BB calls for private sector to drive economic growth
Business Botswana President, Neo Nwako, has called for urgent reforms to strengthen the role of the private sector in driving economic growth beyond diamonds.
Nwako told a Business Botswana (BB) Annual General meeting on Tuesday that non-diamond sectors such as agriculture, sport, tourism, creative industries and ICT have shown resilience and growth in recent months.
However, the private sector continues to struggle in job creation, only contributing 2% of new jobs, an equivalent of less than 2000 jobs annually.
“At present the government accounts for over 40% of GDP, while the private sector’s contribution still lags our regional peers. Government consumption remains almost double the global median, while the public service employs nearly 30% of the formal workforce. This inevitably crowds out private sector growth. Job creation within the private sector has slowed down to around 2% due to competition for talent and resources,” Nwako told AGM.
He said that the Small Micro Enterprises (SMEs) have also not been spared the wrath of the government power imbalance and contributes only 20% to the GDP compared to over 50% in countries in similar stages of development.
“To replace diamond revenues and achieve sustainable growth, we must double corporate profits, create at least 200,000 new formal jobs, triple non-mining exports, and significantly expand taxable consumption and wages. These figures seem ambitious, but they represent the scale of the opportunity if reforms are embraced and implemented,” Nwako said.
Nwako also stressed the need for infrastructure development, diversified mining activities, cultural tourism, financial technologies, more investment in agriculture and agro processing, and renewable energy, particularly solar.
The recently launched Botswana Economic Transformation Plan also received 7000 ideas from the public, and 90% of them coming from the private sector. “If implemented effectively, these ideas have the power to accelerate our country’s transformation agenda and place the private sector firmly at the centre of economic growth,” he said.
Nwako expressed confidence that the organization’s engagement with the government has been strengthened in recent months adding that the Sector level Consultative Councils meetings have been re-energized and so far five meetings have been convened since the beginning of the year.
Some of the critical sectors that were discussed are Mining and Minerals, Transport and Infrastructure, International Relations, Health, Human Settlement, and Water & Sanitation with positive results.
Nwako further emphasized that collaboration, and partnerships are critical for economic diversification, SME growth, productivity and greater private sector participation in national development. The BB President further pointed to Vision 2036 which aspires to drive Botswana to a high income nation through an export-led, diversified and inclusive economy.
“I want to proclaim that opportunities for private investment remain abundant. Infrastructure development projects offer scope for structuring high-quality income generating ventures that are attractive for public-private partnerships and able to leverage private sector funding. Moreover, mining beyond diamonds presents immense potential in exploration, extraction, and value addition,” he said.
The tourism sector, which has been the second-largest contributor to GDP for decades also continues to present significant opportunities for growth.
