The Minister of Finance and those who have shared their views on the importance of the 2023 budget speech, point to the fact that it marks the beginning of the two-year Transitional National Development Plan. It is the bridge between two National Development Plans (NDP 11 and NDP 12). It is also the first budget presented by the Minister of Finance who has been divorced from the process of Development Planning.
I propose to look at the 2023 budget speech from a different angle, separate from its relationship to the National Development Plan.
A recent survey by Afrobarometer indicated that the top most critical problem that Batswana would like to see addressed is Unemployment. I lay bare before this house President Masisi record after 60 months in office.
a) When President Masisi was handed over the levers of power in April
2018, the rate of unemployment in Botswana was 17.5%. The rate of unemployment has now risen to 25.4%. More Batswana are without jobs, more families are unable to have hope about the future than was the case before the Masisi presidency.
b) In 2018/19 youth unemployment was 28.8% and has been rising annually and now stands at 34.4%. We can therefore unanimously
agree that The Masisi presidency has been a source of despair for many
young people in Botswana.
c) Related to youth unemployment is the statistic for Youth Not in Employment, Education or Training (NEET) (which I prefer to call youth thrown into economic war zone). In 2018/19 Botswana NEET was at
36.1% and today stands at 39.4%. For the young people, more and more of those who are supposed to be the future of the country are being thrown into economic graveyards by the Masisi policies.
Botswana has for many years registered impressive economic growth rates. As the minister indicates in the budget speech, post Covid, Botswana registered the fastest growth to economic development than any other country on the continent. Having inherited an economy that has become notorious for high economic growth, a feature that has remained a characteristic of our economy soon after Covid, has the Masisi presidency used this to deliver a better life? The above question can be best answered by looking at two key economic measures, the rate of inflation and the Human Development Index.
At the time when President Masisi ascended to the high office, the rate of inflation was 3.2%. Five years later the rate of inflation is 12.4%. The
purchasing power of households has been seriously eroded and the cost of living has risen dramatically in the five years of President Masisi’s tenure.
Human Development Index
The HDI was created to emphasize the reality that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone. Development economists such as Todaro long argued that some macro-economic measures such as rate of GDP growth, may be deceiving in telling the true story on the state of the economy and the impact on the quality of life. A Pakistani economist by the names Mahbub ul Haq created the HDI measure in 1990 and it has now been adopted by the United Nation Development Program.
The HDI is a county’s measure that takes into consideration different factors such as the health of the populace, the quality of education, the standard of living and life expectancy. For Botswana the HDI score was
0.716 in 2018 when President Masisi assumed office. Five years later this has declined to 0.693
By his own admission in the 2022 state of the nation address, President Masisi stated that corruption was on the increase. Greed and the desire to use political influence for economic opportunities is the key driver for corruption in many countries. As they say, “A fish rots from the head”. Ever since making a breakthrough into the presidency, a search on the CIPA website shows that President Masisi became an instant hot potato in the corporate sector, assuming shares in private companies at a rate most entrepreneurs cannot match. This was not on account of any proven track record of business acumen, but rather the use of a public office to accumulate personal wealth. Public officers had no option but to sign off a presidential request to take over a government farm.
The president also unleashed his siblings who like him, had no proven record of running any viable enterprises. Public tenders worth well over a billion pula have been allocated to the President’s siblings in the last five years. Some of the tenders have resulted in legal tussles that have brought into the public glare how tenders are allocated on condition that part of the funds are channeled to the ruling Botswana Democratic Party.
The President and his family have launched an undeclared Radical Economic Take Over Policy whilst Batswana have to wait patiently for an Economic Inclusion Law that is not taking off since the law was passed over a year ago.
The Directorate of Intelligence and Security Services has now become a key player in the allocation of tenders. In the constituency of Maun West that I represent, the DISS directed that a legitimately allocated tender be withdrawn and allocated to a company that was P 300 million pula more expensive. The company that was correctly allocated the tender was paid over 1 million pula as settlement, a flushing down of over 400 million pula through corruption.
President Masisi stands out as the President who launched an unrelenting war against DCEC, the body created to fight corruption. He has taken to regularly changing the head of the organization to deny it stability of leadership. As if that was not enough, he has recently settled for the indefinite suspension of its Director General.
Overall economic conditions in Botswana
The key indicators that I have interrogated above can best be summarized by the legendary Nigerian author Chinua Achebe through his debut novel “Things Fall Apart”. Batswana have also said that things are falling apart in the recent Afrobarometer survey given the following findings:
a) 66% of Batswana believe that the government is managing the economy fairly badly or very badly, up from 33% in 2018.
b) 70% of Batswana maintain that economic conditions compared to 12 months ago are worse or much worse.
c) 73% of Batswana are of the view that Botswana is headed in the wrong direction.
Where to now?
As the BCP asked in its 2009 manifesto, “A nation at Cross
Roads, Which Way Now, Prosperity or Economic Collapse”.
Clearly the 2023 budget speech proposes no solutions that can match the enormity of the challenges that the nation faces. Judging by the deliberations of the BDP MPs who debated the speech on 8 February, their comments clearly point out to that there is no big announcement that could possibly come close to taming unemployment, improving the quality of our education and health sectors, increasing households’ incomes and combatting corruption.
What is the alternative under the dire circumstances, “Which Way Now?” The answer for me lies in the BCP clarion call of 2014, let us as a nation agree that now is the time to “Bring Back our Jobs.”
The Road Ahead and the Decisions we need to make.
Last year, the government banned the importation of vegetables. This came with some pain for the consumers, but the pain can be justified by the number of jobs that were created by the horticulture sector as well as the increased business for the local farmers. Over 10 years ago the government banned the exportation of metal scrap material which led to increased business for local companies that dealt with scrap materials.
Armed with the power to close our borders for any export or import out of the country, I propose that government should announce the gradual closing of borders for all unprocessed minerals, starting with the most sought-after mineral being the diamonds. At the present moment, Botswana exports approximately 80% of its diamonds without cutting and polishing them. It is common knowledge that for the diamond mining sector, the extraction of the diamonds is capital intensive whilst the cutting and polishing is labor intensive. Let us now as a country play in the space where the jobs are located in the diamond industry.
The Russia Ukraine crisis offers us an opportunity to assert our bargaining power in the global diamond market. Russia as the world’s leading player in the supply of diamonds is now shunned by the markets because of the war it has waged against Ukraine. In 2021, Russia produced some 39.12
million carats of diamonds, making the country the largest diamond mining country. In the same year, Botswana was ranked second with 22.9 million carats followed by Canada with 17.6 million carats.
Whilst Debswana sold 38.1 billion pula worth of rough diamonds in 2021, the sale of rough diamonds shot up to 54.9 billion pula from January to November of 2022, owing to a large part to the weakened position of Russia as a producer of diamonds. We are well positioned to flex our muscle in the diamond industry by directing that by the end of the coming year, 50% of our rough diamonds will not be exported out of Botswana. For the second year of the Transitional National Development Plan, we should direct that there will be no export of rough diamonds out of Botswana.
Only yesterday, President Masisi indicated at an event that he is aware that the Botswana diamond grows exponentially in value once it crosses the border. Why should we allow this exponential value growth to be the engine of economic growth in countries that import our diamonds? In 2013
India was reported to have 850, 000 jobs in the diamond cutting and polishing sectors while Botswana recorded 2,200 jobs. (Source: Statista). India only has one industrial scale diamond mine that has capacity to produce 84,000 carats per year. The Botswana production of diamonds in carats is significantly greater than that of India and we have decided for decades to create jobs in India whilst Batswana are unemployed. The Botswana diamond cutting and polishing sector has never employed close to 5,000 people.
A bold leadership that can make the difficult decision to bring back the jobs exported through our diamonds, copper, soda ash and silver would eradicate unemployment in Botswana. The timid and apologetic BDP government has no capacity to take such a decision.
Our neighbors in Zimbabwe announced on 20 December 2022 through their Minister of Mines that “No lithium bearing ores, or unbeneficiated lithium whatsoever, shall be exported from Zimbabwe to another country.” Lithium is used in the manufacture of car batteries, cellphones, tablets, solar power backup storage and other electronic products. Lithium is a strategic mineral which holds the key to global transition to clean energy such as the manufacture of electric vehicles.
1. Botswana as a leading player in diamonds for today and tomorrow
We must be mindful that diamonds are a finite resource. Our partner in Debswana has positioned themselves to be a player in the diamond market beyond the life of our mines. It betrays logic why the Botswana government has decided to be a by-stander and not participate in the lab grown diamonds market. De Beers has chosen the USA as the home to its synthetic diamonds factory. It is projected that the price difference between synthetic and natural diamonds will keep shrinking over the years with the possibility that artificial diamonds could become a more profitable product over the years.
The jobs created by De Beers in the USA for the manufacturing of synthetic diamonds, are jobs that should be relocated to Botswana as a condition for the Debswana agreements to be renewed.
2. Human Resource Development
Although the budget identifies the development of our human resource base as a priority, the reality on the ground is that our public education sector is in crisis. The clear collapse of our education sector is clear testimony that the pledge to deliver a knowledge-based economy was nothing but an empty promise. Over the past 3 years, the Junior Certificate results (Grade C or better) have stagnated at around 32%. Over the same years, GCSE pass rate (Grade C or better) has stagnated at around 30%.
The Botswana Human Capital Index has likewise stagnated at 40%. What this measure tells us is that a child born today in Botswana, given the quality of our health and education, will only realize 40% of their God given potential. This is the reality at a national level, it follows however that in some regions where the poor state of schools and health facilities is most chronic such as the northwest, children born in those areas will attain way less than 40% of their potential.
To address this man-made pandemic, we need to address the challenges of our education system starting with the foundational level. Pre-primary education remains inaccessible for many children in Botswana. For many of the rural areas the one (1) year orientation offered in public primary schools does not qualify as pre-primary education.
With only 17.3% of children accessing pre-primary education, the 2023 budget should take decisions that will significantly reverse this scenario. The budget for pre-primary and primary education has been declining. In
2021 – 2022 the pre-primary budget allocation was reduced by 64.5 % and the trend is continuing. As previously proposed, it remains our recommendation that government should allow for citizen owned pre- primary schools to enroll Batswana children on sponsored scholarships as is the case with tertiary education. Experienced teachers who wish to retire and set up pre-schools should be offered soft loans to address the low enrollment figures.
3. Social Welfare re-think
The BDP government’s attitude to social welfare is based on the Setswana saying “Lemme ga le bolaye”. It is an act of tokenism that must be appreciated by the beneficiaries, no matter how inadequate. It is therefore not surprising that the increments to allowances such as that of Ipelegeng are not even adequate to restore the 2017 purchasing power that has been eroded by inflation.
The biggest tragedy is when it comes to Old Age Pensions. The purpose of old age pension is to provide dignity in old age. It is universally accepted that the old cannot do much by way of economic activity and need to be assisted to access the bare minimum goods and services that one requires to survive from month to month. This cannot be an act of symbolism of “ticking of the box” as is currently the case. It is a moral obligation that every government must provide for the old who no longer have the means to assist themselves.
A country like Namibia with a population and economy that approximates that of Botswana pays their elderly an Old Age Pension of N$ 1,300 per
month and a bonus of the same amount every December. At the barest minimum, the old age pension should be increased to ensure that the senior citizens are not below the poverty datum threshold. Increasing the Old Age Pension to P 1,200.00 will result in an increase of only P 57 million to the national budget on an annual basis.
4. Investing in youth talent
Botswana is a country that is predominantly youthful. Granted, the youth benefit from budget allocations across sectors such as education and health. It however boggles the mind that with the Ministry responsible for Youth, Sports and Culture, whose responsibilities have been increased to include Gender, the provision for the Ministry is now being reduced by almost 100 million pula. How does Botswana hope to ever realize the opportunities that come with the demographic dividends of a youthful population? In Botswana, 71.57% of the population is below 35 years in age.
Where will the additional resources for increased pre-primary budget, youth and old age pensions come from?
There are many areas in the 2023 budget that offer opportunities to reduce the amounts budgeted. One clear example is the Ministry of Defence and Security. The mandate of the ministry has been reduced as Justice is now a stand-alone ministry. With the portfolio responsibility reduced, the Ministry allocation has been increased by over a billion pula (P 1, 317, 242,
370). The budget for the BDF has been increased by over P 800 million. Let us all understand that increased military expenditure does not lead to increased prosperity.
Unemployment in the case of Botswana is government sponsored. It is a result of failure by the BDP leadership that prefers to export jobs.
The uninspiring results from public schools are anchored not on the lack of effort by the students, but rather by bad policy decisions on the part of the government.
The low allowances for social welfare programs, are not on account of lack of resources, but rather a clear decision to underpay those taken care by the programs.
The good news is that the challenges we face can be reversed by a government that is committed to bringing back the jobs, turn around the education system, invest in the youth and not military.
The 5 years of a Masisi presidency has delivered greater unemployment, greater poverty, lower quality education, increased corruption ansd a collapsing economy.
*Response to the Budget Speech 2023 Delivered by Member of Parliament for Maun West