· FDI generates P3.2 billion from 2018
· New export markets on the cards
· EDD, AGOA market remain a challenge
The Minister of Investment, Trade and Industry (MITI), Bogolo Kenewendo says the strategies that the ministry has adopted such as ease of doing business reforms as well amending some of the trade laws are paying off.
Kenewendo said the Ministry has refocused its implementation approach through a Purposive Apex Model to ensure coordinated approach towards SMEs, Investment Promotion and Export development.
She was addressing the media on Tuesday to share her ministry’s achievements and hiccups so far.
Kenewendo said since April 2018 to date, a total of P3.2 billion has been raised through Foreign Direct Investment (FDI) against the initial target of P2.3 billion.
This, she said, is from a cumulative of nine investors who created 7 000 jobs in the process.
She emphasised that the positive FDI inflows were as a result of a number of companies investing a significant amount of money under the International Financial Service Centre (IFSC).
Moreover, she said the bullish mining sector also contributed significantly to FDI inflows. From local perspective, a total of P3.448 billion worth of Domestic and Expansions investment was achieved in the same period against a target of P2.8 billion.
Kenewendo said her ministry has secured new export markets for Botswana products in the expanding East African Community (EAC) market. The acquisition of the new markets, she said, follows the tariff negotiations that were concluded under the auspices of SADC-EAC-COMESA Tripartite Free Trade Area Agreement (TFTA) recently. The goods to be exported under trade deal include beef, processed salt and plastic tubes.
LEA incubators profitable
Under the SME Apex, the ministry prioritised entrepreneurship and advancement of Small and Medium-Sized Enterprises (SMEs) as catalysts to achieving economic growth and development as well as economic diversification.
Kenewendo said LEA factory shells have been refurbished across the country to make them operate as incubators and centres of excellences, a development that is currently yielding positive results.
She maintained that a total turnover of LEA incubates reached P8.82 million against a target of P6.80 million with 138 jobs sustained by SMEs stationed within the LEA Incubators.
LEA Chief Executive Officer Dr Racious Moatshe said the incubators have proven to be an engine for SMEs boost, though most SMEs still grapple with a challenge of lack of market.
EDD procurement bumpy
Minister Kenewendo said the Economic Diversification Drive (EDD) strategy which has been conceptualised as an effort to promote buying of local goods is yet to flourish.
The objective EDD was to reduce the high import bill by leveraging on the huge Government purchasing power to promote production, procurement and consumption of locally made products and services, and agricultural produce. Nonetheless, she insisted that the necessary impact has not been felt in the economy due to slow uptake of locally produced goods and services with the buying rate standing at 53% currently.
“In this regard, my Ministry through its different Parastatals has developed some initiatives including incubation programme, Centres of Excellence and the Project Facilitation Fund to support industry development. There is lot of non-compliance towards EDD procurement, hence the reason why it is not effective,” she added.
AGOA export collapse
Another hiccup that has been noted is the difficulty by the local textile manufacturing companies to penetrate the lucrative markets via African Growth and Opportunity Act (AGOA).
Permanent Secretary Peggy Serame admitted that local textile manufacturers struggle to sell in the American market because of competition from cheaper East Asian countries.
She said local manufacturers do not succeed in the AGOA markets due to their low production level therefore failing to meet timely the demands of the USA market in most cases. She remained optimistic that new strategies will be drawn to ensure export sustainability.