ECONOMIC DIVERSIFICATION POLICIES AND STRATEGIES : What Is Different From What We Have Always Done? Joel Sentsho, PhD Trade Policy Advisor Ministry Of Trade And Industry 27 th August 2014 REPUBLIC OF BOTSWANA MINISTRY OF TRADE AND INDUSTRY BOTSWANA

PRESENTATION OUTLINE 1. INTRODUCTION 2. WHAT IS DIFFERENT FROM WHAT WE HAVE ALWAYS DONE? 2.1 Market Approach visa-a-vis Pragmatic Approach 2.2 Economic Policy and Implementation Matrix 2.3 Development of Priority List of Sectors/Sub-Sectors 2.4 Development of Sector Specific Strategies 2.5 Institutional Setup 3. ACHIEVEMENTS SO FAR 4.CONCLUSION: - Where are our Policies and Strategies pointing to?

This will be based on Economic Policies, Strategies and Sector-Specific Strategies ECONOMIC POLICIES:  Industrial Development Policy for Botswana (July 2014)  Special Economic Zones Policy for Botswana (February, 2011)  Trade Policy for Botswana (2009)  Citizen Economic Empowerment Policy (CEEP)

ECONOMIC STRATEGIES:  SPEDU Strategy for Selebi-Phikwe Regional Economic Diversification (2013)  Botswana’s Cooperative Transformation Strategy (September 2012)  Economic Diversification Drive (EDD) Strategy for Botswana (2010)  Botswana National Export Strategy (2010)  Investment Strategy for Botswana (2010)

SECTOR SPECIFIC STRATEGIES  The Strategy for Development of the Dairy Sector in Botswana (2013)  Botswana Textile and Clothing Development Strategy (2013)  A High Level Strategy for the Development of the Leather Industry in Botswana (2012)

Government creates conducive environment for Private Sector Private Sector identifies priority Sectors for development Pragmatic Approach Market Approach Govt Sector Devt Partners Parastatals Private Sector Labour Economic Diversification

Each Policy has a Vision, Mission, Theme and Implementation Matrix. For IDP 2014 we have: Vision: To have diversified, sustainable, and globally competitive industries. Mission: IDP2013 aims at promoting development of diversified and viable industries as well as commercial sectors, using skilled personnel and appropriate technology whilst leveraging on active private sector collaboration and participation. Theme: Placing Botswana among the Industrialized Economies of the 21 st Century. Implementation Matrix with milestones, Strategic Initiatives, Responsible Implementer and Timeframes

 A priority list of sectors is developed by all Stakeholders  The list includes sectors/Subsectors with potential for domestic and international market growth, export potential and employment growth  The identified list is developed by the private sector which is the engine of growth for Botswana

For each sector/sub-sector a Sector specific strategy is developed which includes:  SWOT Analysis  Value Chain Analysis  Cluster Development  Development of Business Linkages 10

Value Chain Analysis breaks a production chain into its constituent parts to identify and understand:  Value adding activities in the chain;  Value chain business opportunities and challenges;  Economic actors at each stage of the value chain;  Value chain leadership or governance;  Domestic, international and global value chains;  Required policy interventions to sustain the sector.

BREEDERS FEED PROCESSING TECHNICAL SUPPORT FROM ALL BDS TECHNICAL SUPPORT FROM ALL BDS MILK PROCESSING MILK PROCESSING TRANSPORT PACKAGING AND BRANDING FINANCIERS FEED GROWERS DAIRY COWS

Membership to represent all critical Stakeholders  16 Ministries  11 Parastatals  2 Independent Departments  3 Private Sector Representatives  2 MTI Departments  7 Chairpersons of Thematic Teams  5 EDD Unit Ensures Effective Coordination, Collaboration and implementation Monitoring and Evaluation to track progress Private Sector Involvement (BOCCIM and BEMA) Impact: Effective C oordination, Collaboration and Implementation

a) EDD purchases: Cumulative Purchases  A cumulative figure of Government purchases of P billion worth of goods and services has been recorded since inception of the EDD in Out of this figure, the cumulative value of purchases from local manufacturers and service providers is almost P7 billion. Cumulative Purchases Since ManufacturerP97.5mP214.2mP298.3mP182.0mP792m % Service Provider P493.0mP1.672bnP1.539bn P2.180bnP5.854bn % TOTAL EDD PURCHASES P590.5mP1.886bnP1.837bnP2.362bnP6.676bn Category April 2010 – March 2011 April 2011 – March 2012 April 2012 – March 2013 April 2013 – March 2014 Total

a) EDD purchases: Cumulative Purchases by Percentages Cumulative Purchases Since Manufacturer P97.5mP214.2mP298.3mP182.0mP792m Service Provider P493.0mP1.672bnP1.539bn P2.180bn P5.854bn TOTAL EDD PURCHASES P590.5mP1.886bnP1.837bnP2.362bnP6.676bn % Retailers P437.2mP1.460bnP1.208bnP1.504bnP4.609bn % Foreign Supplier P123.0mP431.0mP374.0m P353mP1.281bn % TOTAL PURCHASES P1.151bnP3.777bnP3.419bn P4.220bn P12.566bn Category April 2010 – March 2011 April 2011 – March 2012 April 2012 – March 2013 April 2013 – March 2014 Total

a) EDD Purchases ii) Analysis of Purchases per product for 2011/12 16

b) Promotion of Local Production and Consumption i) Employment Creation, Investment and Turnover The turnover for these enterprises declined by over P86.9 million representing a 6% decline. The decline is for 37 enterprises out of the 110 enterprises in the sample, or 34%. Most of the companies which showed declined in turnover are those involved in the production of building/construction products (such as bricks, pipes, cement) bakeries, milk, chemicals and furniture. The figures are as shown in the table below: 17 ACHIEVEMENTS SO FAR CONT’D

 SPEDU Strategy – works that are underway: ◦ Turning the old mine shaft into a mining museum; ◦ Refurbishment of Selebi-Phikwe Airport; ◦ Beneficiation of copper ◦ Steel Manufacturing and Casting ◦ Use water from the mine for Horticulture 18

 A Leather Park is planned to be developed at Lobatse.  Benchmarking studies [2014] have already been undertaken to Brazil, Ethiopia, India and Italy.  A feasibility study for the Leather Park will be will be undertaken and is expected to be completed by December

20 “ Develop diversified, sustainable and globally competitive industries,“ that will place Botswana among the industrialized countries of the 21 st century. Attract world class firms that will produce world class goods for world markets Open world markets for Botswana Goods and Services Ensure that Batswana participate and benefit from the opportunities opened by Botswana’s economic policies and Strategies Industrial Development Policy (2014) Special Economic Zones Policy (2011) Trade Policy for Botswana (2009) Citizen Economic Empowerment Policy

21 Turn Selebi-Phikwe into a vibrant, Diversified, and sustainable economic region Develop globally competitive enterprises Diversify exports and export markets through a vibrant and globally competitive private sector Turn Co-operatives into Vibrant, Competitive and Profitable Business Enterprises based on modern business practices SPEDU Strategy for Selebi-Phikwe Regional Economic Diversification Economic Diversification Drive (EDD) Strategy Botswana National Export Strategy Cooperatives Transformation Strategy