Going it alone is benefitting Botswana but ...

It is generally recommended for African countries that they should integrate their economies because limitations such as remoteness, size, fragmentation, transport logistics and weaker capacity to use financial and other services make it prohibitively expensive for them to operate as little islands.

However, Botswana is one of the few African countries that have defied this logic and blossomed.“The belief that regional initiatives would offer the scale to overcome the many challenges has not always been justified however. National and regional level implementation has been lethargic. Countries continue to miss deadlines and there are no measures to deter non-compliance. Sub-Saharan countries such as Mauritius, Rwanda, South Africa, Botswana and Ghana are members of regional blocs, but have undertaken substantial autonomous measures to improve their economies,” says the African Development Bank.

The evidence is in the rankings of the World Bank report Doing Business 2013 in which those countries rank from one to five within Africa and from 20th to 56th out of 189 countries overall. In the long-term though, it is in Botswana’s interest to work more closely with other countries in the region and on the continent in order to foster global value chain (GVC) integration that, as the bank says, could accelerate structural transformation in Africa. Currently, the continent’s contribution to GVCs (these being production networks that span many countries and in some cases, the entire globe) is a mere 1.5 percent.
Despite the effort that has been made, intra-Africa trade is still very low - 10 percent of total trade for the continent. On the other hand, intra-Asia trade is about 50 percent for developing countries only. The disappointing level of intra-African trade is a result of the low complementarity of production structures, trade barriers, and lack of infrastructure and integration into value chains. The AfDB says that this is partially attributed to lack of a reliable planning of value chain activities.

“There is no clear link with innovative policies and regulatory development to allow the continent to scale up value chains,” the bank says.
In the Southern African Development Community (SADC), the share of intra-regional trade has not changed much since the organisation was formed but is however, relatively high compared to other regional economic communities in Africa. A Botswana Institute of Development Policy Analysis study says that the low value of intra-SADC trade is because countries in the region are producers of similar agriculture and mineral exports for world markets with little domestic value added.

SADC’s Regional Indicative Strategic Development Plan (RISDP) articulates a roadmap for the region’s integration through the establishment of a free trade area (FTA) by 2008, a customs union in 2010, a common market in 2015, a monetary union in 2016, and an economic union with a single currency in 2018 but that is not happening.

Last modified on Friday, 20 June 2014 10:50

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