The Stanbic Chief Executive Officer (CEO) Samuel Minta has revealed that for Botswana to attain a sustainable upper income status through the national vision 2036, there has never been a greater need to drive a well-diversified export base.
“The last time I checked, and I stand for correction, almost 80% of foreign exchange earnings is driven by diamonds. This is a greater problem statement that requires urgent attention, not just from government, but through an honest collaboration between private sector and government,” said Minta.
He said, “We see this event as laying the foundation for a sustained future collaboration towards an inclusive and sustainable growth in exports and businesses that contribute to the growth of the national economy.”
According to banking officials a thriving economy and private sector need a supportive financial sector, willing to innovate and able to take strategic risks. Stanbic Bank is therefore determined to play that role in Botswana. In doing so, we are frankly preserving our own long term sustainability.
The Botswana economy has traditionally been export-led in terms of the generation of economic activity and growth, and exports also underpin the balance of payments and government revenues.
Diamonds have long been Botswana’s leading export commodity, and remain as such after almost fifty years. But this is not a long-term sustainable solution. The diamond industry remains healthy, and is likely to be so for many years. But in some senses, it has reached a plateau, and hence we need diversified drivers of growth in the future.
Given the small size of Botswana’s economy and our domestic market, exports will always be key growth driver. Hence, we need to focus not just upon economic diversification, but particularly export diversification. A particular advantage of exports is that the growth potential is almost unlimited, once we can successfully penetrate regional and international markets. Therefore, export success is one route by which we can collectively generate large numbers of jobs.
For firms to be successful in export markets, they need to be competitive, efficient, and abreast of developments in international markets. This provides an important channel for best practices with regard to product development and technology to be introduced into our economy, thereby enhancing our overall productivity.
“A further hallmark of the government’s approach is enhanced consultation. We are well aware that as government, we cannot know everything about the private sector’s needs and the challenges that firms face. While there are various communications channels in place – the HLCC, the biennial National Business conference, and others – there are relatively few opportunities for government to come face-to-face with large numbers of firms, where the managers or owners of those firms can talk with government and official agencies directly,” said Bogolo Kenewendo, Minister of Investment, Trade and Industry.
She said, “Hence this event is very welcome, as it enables just that. I can assure you that we will listen to what you say today, and attempt to address the challenges identified, as we have a common interest in sustained and sustainable growth.”
According to officials a quick look at the export data shows that there is small but significant level of export earnings across a wide range of manufactured commodities – classified under the categories of textiles & garments, metal products, machinery, plastic goods, vehicle components, chemicals etc., in addition to traditional exports of diamonds, other minerals, and beef.
Kenewendo, said “What is more, our manufacturers are significant creators of jobs, and have higher average wages than many other sectors of the economy. So we have a number of manufacturing export success stories. If we can find out what makes them tick, what underpins their success, we can hopefully work on reproducing those successes and making our export manufacturing sector much larger. And, of course, we would like our successful manufacturing exporters to become much more successful, hence our desire to understand what is stopping them from becoming twice or ten times their current size, and creating twice or ten times as many jobs.”
Kenewendo maintained that, “Whatever Government can do to identify and remove barriers to growth, government will address”.
“We can diversify exports by building on our mining sector though new minerals and through beneficiation, such as diamond cutting and polishing. We may be able to export the products of agriculture and agro-processing, beyond beef. We are already successfully exporting services, particularly tourism, but also financial and business services,” said Kenewendo.
