Forex rates harm BEMA members

Botswana Export and Manufacturers Association (BEMA) CEO Mmantlha Sankoloba has regretted the rising unfavorable foreign exchange rates, which negatively affect manufacturers.

Sankoloba said alongside the impact of COVID-19 on sectors represented by BEMA unfavorable foreign exchange rates was a major area of concern.

“As an association we have received numerous issues of pressing concern from our members. Some of our membership companies that source their raw materials from the United States of America have communicated with us that ever since the strengthening of the US Dollar, the price of inputs has escalated tremendously,” Sankoloba revealed.

She said the highly priced raw materials in turn have made outputs more expensive; thus making local exporters regionally less competitive. This, she said, has seen their sales dropping.

Local opportunities

Nevertheless, BEMA has seen a glimpse of hope arising from the restrictions imposed on the importation of face cloth masks.

“We have been incurring an influx in clothing that we are able to make locally and supply to retailers. The closure on importation of face cloth masks would assist local manufacturers in gaining increase retail market share,” she buttressed.

She remains concerned about the implementation of this restriction because it is important to capacitate cloth masks producers and assess whether they satisfy desires of clothing stores.

“We do not wish to see a situation where retailers are close out on local cloth masks as that will have a serious cost complications on suppliers. There ought to be a consensus between retailers and cloth mask suppliers before such a step is taken,” she stressed.

Citizen Economic Empowerment

With President Dr Mokgweetsi Masisi having rekindled the hope for Citizen Economic Empowerment Policy, BEMA’s priority area is for government to address land ownership issues.

Sankoloba said as BEMA they have made a recommendation for the government to consider including laws that prevent the sale and transfer of title of land so as to improve conditions.

BEMA says only land long leases should be allowed to protect the exposed.

Commenting on the shortcomings of existing programmes, Sankoloba insisted that some socio-oriented programmes overlooked business sustainability.

According to her, they focused more on poverty eradication than creating business opportunities that will enable business proliferation hence create mass employment.

“Regarding the growth of the manufacturing sector, the policies that play a key role are the Trade and Industrialisation Act. It also is known that Botswana has been treading slowly when it comes to the review of these policies,” she said, noting that it is pleasing that governments try to execute revised ones.

AGOA, BREXIT

The African Growth and Opportunity Act (AGOA) provides preferential market access to the US market, however there has been a slow uptake by Botswana manufacturers according to BEMA.

Sankoloba said there are different issues that need to be addressed in order to ensure full use of AGOA. In particular, she highlighted that issues around product quality and standards present as a major hurdle and have deterred local manufacturers from entering lucrative US market.

Her organisation co-chairs the AGOA reference group with the Ministry of Investment, Trade and Industry.   

BREXIT also poses danger to business opportunities that were preserved under the SADC-EU Economic Partnership Agreement which will cease to exist once the UK leaves the EU.

However, Sankoloba said there are separate negotiations with the UK under SACU and Mozambique to have a new trade agreement.