speaker, I move on to the next principle of how we need to have a clean, effective and modern governance system with strong institutions, not only in Government but in the private sector as well. This means that we need to leverage technology to build a world leading Government business interface including an information dissemination company and labour permit application, other licensing and taxation systems. We need to support the installation of high-speed broadband and drive usage through Government, so we drive down average cost. This broadband should be availed across participants in priority sectors particularly the clusters. It means we need to invest as we are to some extent in power and water infrastructure to ensure high capacity and redundancy for ordinary citizens and investors. It means we need to invest in a health care system that offers quality and timely wellness and medical care within cost. We need to invest in a transportation system that is safe, reliable and affordable. It means we need to nurture a security cluster that keeps our people safe and secure from internal and external threats including cyber threats. We need to support the SMME and cooperative enterprises, most of which are driven by women. It means we need to cater for the welfare of the elderly by ensuring a comprehensive pension and social safety systems. We need to introduce a fund for worker upskilling. We need to introduce a youth wage subsidy scheme. We need to invest in environmentally friendly enterprises and in environment sustenance programmes. Mr Speaker, that is an outline of our programme to foster inclusion. This means we need to invest more in people living with disabilities, particularly an education system that helps them develop to their full potential. These are the things we need to do in order to promote inclusion in our system. Mr Speaker, I want to talk a little bit about the economic clusters and what we need to do to bring out the best in them. We as Progressives, will focus on these sectors, where Botswana can build global competiveness at a scale to stand out from other countries, both in the continent and beyond. We are concerned that despite the consensus around some of these sectors towards which Botswana should focus, the current Government lacks the clarity and the initiative on how to build global competitiveness through these sectors or engines of economic growth. It is evident even in the manner by which Government reports on economic progress, there are no clear objectives for these sectors, neither are there investment, skills, revenue, employment, infrastructure development targets to facilitate these sectors. Mr Speaker, I want to talk a little bit about what we can do in the financial and business services. We intend to aggressively facilitate the expansion of financial and business sectors by leveraging and focusing on export markets for business process outsourcing, call centres, data centres, software and application development, big data, investment management, insurance and other services that create both the wide low-skilled employment of our youth and the narrow high-skilled employment for qualified professionals. We believe that this sector could generate hundreds of thousands of jobs for a period of six or seven years. We also believe that the value add contribution for this sector could be significant. Such employment or valueadded attainment levels will not happen on its own Mr Speaker. This is why we need to invest in facilities, including investing in this Botswana Innovation Hub, to ensure fast and easy business establishment. We have to coordinate efforts to bring external private equity, sources of funding and talent by co-investing in one or more regional funds. We need to repatriate some of our pension funds and encourage investment in local talent for both domestic and offshore management. We need to encourage establishment of parks with competitively priced broadband.

Tourism and Cultural Exports

Mr Speaker, we are concerned that our tourism sector is narrowly focused on the Okavango and Chobe, or on the high value eco-tourism. It is concentrated in the few highly capitalised hands. Our objective is for this sector to expand the tourism hub of the Okavango-Chobe-Makgadikgadi triangle, to include and move downmarket in selected areas to increase penetration and develop the South East corridor as regional meetings, incentives, conferences and exhibitions sector. We need to facilitate the increase in the capacity of our three to five-star hoteling and conferencing facilities and be able to hold simultaneously international conferences. We need to institute a programme for citizen investment in product development including cultural activities, restaurants, transport, entertainment and hoteling supplies in concentrated areas, including downtown Kasane, Maun and Gaborone.

Diamond and Mineral Beneficiation

Mr Speaker, we know that our diamond and mineral sector have for a long time being narrow focused on mining and exporting raw materials with little beneficiation. It is only recently that the relocation of diamond trading activities is beginning to assist Botswana claim some involvement in the diamond value chain, but even so, this is far from adequate. The diamond sector remains opaque for a majority of our citizens. One of objectives in the sector is to significantly expand access of citizens to participation in the diamond/mineral value chain and to establish Botswana as one of the top 10 diamond trading centres out of 20 globally and one of the top three within Europe, Middle East and Africa. While most of our aspiring entrepreneurs in this country queue for trading licenses in various sectors, it is rare to find someone who is knowledgeable about applying for a diamond trading licence. This is an example of an area where it should be possible through a coordinated industry transformation map to train, empower and retrain our citizens to become players in the diamond trade where it may be more difficult for other countries to compete. Mr Speaker, we need to develop our agriculture by investing in agricultural infrastructure so that large scale farmers can transfer their skills to smaller scale farmers. We need to be able to develop training in leather production and hide management, yield management and in the production of milk. Mr Speaker, still within these principles, we need to build and attract a globally competitive skill base. We have already indicated that we need to focus less on conceiving this idea of building an education system that is more managerial, technical and science based, and focus on the implementation of such an education system. Mr Speaker, we need to really focus on building this Government that is clean, effective and competent in what it does. That means we need to be true and serious about the idea of performance management and reporting about our economy. The Budget still does not report on the performance of these clusters. It still does not report back on whether these meagre projects are meeting their objectives or not, and whether all these efforts and plans to improve our education system are yielding results or not. We need to focus on a Parliament that works, that has the capacity through the establishment of a budget office to assess the economy and undertake its own economic impact assessment.

Mr Speaker, we need to focus and invest more on infrastructure. Indeed, there is a World Bank report that has already indicated that there is room for Botswana to increase its investment in infrastructure, from the current levels of below 10 per cent of Gross Domestic Product (GDP) to more than 12 per cent of the GDP. Botswana can afford to do that and that is requisite, if we are serious about transforming our economy. Mr Speaker, we need to be serious about establishing a world class delivery unit within Government. A delivery unit that has people with the expertise and experience to manage, monitor and communicate where we are and push projects that are fundamental to our development programme. Mr Speaker, inclusion will be not inclusion unless we have a way of financing it. We need to rethink on how we finance our social inclusion. There are models including the Singaporean model; from which we can learn to finance our social development programme. Mr Speaker, last year we indicated an indicative budget where we said that we need to spend less on military infrastructure and on the Directorate of Intelligence and Security (DIS). We need to spend more on home loan guarantees, infrastructure that is premised on developing the education system, on creating the international interconnectedness that we need as an economy to create this desert of economic flourish and African paragon of nation building. Mr Speaker, in terms of the recurrent budget, we need to incentivise our workers. We need to increase pay by 15 per cent with a view that in the years ahead, there will be more modest increases. Thank you so much Mr Speaker for this opportunity to paint the aspiration of our people as we generally see them. Thank you for according us the stage so we may continue to plead for opportunities for this nation and for our people.

I still believe and still have the conviction that we can do much better as the people and as a

*Presentation by Ndaba Gaolathe, President of Alliance for Progressives responding to Budget speech in Parliament on Monday

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