Botswana Exporters Manufacturers Association has maintained that the recently signed African Continental Free Trade Area (AfCFTA) should not cripple the local industries. Mmantlha Sankoloba, the Association’s Chief Executive Officer said despite the signing of the agreement being viewed as a symbolic step, “there is still a long way to go to realize the finer tenets of the agreement.”
She warned that presently each African country and regional bloc has several trade agreements with various partners, hence it is important to tread with care on the opportunities presented by the platform. “We still have to interrogate the agreement, and advise our membership on how to get the real meat from the bones in this new development.
“Eliminating all tariffs in the free trade could be problematic, but our view is that, as long as the majority of tariffs that affect our members are scrapped, we will see value in the agreement, from an export and manufacturing sector point of view,” Sankoloba emphasized. Though AfCFTA is expected to make it easier for Botswana companies and other African companies to leverage economies of scale in new markets, Sankoloba wants protection of local industries to continue. “Botswana would still have to protect local producers and industries, impose periodic export restrictions in certain products while the implementation of the agreement gains steam,” said Sankoloba.
She further said the Association hopes that the decision to sign into AfCFTA is backed by evidence. “Lest we join just because other countries are joining, without us realizing much benefit from this, given our membership to so many economic blocks,” said Sankoloba.
However, BEMA hopes that the agreement has the potential to impact the local economy positively, including boosting trade, manufacturing and exports, job creation and poverty alleviation, and impact the local Special Economic Zones.
“We think that the types of exports that would gain most are those that are labor intensive, such as manufacturing and exports, which bodes well for our membership,” said Sankoloba.Despite the local economy’s small population, BEMA believes if positively done AfCFTA opens up infinite market access opportunities for the Association’s members and infinite networking opportunities as well as a chance to exploit the continent’s intellectual resource base.
The specific objectives of the AfCFTA, for purposes of fulfilling and realizing the agreement are that signatories shall progressively eliminate tariffs and non-tariff barriers to trade in goods as well as to liberalize trade in services and cooperate on investment, intellectual property rights and competition policy. They also envision to cooperate on all trade-related areas and customs. Botswana becomes the 51st country to sign the AfCFT, governed by variable geometry, flexibility and special and differential treatment, transparency and disclosure of information.
Local economy players are exponentially warming up to the buzz as technology continues to drive the world’s 4th industrial revolution.Though dialogue on technology has been part of the economy for a long time, the story line is fast gaining traction. Stakeholders are now pinning their hope on digitalised economy. More calls are coming from both within government and private sector to absorb and leverage on technology.
“We need to plug in and realise the results of trading and living in a global village,” said Mmantlha Sankoloba, Botswana Export Manufacturers Association (BEMA) Chief Executive Officer. BEMA hopes that ‘e- gov’ strategy intentions to move all appropriate government services online for greater quality and convenience will happen soon.Sankoloba said the integration of digital data, will allow citizens or businesses to access most government services at any locality, online through mobile phones and personal commuters.
“This will, hopefully, end the absurdity of citizens and businesses having to travel vast distances, or shuffle between different ministries and departments, to access basic services,” said Sankoloba,
However, Sankoloba also challenged the nation to improve the business environment through re-engineering its processes.“As BEMA, we hold the view that the use of technology will not yield the desired results if we do not introspect and ascertain that our processes are customer centric,” said Sankoloba.Commenting on the digital industrialisation, Rosinah Bontsi, acting deputy permanent secretary in the Ministry of Investment Trade and Industry said the era has ushered in new opportunities for entrepreneurs to access new markets and to join global value chains.
“Jobs are being created and new business models are emerging,” said Bontsi adding that some economies have benefited from widely adopting electronic commerce and digital trade.She said digital industrialisation has emerged as a major driver and enabler of innovation, economic transformation and development. “The pace of digitilisation and technology has come at an accelerated speed, and bringing new risks and challenges for those that lack the capabilities to compete in the digital economy,” said Bontsi. Bonsti said the local economy needs to ensure that the digital economy is truly inclusive. “We need to have a clear idea of where we are and where we want to go,” she said.
Her remarks were echoed by Botswana Innovation Hub’s (BIH) Director of Marketing and Partnership, Tshepo Tsheko emphasising that the world has seen the value in digital. “Everyone is talking digital, any business that is not moving into digital, in the not so distant future will be out of business,” said Tsheko.BIH is on record announcing its intentions to make digitisation BIH’s flagship project through sustainable partnership with several stakeholders. Meanwhile Tsheko said both government and private sector have to embrace youth who live and breathe technology in the efforts to compete on the global 4th industrial revolution.
The Botswana Export Manufacturers Association (BEMA) said the local industry should swiftly respond to expanding e-commerce and e-platforms in the region.
The Association’s Chief Executive Officer, Mmantlha Sankoloba said the electronic supported trade presents a huge market potential for logistics service providers that are able to respond to new consumption and supply chain trends.
She said the e-commerce and e-platforms are also hinged on growing demand in the region for high-end consumer products ranging from luxury goods to gourmet food. “Apart from upgrading physical infrastructure, we are hoping Government will continue scaling up efforts to groom more talent with various expertise to help support the growth of our transport and logistics services sector,” said Sankoloba.
This week BEMA in collaboration with USAID organised a transport and logistics workshop to create an excellent networking platform.The deliberations of the workshop are expected to enable the industry to formulate a strategy and roadmap for expanding the local transport and services.
Sankoloba believes that Botswana represents important opportunities for investors to connect with some of the world’s most dynamic emerging economies such as Thailand, Myanmar and Cambodia presenting exciting opportunities for the logistics and transport sectors.“For the best part of the 20th and 21st centuries we were ignored and now we must harness all the available opportunities to be the center of trade between Africa, US, Europe, China and South-east Asia,” she said.
Apart from international trade, BEMA says intra-Africa trade has been expanding on the back of strong domestic demand and is expected to grow further as the formation of more integrated economic community takes shape in the next few years. In addition, BEMA is preparing to negotiate favorable deals with many of the international economic blocs to help strengthen trade and logistics for the country.
Sankoloba said BEMA will continue to lobby for the enhancement of local transport infrastructure. “Our focus is to ensure that Gaborone retains its potential competitive edge in multi-modal connectivity in air, land and rail,” said Sankoloba.She further said the growth of overseas logistics business will enhance Gaborone’s role as a super-connector linking Africa and the rest of the world.
On infrastructure Kazungula Bridge scheduled for opening in a few years’ time will expand both Botswana and Zambia’s cargo, adding to the Trans Kalahari Highway connecting Botswana to Walvis Bay, Namibia. The road link’s travel time is about two days which is less than half the time it takes for ocean going cargo via other ports.
The business community has reiterated its call to authorities to provide incentives in order to improve the country’s competitiveness and productivity, to help spur the country’s exports.
The Botswana Exporters and Manufacturers Association (BEMA) Chief Executive Officer, Mmantlha Sankoloba has prepared a dossier to help government identify gaps on local export capacity. The report has already been shared with government for consideration.
“It is well-known that developing export capacity is a critical driver of firm level competitiveness and productivity,” said Sankoloba, adding that thriving exports also have a ripple effect on sustained poverty reduction and job creation.
“It equally worries the Association to see a lot of youth roaming the streets, we have so much potential in manufacturing and we need a strategy to retain the investors.”
She said a lot of effort should be channeled on export development (goods and services) to create deep and durable markets and diversification of the economy to facilitate inclusive growth.
“Export capacity development activities that focus on sectors and markets where smaller producers as well as the poor are better represented can have real sustainable pro-poor trade impacts. Within the smaller landlocked countries, such as Botswana, exports led growth is a key priority to drive productivity,” Sankoloba said.
Though calls to improve the country’s exports revenue is now sounding like an old record, Sankoloba said government, trade support institutions and private sector should support competitiveness with a coherent strategy. “There is no pivotal point, where we meet and everyone is doing their own things, which, unfortunately is detrimental to trade,” said the BEMA CEO.
Sankoloba wants government to improve advocacy on key issues such as competition, standards, tax and inclusiveness of the benefits from trade and transport facilitation and private sector development.
Over the years Botswana has performed badly on AGOA, a trade programme that give preferential trade quotas for the country to export into the US.
BEMA argues that in order for local exporters to maximise utilisation of AGOA, authorities should improve the ease of doing business, provide export incentives and an inducement or reward to the exporters. Botswana’s exports efforts are crippled by high costs of transportation and logistics, lack of skilled manpower and the inability to import the required manpower due to difficulties faced in obtaining work and residence permits and lack of any incentives or funding for upgrading of equipment and replacements to meet quality standards set by overseas buyers and companies.
The Association also notes the non availability of training facilities locally for providing specialized skills required to operate, and maintain state of the art equipment, lack of access to land to expand existing manufacturing facilities.
On the other hand, other AGOA eligible countries such as Lesotho have competitive advantage over Botswana as they have incentives.
Sankoloba said the country has lost a few manufacturers to its peers in the region due to lack of incentives.
“We need incentives, it has not been easy for them (manufacturers and exporters) but they stick around. It’s about time government listen to the private sector,” calling for authorities to start implementing short-term initiatives.