Diversification, key to sustainable growth
Isaac Pinielo | Friday June 3, 2016 15:14
This could be the reason why Moshie Ratsebe, director of investment promotion at the Botswana Investment and Trade Centre (BITC) suggested the need to diversify agricultural production and promote potential for investments.
He noted that the agricultural sector is envisioned as a source of economic growth and job creation.
“Surely, economic diversification holds great potential to increase Botswana’s resilience and would contribute to achieving and sustaining long term economic growth and development in the country,” Ratsebe said.
It has always been known that agriculture is the largest livelihood generating activity in the country, and that greater diversification of agricultural production frequently has been urged as a means of increasing agricultural income and thereby improving agricultural conditions.
However, Ratsebe regretted that the agricultural sector has been declining over the years.
Statistics show that the agricultural sector’s contribution to the gross domestic product (GDP) has been experiencing a decline from 42.7% in 1966 to 1.9 percent in 2014.
Ratsebe stated that opportunities exist in agro-industrial and supply-chain development, with specific investment opportunities being in livestock value chain, grain, fruit and vegetable value chain.
He said Botswana has traditionally been a fresh or frozen beef exporter to the European Union (EU), which includes the United Kingdom and Norway.
The other markets he mentioned are those of China and Africa. He noted that the cattle population in the country is 2.5 million head, with 80% in communal and 20% in farm lands.
“The Botswana Meat Commission (BMC) has capacity to slaughter 300,000 head per annum. There are opportunities in domestic production, feeds, and transportation for local and export markets,” Ratsebe said.
He further mentioned the potential for leather industry, citing that the leather park in Lobatse is due to operate in 2018. “Botswana is the net importer of pork products, traditionally from South Africa and Namibia,” he said. According to Ratsebe, the demand for pork products is at 1,500 tonnes, with local supply at 455 tonnes, which is 30% of domestic production.
He pointed out that the Southern African Customs Union (SACU) region has a net importer demand for the product, adding that piggery production, slaughtering and feeds create opportunities.
Also, he said, Botswana is a net importer of dairy products with local consumption of milk at 65 million litres. Local production stands at five million litres, representing five percent and the rest being imported.
Ratsebe indicated that this creates an opportunity for the expansion of domestic production of milk.
“The challenge is high feed cost, however, opportunity is in domestic feed production,” he said.
He said Botswana, as a net food-importing developing country, offers opportunities to boost production of basic commodities, such as cereals in the form of grain, sorghum and maize, as well as pulses in the form of dried peas and edible beans among others.
“The cereal national demand stands at 200,000 tonnes per annum with only 17% of this met by local production and the rest being imported,” said Ratsebe.
The other existing demand is of fruits and vegetables whose demand stands at 90,000 tonnes per annum, with a 51% of domestic production, with the balance imported.
In 2015, the import bill reached P72 billion, according to Statistics Botswana. Diamond constituted 36% of total imported products at P25 billion, followed by fuel representing 15% or P10 billion.