EU trade deal key to FDI attraction
Brian Benza | Wednesday August 27, 2014 12:54
The EPA, signed after years of intense negotiations, gives products manufactured in Botswana and six other SADC countries duty and quota free access to the highly lucrative 28 member market.
Speaking at a media ceremony held to mark the end of his assignment in the country, McGovern said the deal gives the country unlimited access to the EU and Botswana can use this platform to promote the country to foreign investors.
“Apart from the direct benefits which can be enjoyed immediately, such as duty and quota free access, for Botswana beef and other products to EU, the EPA is a window to global investors which other middle income countries in Latin America and Asia do not have. The EPA can also work as a catalyst for regional integration as goods can be manufactured in different countries within the region and be exported under the SADC-EU trade compact. In reciprocation, Botswana can also tap into European science and technology to enhance its home grown industry and the economy,” he said.
Data from the United Nations Conference on Trade and Development (UNCTAD) suggest that in the recent past, Botswana has not attracted as much FDI compared to other countries in the region. In 2013 Botswana attracted $188 million in FDI, only doing better than minnows such as Lesotho, Swaziland and Seychelles and Malawi in the East and Southern Africa region. Botswana and other SADC states have been negotiating the new trade deal with the EU for 13 years, missing the first deadline of December 2007 set by the World Trade Organisation.
SADC and the EU also missed another December 2010 deadline for the resolution of the complex, political and economically sensitive talks.
The negotiations included five SACU countries: Botswana, Namibia, Lesotho, South Africa and Swaziland and two other SADC countries Angola and Mozambique. After initialling of the deal in July this year, Botswana can immediately enjoy the market access, although McGovern says the final ratification by both sides can take upto to a year to complete.
“After the July signing, lawyers from both sides will now engage in what is termed ‘legal scrubbing’ where the texts from the agreement will have to be adopted and then ratified by authorities in the EU and the different SADC members states. This process can take upto a year but Botswana’s market access is already safeguarded,” said the ambassador in an interview with Mmegi Business.
During his tenure in Gaborone since February 2011, McGovern says he has supervised the implementation of development cooperation programmes in Botswana worth more than P1.5 billion, mostly dedicated to the education sector as well as to health and public sector reform. In addition, support to local NGOs and small and medium businesses has been significant. A new programme for Botswana for the period 2014-2020 worth some P400 million was also approved during his tenure and a package worth one billion Pula for regional initiatives in SADC is at an advanced stage of approval.
McGovern will be succeeded by Alex Baum, currently Head of the European Union Delegation to Malawi, who will take up his post in September.