09 Apr 2017

Government has been encouraged to make reforms and allow for greater freedom to the private sector to have a significant role in driving the economy.

Addressing stakeholders at a Standard Chartered Bank Outlook breakfast meeting recently, chief economist Africa for Standard Chartered Bank, Ms Razia Khan said government could be the only and major entity that did everything with regards to driving the economy.

She said Botswana had been complacent with making reforms to drive the growth of its economy and this was due to past success.

“When Botswana first discovered diamonds, the country’s growth was significant and that also had a negative impact because the dependence on a single commodity took centre stage, hence other sectors that could drive the economy were not addressed and explored,” she said.

Ms Khan said Botswana’s economy was at cross roads with regard to its environment for businesses to thrive and attract foreign investors.

“Take for example Rwanda; the country opened itself to Africa and said Africans get VISAs on arrival at the airport and it only takes five minutes. That alone has placed Rwanda as a gateway for business, hence its growth and making strides to even overtake Botswana,” she said, adding that Botswana’s performance indicators have been moving towards the negative.

She said government’s involvement in almost all the sectors was worrying and needed to be addressed as a matter of urgency.

On South Africa’s recent credit rating to junk status, Ms Khan said its implications for Botswana would be felt at Southern African Customs Union which was Botswana’s second revenue earner.

“Slowdown will be felt and Botswana also needs to do more in reassuring investors with regards to its own economic outlook as it is not generating expected outcomes,” she said.

Ms Khan said Botswana needed to transform its economy and move away from being a middle income country.

“Before I came here I spoke to one of my counterpart who is an economist in China and I asked him about what he thought of Botswana and what he said resonates with many people outside Botswana.

He said Botswana was a country that saved a lot so its citizens did not have to, adding Botswana has had reserves for many years and now the challenge for government would be quality of spending.

She said it was important that government saved money owing to its already high expenditure, but expected outcomes were not being realised, adding it was disturbing that Botswana indicator on starting a business had fallen 63 per cent over five years.

“Registering property, VISAs and other documents that one needs to start a business are in the negative and this affects investor confidence in this country,” she said. ENDS