The Botswana Exporters and Manufacturers Association (BEMA) is a member based organisation which advocates for a conducive business environment for local producers and exporters. Established in 1995, the association has through consistent engagement and dialogue with policy makers managed to safeguard the interest of its members throughout the years.
In the last three years, the manufacturing sector has been going through a turbulent period characterised by massive job losses and shut-downs. Many investors have divested from the Botswana economy to seek alternative markets and set-up shop elsewhere. Investor confidence is low and the sector feels that the legislative environment has become somewhat unpredictable. Furthermore, excessive dumping and predatory behaviour from South Africa has placed many industries under existential threat.
With the size of the Botswana market, it is evident that growth opportunities for the sector can be realised through exports. It is difficult however, even with a good set of policies in place to support local producers, to capture even the local market, let alone secure export opportunities. BEMA believes that for manufacturer to master and reach the level of competitiveness required for long term sustainability in exports, they must have mastered the art of satisfying their own domestic market. A population of 2 million people is a good practice run for those with aspirations big enough to play in the global or even regional space.
The 2 million people however, must be serviced with good quality, competitive pricing and consistency. It is absolutely crucial that local producers are allowed sufficient access to the local market if they are to reach an export ready status.
Botswana is not necessarily an innovative economy, being a developing country, manufacturers compete primarily on cost as opposed to innovation or technology which is usually the case with more developed economies. It is therefore critical for the Government to support the growth of the sectors with knowledge of the fact that cost competitiveness is critical for the survival of manufacturing firms in Botswana. We encourage Government to focus its policy reform strategies on subsidising input costs and offering to incentivise manufacturers on that basis. Importers (of raw material) are already at a slight advantage due to the strength of the Pula against the Rand and the basket of currencies of some of its trading partners, but this is not enough.
Government must realise that the persistent lack of implementation which consistently appears on the agenda is a problem that will not go away. This is a major set-back for manufacturers as it renders excellent policies obsolete and therefore there is no benefit to those it was intended to support. Local procurement preference initiatives are not taken seriously and procuring entities continue to ignore and bypass these directives without consequence.
There has to be accountability and consequences for those who choose to circumvent these directives to the detriment of the private sector. More often than not, circumvention of directives intended to support local producers is a fire that is lit by the match of corruption.
Retailers play a big part in the growth and development of manufacturing in any emerging economy. The retail sector however, is often overlooked in conversations around economic diversification and growth in the manufacturing sector. Government must make an effort to encourage more support from the retail sector and attach conditions to their trading license requirements if necessary. BEMA believes that at least 30% of what is on retail shelves should be locally produced, with the exception of those products that are not available locally.
The sector is still recovering from the electricity and water crisis that was experienced in recent years. It is encouraging that this crisis seems to have been averted and those Government efforts to find solutions have borne fruit.
The sector recognises Government’s efforts in reducing the cost of doing business, development of SEZ’s, creating a one stop shop platform and recent economic stimulus initiatives that have boosted some sub-sectors. We are encouraged by the number of excellent policies that have been put in place; we have seen some effective reforms that have indeed benefitted our members.
BEMA co-chairs the AGOA Reference Committee tasked with formulating a response strategy for the renewed AGOA initiative to 2025. We are pleased to see that the strategy document has been finalised and are happy with the level of engagement and consultation. Members are confident and encouraged by some of the lessons learned and are confident that the new proposals and approach taken will bear fruit.
We must admit that the manufacturing sector has a lot of work to do; we recognise our responsibility to create employment for the people of Botswana. We take this responsibility seriously and as such we are willing to continue with our open and honest engagements with Government. Manufacturers in Botswana are ready for business. We have recognised the need for us to focus on quality and consistency in production and will be signing an MOU with BOBS in the next few weeks. We have engaged and developed positive working relationships with those whom we call our enablers and these are critical stakeholders to the sector and include the likes of BITC, PPADB and EDD amongst others.
BEMA is confident that given the opportunity to fully service the local market, both Government and the private sector, local manufacturers will surpass the expectations of buyers and consumers with their service, production and delivery capabilities. With the right mind-set and willingness to buy local, the manufacturing sector in Botswana will see exponential growth within a very short space of time. Business confidence will be boosted unlocking further investments from both foreign and domestic investors either starting-up or expanding existing businesses. Manufacturing will become more advanced, more innovative and more competitive in exports. Our greatest achievement in this process will be employment creation and economic diversification.