By: Peggy O. Serame Ministry of Trade and Industry At National Business Conference, 15 th October 2012 REPUBLIC OF BOTSWANA MINISTRY OF TRADE AND INDUSTRY BOTSWANA

Outline Background - What is EDD? Expected Deliverables How - The Approach Short term Medium to Long Term Implementation Challenges Interventions Institutional Set-Up What is Different? Conclusion

Background -What is EDD? Economic Diversification Drive (EDD) was approved in April A national strategy aimed at accelerating diversification of the economy. Efforts are consolidated and integrated, coordination done by the Ministry of Trade and Industry. Covers the period Two (2) components: Short–Term and Medium to Long Term (MTLT).

Expected Deliverables More pillars of economic growth; Diversified sources of fiscal revenues, export earnings; Industrialisation; Entrepreneurship development; Employment Creation.

How - The Approach In the short term Use of Government purchasing power to “jump-start” local enterprises through preference schemes. “Local” refers to all enterprises operating within Botswana. Local Manufacturers and Services Providers issued with EDD Certificates.

How - The Approach cont’d  The EDD Certificate Operation in Botswana verified Capacity, quality assessment made Referral to Business Development Institutions for capacity building Facilitation of Linkages Does NOT guarantee award of tenders  National Suppliers Directory to be updated annually.

7 EDD Enterprises by Product Classification

 Government Procurement – Recorded Purchases for 2010/2011 through to 2012/ How - The Approach cont’d

 Import Bill Analysis (2011) 9 How - The Approach cont’d ProductValue of Imports (2011) in Billion Pula Value of Government Purchases (2010/2011) in Billion Pula Gap (Potential Opportunity) in Billion Pula Building Material Electrical Products Chemicals and Chemical Products Food Furniture Motor vehicles parts & accessories Paper & Paper Products Textiles & Clothing Total

How - The Approach cont’d In the Medium to Long Term Develop a vibrant and globally competitive private sector; Achieve technology and skills driven knowledge economy through seven (7) areas of intervention of: Sectoral Development & Business Linkages; Export Development and Promotion; Investment & Finance; Quality Control, Standards & Production; Technology Development, Innovation & Transfer; Research & Development; Entrepreneurship Development.

How - The Approach cont’d  Medium to Long Term Strategy: July  Stage I: Development of a Priority List of the EDD Sectors/Sub- sectors. List has been approved by National Economic Diversification Council (NEDC).  The list includes: Primary Production Agro-processing (dairy, horticulture, meat, etc) Leather & Leather Products Renewable Energy Textiles & Clothing Recycled Material Products –Paper, Plastic & others Arts & Crafts Services/Support Sectors Banking, Finance & Insurance Coal, Diamond & Other Minerals Beneficiation Construction/Building Materials 11

How - The Approach cont’d  Stage II: Development of Sector/sub-sector Specific Strategies.  Strategy for the Leather Industry has been approved by NEDC. Funding be sourced.  Strategies for the Dairy and Textiles and Clothing sectors are being refined for consideration by NEDC in December  Stage III: Development of Sector/Sub-sectors Value Chains Development Formation of clusters for business linkages & sector associations Implementation of sector specific interventions. 12

How - The Approach cont’d Other Components - MTLT Strategy  Enterprise Competitiveness: Work to develop an Enterprise Competitiveness Framework has commenced.  The framework will address issues of:  Business Management;  Quality;  Productivity;  Skills development;  Technology uptake and adaptation;  Packaging and labelling;  Testing and certification;  Patenting and Intellectual Property.  This will facilitate capacity building to achieve competitiveness. 13

How - The Approach cont’d Other Components - MTLT Strategy  Outward Investment: Through this tool, established and competitive enterprises will be facilitated to participate in external markets.  Support provided in the form of guarantees to financiers, who in turn fund the enterprises to invest outside the country.  Enterprises may provide employment and/or repatriate some profits back into the country.  NEDC has directed this should be accelerated as an additional economic growth and diversification tool.  BDC to take the lead in Outward Investment. 14

Implementation Challenges Product quality; Uncompetitive prices; Undeveloped/fragmented supply chains; Irregular and unreliable suppliers; Coordination of stakeholders; Limited range of locally manufactured goods and services; Inadequate industry relevant skills; Doing business environment.

Interventions Enterprise Competitiveness Framework; Monitoring and evaluation Purchases Import Bill Analysis Monitoring of Enterprises with EDD certificates Investment Promotion Activities Reporting to Special Cabinet every two (2) months Performance monitoring solution for key performance indicators being developed; EDD Communication Strategy; Doing business and competitiveness initiatives – National Doing Business Committee, Cabinet Sub-Committee.

Cabinet National Economic Diversification Council Economic Diversification Drive (Botswana Excellence Strategy) Economic Diversification Thematic Areas VISION 2016: PROSPERITY FOR ALL Sectoral Development & Linkages MTI EDD ‘’Big Bang’ Policies and strategies Ministries and Parastatals ‘EDD’’ Big Bang’’ Policies and Strategies Private Sector Development Strategy Export Development & Promotion Investment & Finance Entrepreneurship Developmen t Technology Development, Transfers & Innovation Quality Control,,Standards & Production Research & development Industrialised Economy Diversified Exports Enhanced Citizen Economic Empowerment Increased Employment Improved Quality of Life Figure 1: EDD Institutional Set-Up

What is Different? Emphasises integrated approach, with implementation from national perspective. Private Sector & other stakeholders play a significant role. Sector development - definition of critical success factors, value chain mapping, cluster development for business linkages, sector-specific strategies; Strategic alliances & partnerships. Put a premium on Innovation and Creativity.

Conclusion EDD - building enterprise capacity, enhancing competitiveness, product & market diversification, exploiting opportunities. Unlocking implementation challenges; Private Sector-led growth; EDD - changing the industrial landscape, transforming the Botswana economy.