Botswana falling victim to SA protectionist measures
Botswana is reportedly falling victim to protectionist measures in South Africa leading to a major decline in exports.
In its recently-released review for the third quarter of 2019, local economic think tank, Econsult attributed the weakness in exports to many factors.
Chief amongst them is newly implemented South African regulations, in which the country’s government contracts specify 100 percent local content for certain products.
“This has affected one major Botswana exporter of manufactured goods particularly badly,” stressed Econsult, which is led by renowned economist, Keith Jefferis.
While the move has impacted Botswana’s exports, it is also considered contradictory to the spirit of regional trade agreements such as the SADC Free Trade Area.
Additionally, it goes against the South African National Treasury’s own economic transformation document released in August.
The document identified regional integration through contributing towards industrial development in Africa as a major component of South Africa’s industrial policy.
For Botswana, given the significance of export-led growth to the country, its poor performance is considered a grave concern.
Other factors thought to have contributed to the unsatisfactory export levels include slower global and regional economic growth reducing export market opportunities.
Meanwhile, in more grim news, Econsult economists have also poured scorn on the country’s Ease of Doing Business environment.
Botswana’s score has remained more of less unchanged in recent years. Failure to improve has seen the nation’s ranking drop dramatically.
This year the country came 86th in the Ease of Doing Business global rankings, falling from 19 in 2005.
This lowly ranking is said to be a wake-up call to improve the Ease of Doing Business score through enhancements to the business environment.
Similarly, the country’s Global Competiveness Index (GCI), which is conducted by the World Economic Forum (WEF0), has reportedly been on a decline in recent years, despite showing signs of improvements between 2012 and 2016.
The GCI covers a set of indicators such as: macroeconomic stability, financial system, ICT adoption, infrastructure, health, business dynamism, skills, product markets, and market size and innovation capability among others.
Although government has made efforts towards the improvement of doing business, such as the adoption of the Doing Business Roadmap, Jefferis and his colleagues at Econsult feel a lot needs to be done to improve the situation.
This includes speeding up of the legislative process so improvements in the business environment that require changes in the law are implemented quickly.