Not wise putting all our eggs in EU basket

| Thursday May 23, 2013 00:00

It is also a fact that since Independence, the EU has been an invaluable market for our exports, especially beef, minerals and textiles in more recent years. Compared to other markets, the EU offers some of the best prices for these commodities.

However, in the context of events in the past three years, it is highly debatable whether Botswana's economy should cling on and pursue the EU market with dogged single-mindedness. These events include the delisting of Botswana beef exports from the EU and associated industry-wide malaise as well as the recent blowback of negotiations for a new Economic Partnership Agreements (EPA).

Of course, the EU cannot be held totally blameworthy in both incidents. In the case of beef, it was the local agricultural sector that failed to adhere to laid down standards that the EU applies to worldwide supplies. In the case of the EPA negotiations, the EU has been benevolent to the extent of extending deadlines several years past the World Trade Organisation's demands, just to accommodate Botswana and other countries.

However, the events do bring the nature of Botswana's trade relations with the world's biggest market into stark relief. EU delisting was largely responsible for beef exports dropping from P868 million in 2010 to P462.4 million in 2011, exposing the frail Botswana Meat Commision's (BMC) finances and with that, the livelihoods of thousands of farmers, workers and associated stakeholders. The EPA negotiations, meanwhile, are due to come to a sudden jolt next January when the EU revises a scheme that will essentially remove preferential access Botswana is enjoying.

Both these developments point to the urgent need for policymakers to redouble their efforts to diversify trade markets, particularly given the prospect of higher entry costs for Botswana exports into the EU. New 'EPAs' are needed to not only tap into the African growth miracle but also target other global growth nodes in the Orient as well as the famous South-South trade objective. In addition, new global giants are emerging in the form of BRICS.

They require formulation of engagement strategies by local policymakers. Innovative and dynamic thinking is required at government level and the private sector to identify sustainable markets for the country's exports.In this regard, kudos to the Ministry of Agriculture and the BMC for aggressively targeting the South African beef market in 2011 and beyond, building a faithful customer base for local farmers.

Government needs to improve its responsiveness to private sector trade policy needs in order to support export firms whenever and wherever they find a niche for their products. Billions of pula have and are being poured into the development of airports and roads, and much more will be spent on the Kazungula Bridge and the Trans-Kalahari Railway. The diversification of export markets should thus be seen as the natural and logical way of optimising returns from this investment.

                                                    Today's thought''Tis the part of a wise man to keep himself today for tomorrow, and not venture to put all his eggs in one basket.'

                                        - Miguel de Cervantes