19 Aug 2018

The second economic transformation may remain a challenge if Batswana do not become competitive, an economics pundit for E-consult Botswana, Dr Keith Jefferies has warned.

Giving a presentation on Botswana’s changing economic landscape at the 10th Botswana Institute of Chartered Accountants biennial conference in Gaborone on August 16, he warned that the first economic transformation of dependency on minerals was unlikely to drive the economy in future.

He said Botswana was lucky to be endowed with mineral resources that had been a foundation for current economic activity and income levels, adding that there was no guarantee that minerals could continue sustaining the country hence Batswana should change the way of doing things.

He implored Batswana to move towards a broad based export led economy as the country moved towards the second economic transformation away from dependency in minerals.

“Batswana should invest in producing a wide range of goods and services for export to regional and international markets,” he said.

He said “eating diamonds” would not provide the basis for Botswana to move from upper middle-income status to high-income status as the mining sector had not grown for a period of a decade.

His bone of contention was that Botswana did not, in general, reach upper middle-income status by being productive, competitive or efficient though there were some pockets of economic activity that demonstrated some of those elements.

“We reached it by consuming and investing wisely the proceeds of the natural resources that were used wisely,” he said.

In this regard, he said there was need for fundamental change, so that productivity, efficiency and competitiveness become the basis for growth of economy and diversification.

Dr Jefferies also said dependency on government was unsustainable because government would not be able to do so without other revenue source injected into the economy.

He also said domestic market for goods and services alone could not lead to economic growth in the long term, citing that the only option was non-mining exports, which must replace mining exports.

“This is a challenge for the second economic transformation,” he stated. ENDS