Economists call for �dramatic economic reform�
Isaac Pinielo | Friday May 5, 2017 14:27
These reforms, according to the experts, should be based on opening up the economy, deregulation and streamlining administrative procedures relating to all aspects of doing business in Botswana, for both citizens and foreigners.
A first quarter research for 2017 by economists at Econsult Botswana, Keith Jefferis and Sethunya Sejoe said the necessary reforms to the business environment are wide-ranging and extensive, and will change many of the current processes. “This is of course the whole point, simple ‘tinkering’ or worse, doing nothing will simply accentuate the process of declining growth and rising unemployment, with obvious implications for social stability,” they said.
The economists stated that because the business environment has deteriorated in recent years, and confidence has been undermined, drastic measures are needed.
They noted that if appropriate measures had been taken earlier, then the degree of change required would have been less.
“Drastic change is of course uncomfortable. There may be resistance from those who are fearful of change and perhaps from the few who benefit from the current inefficiencies and restrictions,” the experts said. They indicated that there must be firm timeliness and that Cabinet Ministers must be held accountable for implementing agreed policies, with change being led from the top, to ensure that the Office of the President is fully on board, and willing to undertake active mobilisation. “Without this, the change will fail, with disastrous implications for the Botswana economy. The biggest risk is that this fails and that the need for change, and the extent of change needed is not fully appreciated and supported,” the economists concurred.
Amongst the changes needed, the economists suggested reform of immigration regulations for foreign investors and workers, with a view to making them liberal, open, transparent, objective, and speedily and efficiently administered.
“Similar changes are needed for the visa system for foreign visitors,” they said. The economists also called for the abolition of trade licences, suggesting that licences should only be required where there is a public health and safety justification.
Also, they said there should be consideration on reducing the range of reserved economic activities from which foreign investors are excluded.
They also recommended liberalising land and property ownership regulations for foreign investors and reform of zoning regulations to allow more mixed-use development. The other change will be reducing the scope of environmental impact assessments for developments in non-sensitive areas.
They said there should be legal establishment of the ‘one government’ principle as well as introducing legally binding time limits for the consideration of applications for permits or authorisations, failing which silence will be considered consent.Introduction of regulatory impact assessments is another reform that the economists suggested, including a “bonfire” of existing regulations that are found to be unjustified, after review.
“This also needs to be accompanied by investment in appropriate infrastructure, especially that relating to e-Government,” they said.
The economists further stated that the proposed Special Economic Zones (SEZs) could be used as a vehicle for implementing and refining regulatory and business environment reform. Although the current focus of the SEZ policy is on infrastructure and financial incentives, the experts said this is insufficient, adding that the SEZs should be primarily “regulation free” or “regulation-lite” zones.
“SEZs can then be used to pilot regulatory reform that can then be rolled out nationwide,” said the economists.