How Botswana can take advantage of the COVID-19 pandemic
Mphoeng Mphoeng | Friday April 17, 2020 10:17
Just like the World Wars though, this pandemic has forced responses that challenge the status quo and predict that life and business will change post the pandemic. For Botswana, this is no different. The pandemic has put front and centre our deficiencies as a country and economy: our over-dependence on imports and especially South Africa, our lack of citizen ownership in big business, our poor uptake of technology in business and education and our deficient health sector. Whilst all of these have always been known in the past, the pandemic has forced the political will to deal with them that is unprecedented and should be used wisely.
Below are my thoughts on the challenges and opportunities these present and how I hope the government will respond to them:
Over-dependence on imports, especially from South Africa is one of the biggest risks to Botswana’s ability to maintain normality. The fact that Botswana imports almost everything it consumes, especially for manufactured consumables, fruits and vegetables does not bode well for the economy. Whilst economic diversification has been encouraged in the past, the situation has never been truly dealt with forcefully and creatively.
The Economic Diversification Drive Policy of 2012 waxed lyrical and provided solutions but failure to implement it meant it never got off the ground. So after much effort and policy making, we still find ourselves beholden to RSA for our survival. This therefore puts us in a situation where if this pandemic runs for an extended period and any supply disruptions happen in SA, we could experience shortages in Botswana or increased prices for basic food stuffs and produce.
The leadership of the country has realised this and quickly put together a programme to encourage manufacturing and farming with assistance pledged from CEDA and government committing to offtake. Whilst these are not new efforts, there does seem to be a different political will to actually put their money where their mouths are. Over the years we have heard of many fantastic policies for citizen empowerment and Foreign Direct Investment (FDI) but these have always been at a theoretical level.
The promises made by BITC and SPEDU have always proved difficult to actually take advantage of. Policies such as 30% offtake promised by government, have not really been implemented. The reality is government is the largest client for any manufacturer in this country and without it committing to purchasing product, viability and ability to raise financing will always be a challenge and make local companies uncompetitive with imports despite numerous structural incentives.
It is therefore imperative in trying to change this current scenario that government commits and acts on long-term offtake of manufactured goods and produce. Government should also repeat the exercise done two years ago of banning imports of bottled water to other products, which will force local consumers to become dependent on local products. While cost and possibly quality may initially be uncompetitive, these will improve over time. Government must provide a conducive environment for our producers to compete by committing to buying local tooth paste, canned food, cooking oil, packaged rice, toiletries, cutlery, juices, paper etc on top of the essential medical supplies we see. These interventions will favour economic activity, reduce unemployment and spur GDP growth.
Lack of citizen ownership in Big Business is a hindrance to a self-reliant economy. Despite our Citizen Economic Empowerment efforts, Botswana is largely owned and controlled economically by foreign interests some of whom have naturalised upon realising how lucrative Botswana has proven to be for them. Unfortunately, we have seen the response of some of these owners during this pandemic prove to be less than honourable, showing that for all the riches gained in Botswana, the country and its citizenry are not priority. This pandemic therefore provides an opportunity for us to make changes in many industries such as education, banking and financial services, tourism and hospitality, fuel, farming and manufacturing.
Tied to the first point on reducing dependency on SA, Botswana now has an opportunity to also reduce its dependence on foreigners. Regulators such as Bank of Botswana need to adopt more progressive licensing procedures to encourage local participation (backward and onerous BOB licensing policy is the only thing that has hampered locals from starting a citizen bank. Even efforts by local parastatals have been stifled by this stance. You will also see this backward approach stifling innovation in mobile money efforts. The reason we don’t have innovation in this space on the levels of Kenya is none other than the backward onerous conservative policies of BOB).
It is important though that as government provides increased opportunities for citizens, it must do this in a coordinated conscious manner. Botswana continues to be one of the most economically uneven countries in the world and all these efforts must ensure they do not benefit the already wealthy only. The current response has been capitalistic i.e. people approach government and CEDA with businesses to be promoted. This capitalistic approach will likely benefit the political elite and the already wealthy connected families and the one percent.
This is government’s opportunity to create and empower NEW 100 millionaires. Therefore government should rather create a list of all industries and businesses it will support and then select a few Batswana to incubate and grow in these areas. How this can be done is debatable and controversial but if we don’t attempt to do it, all we will do is enrich the already rich because with the current model, the average Motswana will struggle.
Poor uptake of technology is another area. This pandemic has highlighted our lack of technology uptake as government and business. Our business models and processes have highlighted how we are still dependent on manual processes that require us to be sitting in offices to execute them. This has therefore reduced our extreme social distancing efforts as it feels like a large number of people still cannot work from home. This is mostly apparent in our education sector, which has been forced to come to a halt and risk wiping out a whole academic year. Lack of infrastructure and content for school children means it is impossible to assist most students during this time.
Other significant glaring examples include having to shut down services such as national registration, transport services, land transfers and others. Worst of all is the glaring lack of data about our people and economic activity. Our lack of registration of the informal sector and property landlords is forcing us to do manual registration of people further enhancing the possibility of transmissions. This has also frustrated government efforts where payments to businesses and even social grants should be much easier and automated.
Our initial permit registration system also displayed how far we are from realising our Fourth Industrial Revolution aspirations. Even health care could be have taking advantage of technology by being able to do check ups and consultations online and avoid people having to physically go to doctors. This would also have benefitted pharmacies if online payments and delivery systems were in place. The world would not have had to stop had technology been working properly. This also extends to retail which forces people to go to shops every few days.
This pandemic therefore provides a good opportunity for the country to speed up and change how it works to avoid disruptions to business in future. This is the opportunity for technology companies to be asked to step up and provide solutions to our data and process inefficiencies in spaces like permit applications. Tied to the second point above, government must be conscious in incubating and growing these efforts.
Whilst it was commendable to see BITRI being tasked with doing an e-permit system, it was a missed opportunity by government to empower a young Motswana business considering there were plenty of people who were offering to provide this solution, some even for free. The resultant use, advertisement and confidence-building of a local company would have proved invaluable for the tech industry post the pandemic.
Government and businesses should take this opportunity now to create a list of ‘needs’ to be provided to the tech industry with a view and commitment to using them and uptaking them in the same manner as being done for manufacturing and farming. This will allow Botswana to leapfrog into the Fourth Industrial Revolution and exit this pandemic with a working e-Gov platform and increased innovation in business.
In conclusion, whilst this pandemic is overwhelming and will prove to be disruptive to our economic progress, it does also require us to step back and realise that there will be life beyond it. It is also forcing us to face our biggest deficiencies and problems and find quick ways to combat them, albeit in less than ideal circumstances. For the country to emerge from this pandemic stronger, we do need to be conscious about every effort and ask ourselves what kind of Botswana we want to see operational after the pandemic. I hope to see a largely self-reliant technology-enabled Botswana with economic ownership in the hands of citizens and with wealth spread out to fight inequality and grow employment. This can all be achieved.
*Mphoeng is currently employed at University of Botswana as a lecturer in the Department of Accounting and Finance at the Business Faculty. He holds an MSc in Finance from Manchester Business. He also works with the pioneering local data science company called Spectrum Analytics, where he is involved in steering Botswana into the Fourth Industrial Revolution. His career started in 2006 at the Bank of Botswana where he held numerous roles in the Financial Markets Department between 2006 and 2009.