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What Uganda can learn from Botswana’s growth miracle

By Vision Reporter

Added 13th November 2014 02:15 PM

On June 6, 2014, when I presented my credentials to the President of the Republic of Botswana, Lt Gen Seretse Khama Ian Khama, we had very jovial conversations.

trueBy Julius Peter Moto

On June 6, 2014, when I presented my credentials to the President of the Republic of Botswana, Lt Gen Seretse Khama Ian Khama, we had very jovial conversations.

We discussed a number of things, which included the AU mission for peace building in Africa, notably AMISOM, the Pan African Parliament, the crisis in South Sudan, regional political economy and the co-operation between Uganda and Botswana.

He inquired about the number of Ugandans living in Botswana to which I responded about 3,500.

He highly regarded the Ugandan professionals working in Botswana, describing his country’s satisfaction in service delivery by Ugandans in Botswana. A number of Ugandans have private health practices in Botswana.

When Botswana got independence on September 30, 1966, after almost 80 years under the British administration, there are facts that clearly indicate her transformation:

 She had about 550,000 people. Now it has a population of 2,127, 825 (July 2013 estimate)

 She had only 22 college graduates, with 100 secondary semi-skilled labour. Now it has about 1,288,000 skilled labour force.

 She had only 12km of tarmac roads. Now it has 6,616kms of tarmac roads. Currently, she commits a minimum of 30% of national budget on infrastructure development that is required for opening markets and reducing poverty in the country.

 It was one of the poorest land-locked agrarian economies in the world, with per capita GDP of $70. But now, it is heralded as one of the fastest growing economies of the world, with the highest per capita income averaging $17,000 per year and it is not about to stop.

 There was no airport. Now it has seven major international airports and six other airports recognised under the SACU and 20 aerodromes, spread all over the country’s major tourist destinations. To date, these airports are responsible for over 2,500,000 tourist arrivals and the figure is climbing steeply.

 There was no hotel. Now there are over 30 world-class deluxe hotels, run by both the government and the private sector. There are also a number of budget hotels, tent and camping facilities for low spending tourists.

 There was no university. Now there are 12 world-class universities. In 1976, under the leadership of the late President Sir Seretse Khama, a nationwide campaign using Motho Le Motho Kgomo (one man, one beast) slogan, over $1m was raised to start the University of Botswana from scratch in 1982. All able bodied Batswana contributed.

Now, the University of Botswana ranks number 12 in Africa. The Limkokwing University of Creative Technology received more than 400 million hits on its creative website in 2013.

What did the Batswana do differently to register such tremendous successes over the years?   
There was virtually no hope for this land-locked country. Had it not been for the visionary statesman Sir Seretse Khama (July 1, 1921 – July 13, 1980), the country would not have seen the light of development.

Where there is no vision, people die. Here was a leader who suffered discrimination due to interracial marriage but set his feet to steer the present day Botswana to greatness.

In the immediate past and presently, there are highly motivated public managers, good politics and rule of the law, hardworking and less corrupt citizens both in rural and urban settings.

A combination of these factors are recipes for success in any organisation.
Botswana has maintained one of the world’s highest economic growth rates since independence. It is one of Africa’s most stable countries and has the continent’s longest continuous multi-party democracy.
 
The Botswana Democratic Party (BDP) has been in power since 1966 and it is not about to stop ruling. During the elections of October 24, 2014, the BDP won a comfortable margin of 58% and it is currently forming a Government that will see the country grow in the next five years. 

All the 57 elected Members of Parliament (MPs) and four specially elected MPs took their oath of office on October 30.  However, the office of the speaker and deputy speaker remain vacant pending the outcome of a case that is still before court. The Clerk of the National Assembly, Ms Barbara Dithapo, explained that parliament business would not proceed without the substantive speaker as per Section 59 (4).

The discovery of diamonds in the sands of Motloutse River 12 years before independence did later trigger the establishment of the world’s wealthiest diamond mines and the immediate inflow of much needed revenue to the young state.

However, it was the bedrock of social and economic policies adopted by the country’s post-independence leaders – to ensure that all citizens benefited from the diamond revenues – that began the real economic miracle. Other products exploited and exported, for the benefit of all citizens, include copper, nickel, salt, soda ash, potash, coal, iron ore and silver, livestock processing and textiles, all valued at  $6.011b (2012 estimates).

Despite their small population, in the private sector, the Botswana brand in financial services is reaching far into other African countries, including Uganda.
 
A company called Letshego Uganda was launched in 2005 and it is a subsidiary of Letshego Holdings Ltd Botswana – a Botswana Stock Exchange listed company. With the enabling laws on competition based on regional economic blocks, Uganda’s businesses can be established in Botswana.

In the extractive industries sector, Uganda can learn from Botswana. The Government of Botswana passed new laws that prohibit exporting of unprocessed products to outside countries. Had this been done earlier, the country would have grown by leaps and bounds. The Government established the Diamond Trading Company Botswana in partnership with the De Beers, a major diamond consortium.

The DTCB established a modern diamond processing plant in Gaborone - Botswana. With respect to Uganda’s oil and gas sector, a similar pattern of investment with both public and private shareholding, with a determined forward looking board of directors, who shall direct the National Oil Company, will see a robust beneficiation of the sector, triggering direct growth in primary and secondary value chains, for all the citizens of Uganda.
The tourism sector of Uganda can grow faster. There is only one limiting factor that is affecting the growth of the sector and that is the cost of reaching the tourist attractions.

The Government of Uganda should, as a matter of urgency, invest in a national airline and upgrade the aerodromes in the national parks into international airports that will facilitate direct flights of tourists, thereby cutting the cost associated with the hub-and-spoke aviation concept, a policy I do not agree with.

The Ministry of Works and its Civil Aviation Authority should prioritise and invest in this necessary condition that will stimulate growth along the tourism value chains.
The Governments, world over, do business in strategic infrastructure. A mix of policy is the best way forward that will ensure survival of private businesses and stimulate growth of the private sector. Uganda cannot be an exception not to do business.

The Uganda Development Cooperation (UDC) should be quickly revamped through appropriate refinancing and its priorities aligned with government’s policy direction to remain committed to developing the Uganda’s industrial capacity, as well as playing a major role in facilitating job creation through industrialisation to produce goods along the value chains in competition in the regional market.

UDC should not work on potentials. Potentials are there and what needs to be done are actions. UDC should not function as a Government. UDC should function as a business in facing competition with others in the market place for in business quick decisions win customers for you lest the other business gets the customer and you do not make sales.

There are already competitors for UDC, notably the South Africa’s Industrial Development Cooperation (IDC) that is state owned and state funded with strings of multiple businesses in Africa and in Europe. IDC makes very good profits while doing so. IDC is financing tourism and infrastructure projects in Uganda. A quick look at the Chinese companies that obtain lucrative infrastructure projects in Uganda will show you that these companies are state-owned and state-funded.

In the agriculture sector, Botswana has one of the best cattle industries in Africa and she produces her own vaccines for treating the herds. Environmental factors determine the kind of crops grown and animals reared.

A greater part of Botswana is occupied by the Kalahari Desert, with dry and drought-prone desert climate and more or less 20 sq km of irrigated land. Primary crops are corn and wheat that are grown in the wetter eastern part of the country.

More than half of the population lives in the rural areas and is largely dependent on subsistence crop and livestock farming. The national herd is estimated at slightly above 2.3 million head but the cattle industry is experiencing a decline.

Doing business in Botswana is on a steep rise, thanks to the regional economic block SACU from which large revenues are obtained. The Standard and Poors credit rating for Botswana stands at A- while the Moodys rating for Botswana sovereign debt is A2.

Ugandans are encouraged to do business in Botswana due to the World Bank’s doing business 2014 ranking that puts Botswana at 56 out of 189 global economies on ease of doing business, up by nine points from 2013. Investment opportunities exist in the renewable energy sector notably solar, irrigation-based agriculture, manufacture of consumer goods and in the mining sector notably in diamonds, coal, copper and nickel, where government recently lifted a moratorium on the issuance of the mining licenses.
 
The major business challenge include the narrow market of only two million, which makes Botswana a small market but has a gateway to the SADC market of 277 million people. Another challenge is the narrow skills base of the work force, partly due to a low population base or inadequate opportunities for workers to gain industrial experience. Broad band cost of the Internet is high but is expected to decline.

The other challenges that Botswana has to address include overgrazing, desertification, limited fresh water resources and the HIV/AIDS scourge.

The writer is the High Commissioner of Uganda in South Africa, accredited to the republics of Botswana, Namibia, Zimbabwe and the royal kingdoms of Lesotho and Swaziland

 

What Uganda can learn from Botswana’s growth miracle

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