Harnessing Botswana’s competitive advantage

Lewanika Timothy | Monday July 8, 2024 06:00

Mmegi: The recent world competitiveness rankings revealed the strengths and weaknesses of Botswana across an array of economic factors. Which areas do you think are worth harnessing in order to increase the competitive advantage of Botswana?

Caballero: There really is no defining factor for competition. There is really no one model for advancing competition. What we have observed is that different countries use their own unique advantages in order to foster greater competitiveness.

In the case of Botswana, it will be a matter of choosing areas where the country is most advantaged and using these areas as possible economic game changers for the country. When you look at nations like Switzerland they knew they have a small population but they also knew they could do exceptionally well in building infrastructure that would anchor the economy to attract a vast number of services.

Mmegi: Seeing that you have mentioned the models adopted by countries like Switzerland, one of the main problems with attracting investors to Botswana has been the low population of less than three million people. This has been deemed a disincentive for companies seeking to set up here. How do you reckon this can be overcome?

Caballero: Let’s look at a nation like Estonia. They have a population of less than two million people but they have done well economically and risen through the ranks of competitiveness for many years. Their secret was attracting international talent to come and spark innovation and enterprise in the country.

Countries with low populations like Botswana need to focus on attracting talent that can set up start-ups that will grow to become unicorns. The strategy of attracting large firms only works for countries with large populations but for countries with low populations, it is best to attract talent that will invest in start-ups and create value from the grassroots.

It’s very obvious that a company like Boeing, for example, won’t come and set up in Botswana but if the target is innovation and creativity, then the country will stand a better chance at pushing innovation.

Mmegi: In the latest world competitiveness rankings what can you say are Botswana’s outstanding competitive areas that can be used to elevate the nation’s rankings?

Caballero: Botswana’s strength is spread across all four factors but it has done incredibly well when it comes to price. The cost of living in the country is very low and despite problems with inflation, the government has proved to be very competent in managing economic phenomena.

And it’s not just price, the country outpaces its competitors when you look at its tax policy and it has a growing youthful labour market. This is now an opportunity for the country to attract talent and spur entrepreneurship in the country. Just like Estonia, Botswana enjoys a high quality of life so it is best served to attract the talent that is needed to drive the economy.

Mmegi: One of the main ambitions of the country is to become a knowledge-based economy. Looking at Botswana’s rankings in sub-factors such as education investment, education outcome, innovation, and product creation, do you think this is a realistic goal for the country considering the short timelines the country has set for itself?

Caballero: The time frame is tight and in the same light it is not impossible; economic growth would have to be consistent.

Yes, the country has been investing significantly in education spending to upskill its citizens and this is reflected in the high literacy rate the country enjoys. The indicators, however, show that the quality of education is not at par with other countries.

In the quality of education at lower levels, the country ranked position 61 out of 67 countries. The goal should be to teach children computing skills and advanced science skills at lower education levels and this is pivotal for a country that wants to become a high-income economy.

Natural sciences are king for any country with the ambitions of Botswana. But you must also consider the impact of existing natural science graduates on the economy. Do they have opportunities to engage in research and development and is the economy providing opportunities for such graduates to create value in the economy?

Mmegi: One of the problems in Botswana’s economy has always been that government seems to muzzle out the private sector, with government being the main actor in the economy leaving no room for the private sector. How do you reckon the country can overcome this hurdle?

Caballero: One of the main tenets of competition is that government must be an enabler and not a main player. In principle, competition theorists think of government as an enabler through providing services like infrastructure. The expected outcome is then that the private sector should be dynamic enough to leverage government’s services to create goods and services that can benefit the economy.

Government should limit itself to reform and policy and allow the private sector to have leeway to develop the country.