11 Mar 2013

Shoshong Member of Parliament has requested government to undertake a study on Chinese investment, business activities, their scope of interest in Botswana and the impact on the economy.

Presenting a motion in Parliament on March 8, Mr Phillip Makgalemele argued that there were conflicting perspectives on the increase of Chinese business in Africa and Botswana was no exception.

He said while communities regarded Chinese business as affordable compared to local goods, the local business community generally did not welcome such businesses because they gave unfair competition, particularly in construction and retail industries.

In the case of Botswana, he argued that since the establishment of diplomatic relations in 1975, bilateral relations between the two countries had gone through smooth and upward development.

He said exchanges and cooperation in the political, economic and social fields, had been frequent and fruitful; adding the two countries also shared common views and supported each other on major international issues with Botswana adhering to the ‘One China’ policy which he said recognised Taiwan as part of China.

Further, he argued that Chinese companies had been actively involved in economic development activities of Botswana with much emphasis on sectors of contracted projects.

Again, he indicated that according to the Chinese Embassy, there were 16 Chinese state-owned (SOEs) enterprises operating in Botswana, 13 of which were top construction companies all reaching the construction contractor top grade granted by the Public Procurement and Asset Disposal Board (PPADB)

“In total, they operate 18 projects in Botswana,” he said, adding besides the Chinese SOEs, about 10-20 private companies run by overseas Chinese were operating in Botswana.

Also, Mr Makgalemele contended that understanding Chinese success in penetrating the infrastructure sector in Botswana required a careful examination of the mode of entry, the role of Chinese government to support and the low-cost bidding strategy used by the SOEs and private firms.

Despite a few isolated problems, he said the overall benefits of Chinese engagement in the sector to Botswana have substantially lower the costs of infrastructure projects and created new employment opportunities for local people.

He said statistics showed that the number of local workers employed by the Chinese construction companies had reached 9 000. He also indicated that some local workers have used skills gained from such firms to start their own companies thus creating employment opportunities for other Batswana.

However, he said companies have come under scathing criticism from some locals whom he said argued that by lowering their bids, they crippled companies which may not have experience and expertise in the infrastructure industry.

The MP was also of the view that although government did not encourage Chinese investment in retail and wholesale sectors fearing possible damage to the manufacturing industry, Chinese goods which are generally cheap continued to flood the market.

“Despite providing job opportunities to Batswana, there is generally public outcry that Chinese goods are negatively affecting the local market,” he said.

Nevertheless, Mr Makgalemele indicated that entry of Chinese construction companies was useful in terminating monopoly of a few foreign countries, reducing tender price of contracted project to a much more reasonable level.

He also said through their excellent performance, Chinese companies had won reputation of strict contract execution with high quality. “More importantly, they also have created a large number of job opportunities for local people,” he added.

Again, he argued that although castigated for damaging the manufacturing industry Chinese wholesale and retail businesses had benefitted the local market.

He noted that some Chinese nationals were active in running businesses of garments, footwear, baggage, household apparatus, light-industrial products, food and vehicles, among others.

“They are all over the country and their existence has not only brought convenience to the local people, especially those residing in remote regions, but also helped in lessening the impact of mounting inflation facing the local economy,” he said.

Besides economic benefit, technology transfer and job opportunities to Botswana, Mr Makgalemele said various Chinese businesses had also contributed to social and community development of the country; particularly having donated over P2 million to HIV/AIDS projects, SOS village and other charity institutions.

Meanwhile, Mr Makgalemele has deferred a motion seeking amendment of the Botswana Constitution and other electoral laws. Gaborone Central MP, Mr Dumelang Saleshando also deferred a motion seeking a resolution to review the current Land Tenure system.

Mr Kagiso Molatlhegi of Gaborone South also deferred a motion requesting government to institute a commission of enquiry to investigate allegations of mal-administration and corruption at the Botswana Football Association (BFA) pending further investigation and consultation. ENDS