176
The affirmative action in Namibia has largely been inward-looking and seeking to bring benefits to Namibian blacks. This perspective appears to contradict the regional integration drive as other SADC potential investors are regarded as not indigenous. According to Jauch (1998), the affirmative action loan scheme in Namibia has failed to bring about notable redistribution of land and better representation in the allocation of fishing quotas. A few individuals have actually benefitted. Jauch (1998:22) noted that “…as a reformist policy, affirmative action has not challenged the economic structures which determine the distribution of wealth and income”.
There is therefore a need to rethink the African economic ethic of indigenisation if meaningful development and benefits are to be derived for the majority of poor people.
177
Agency (CEDA), Business Finance Scheme, Universal Access to Education, Citizen Entrepreneurial Mortgage Assistance Equity Fund (CEMAEF), Economic Diversification Drive (EDD), Local Enterprise Authority (LEA), Micro Business Finance Scheme, Remote Area Development Programme and Financial Assistance Policy (Republic of Botswana, 2012;
Duncan, T., Jefferies, K., and Molutsi, P., 2000).
Botswana’s Citizen Economic Empowerment was motivated by slightly different factors to those that affected more of the former colonies in the SADC region. Unlike South Africa, Zimbabwe and Namibia whose empowerment initiatives wanted to deal with past colonial socio-economic discrimination which led to inequalities. In the case of Botswana, the country was a protectorate and at independence in 1966 the people of Botswana felt neglected compared to other countries in the region. The colonial administration neglected infrastructural development and there was limited effort towards educating the local people. Though colonialism was not about development some countries got better attention than Botswana. In 1964 there were only four high/secondary schools in the whole protectorate. Earlier on, in 1961, only six Botswana nationals were attending universities (Somalekae,1998). While the observation did not consider the generally small population of Botswana in presenting these numbers, there is no doubt the poor educational services during the colonial times did not prepare the people of Botswana to take full charge of their socio-economic affairs at independence. They remained dependent on Europeans for administrative skills and worse still technical competencies. This made the Whole civil service system to remain under the Europeans even after independence. There was therefore a need for the localisation and empowerment of locals in areas which were neglected (Nthomang, 2013).
The localisation policy presents a framework that gives preferences to employment of citizens of Botswana over non-citizens in situations where they have similar education and training qualifications. The credit guarantee scheme provides guarantees to loans from commercial banks and offered to citizen-owned small and medium micro enterprises. The credit guarantee scheme also pays a certain percentage in case the citizen beneficiaries’ default. With the reservation policy, some businesses and services are reserved for Botswana citizens only. Preferences under public procurement are measures meant to favour citizen-owned businesses ahead of foreign
178
companies when doing business with government (Somalekae,1998; Republic of Botswana, 2012; Nthomang, 2013).
Unlike countries like Namibia, Zimbabwe and Tanzania which pursued some form of socialist ideologies in their early years after independence, Botswana from the onset had wanted to develop a capitalist state since 1966. The capitalist approach was not purely neo-liberal in nature or did it conform to state centred capitalism which was common in most SADC states just after independence. Rather, the Botswana capitalist accumulation followed a combination of private capitalism and state intervention (Tsie, 1998). The idea of state involvement was to bring about equal development nationally by deliberately empowering areas which had been neglected during colonial rule (Somalekae,1998). There was also the privatisation policy to promote private capitalism.
The privatisation policy aims at shifting government focus from engaging state-owned businesses and instead outsource some non-core services to the private sector. The government of Botswana provides financial assistance to businesses in order to promote the productive employment of citizens and this is covered under the Financial Assistance Policy. The Micro Business Finance Scheme seeks to provide small loans to small and medium micro enterprises (SMMEs). The Universal Access to Education provides basic education to all citizens for nine to ten years. The Citizen Entrepreneurial Development Agency (CEDA) gives loans at subsidised interest rates, structured finance, training and mentoring to citizens businesses. Equity finance to troubled citizen businesses that are threatened with closure by commercial banks is provided from the Citizen Entrepreneur Mortgage Assistance Equity Fund (CEMAEF). The Local Enterprise Authority (LEA) provides development and support services as a one stop shop to the local industry needs of SMMES owned by Botswana citizens (Duncan, T., Jefferies, K., and Molutsi, P., 2000; Republic of Botswana, 2012).
The colonial system had not developed the remote areas of the country and deliberate government programmes were put in place to promote local capitalist across the country including in remote areas. The Remote Area Development Programme (RADP) was one such programme that was meant to bring development to the neglected areas in Botswana an allow for the development of local capitalism (Nthomang, 2007; Molebatsi, 2000). There were however,
179
challenges that the policies did not deliver the desired out comes for many reasons among them lack interest by the people and lack of social services to support businesses as argued by (Toteng,1991; Mkandawire, 2004). For development programmes to succeed, Mkandawire (2004) observed that it was important for policy developers and implementors to understand that there is a strong relationship between the social development policy, provision of basic social services and the success of policies in poverty reduction.
Despite these many initiatives, the Republic of Botswana (2012:2) claims that there is evidence showing that generally the participation of citizens in major economic activities and opportunities is not significant and this is not a good indicator for sustainable economic development. In other words, the initiatives have not been successful, implying that the citizens’
economic empowerment concept has not been successful from the time of Botswana’s independence in 1966. For the people of Botswana to take part meaningfully in the economic development of their country there is therefore a need for a more strategic approach ((Nthomang, 2013; Republic of Botswana, 2012:2).
The Republic of Botswana (2012:3) defines Citizen Economic Empowerment “…as a set of interrelated interventions aimed at strengthening the ability of citizens to own, manage and control resources, and the flexibility to exercise options, which will enable Botswana to generate income and wealth through a sustainable, resilient and diversified economy”. In this definition any other SADC citizen other than those of Botswana cannot benefit from citizen economic empowerment. The policy appears to be a barrier to investment from outside Botswana. The presence of a government hand on the market activities contradicts the precepts of neo-liberal capitalism. The Republic of Botswana (2012) indicates that the citizens economic empowerment would help protect the economy from global shocks which might cause greater harm to the economy when it is owned by non-citizens. Their economic performance might be easily affected by the shocks of the global neo-liberal economy.
Another essential requirement for the success of the CEE is human capital development which should provide the Batswana with the necessary skills and capabilities to take advantages of economic opportunities to compete well in the neo-liberal global capitalist economy. Available
180
evidence shows that the Batswana are not very visible at senior management levels in the private sector segments such as construction, tourism and manufacturing (Tsie, 1998; Somalekae,1998).
The Batswana have however been doing well in pursuing tertiary education (Nthomang, 2013).
However, the Financial Assistance Policy (FAP) was phased out in 2001 because of about 70 percent of projects which had failed. For medium scale and large-scale projects, a failure rate of about 40 percent and 35 percent was noted for Botswana. The failure of FAP led to the establishment of CEDA in 2001. Unlike FAP which focused on financing citizen economic empowerment in addition to funding, CEDA promotes citizen economic empowerment by providing training and mentorship. CEDA however has its own challenges such as limited access to information, there is lack of commitment and dedication by project promoters and difficulty in accessing markets in the drive to empowerment and sustainable citizen business enterprises (Mkandawire (2004); Republic of Botswana, 2012:5).
The government of Botswana has noted that some schemes which were offered through the Public Procurement and Asset Disposal Board (PPADB) have been ineffective in promoting citizen economic empowerment. This has been so since companies of citizens have been providing low value products and services. A larger number of tenders have been awarded to non-citizen owned companies compared to those owned by citizens. Like all other SADC countries there is limited confidence in the businesses owned by indigenous people. Generally, the citizen enterprises have been small and lacked the motivation to grow, hence they remained restricted and could not secure better high value contracts. The schemes have not promoted growth of enterprises so they could graduate from SMME to bigger larger scale enterprises. It was also noted that the Botswana domestic market was small and could not support growth of enterprises. In this case access to the SADC regional market would help in growing the enterprises. Also noted was the lack of entrepreneurial tradition and culture (Republic of Botswana, 2012:6).
The challenge of limited entrepreneurial skills is not only unique to Botswana but the whole of the SADC and Africa as a whole which has not produced enough capitalists with entrepreneurial skills to drive economic development, hence the call for the rethinking of the African economic
181
ethic of indigenisation. The more entrepreneurs that enter the regional market, the stronger the SADC capitalism (Mkandawire, 2004).
The other dimension of citizen economic empowerment focused on women, youth and those living in far and remote areas. Women have remained engaged in low income generating activities and the youth suffer from unemployment. Those living in the rural or remote areas remained economically marginalised and only enjoy some competitive advantage over others in the rest of Botswana in areas where they enjoy special skills and knowledge to exploit their environment which then remains limited in those localities (Republic of Botswana 2012:6). For citizen empowerment to be sustainable there is need for human capital development. People should be empowered with appropriate skills, competences and abilities to exploit economic opportunities which may arise.
Notwithstanding the efforts of the government of Botswana in citizen empowerment, Lekgowe (2016:138) argued that this age-old policy of citizen economic empowerment has for a long time failed to deliver. Lekgowe noted that from 1966, when the issue of citizen economic empowerment was conceived, the policy has been surviving on fragmented pieces of national development plans and many loose pieces of legislation up to the recent 2012 citizen economic empowerment policy. Lekgowe argued for a single legislation which puts all these pieces together into a comprehensive law which can be compelling to all parties.
Despite some remarkable transformation of the economy during the period 1973-1991 in which the second and the sixth national development plans were in operation, there was acknowledgement that “too many Batswana still lived in poverty.” (Republic of Botswana, 1985:168). Lekgowe, (2016:168) observed that while the government of Botswana has put in place the citizen economic empowerment policy, it also has the economic diversification drive which promotes the purchase of locally produced goods and services. There has not been consideration of foreign investment requirements. To improve the quality of products and bringing into Botswana new technologies there is need for a strategy to accommodate foreign direct investment. The citizen economic empowerment does not promote foreign investment from other SADC states. They will be discouraged and yet Botswana is a member of the regional
182
body which requires foreign investment inasmuch as it also seeks to expand its global investments into mineral value addition and beneficiation.
The approach taken by Botswana of citizen economic empowerment has the same thrust as the indigenisation ethic in other SADC countries. The policy seeks to protect and provide a framework for the promotion of greater participation of the Batswana in their mainstream economic activities. By offering protection and preference to citizen business the citizen empowerment ethic tends to be inward-looking and not supportive of regional transnational investment which the regional integration of SADC has set out to promote. Similar challenges have been observed elsewhere in the SADC in the implementation of such an ethic. One major challenge has been the failure of the policy to eradicate poverty. With the majority of the people in Botswana and indeed the SADC being poor, there is need to rethink the African economic ethic of indigenisation, or citizen economic empowerment as it may be known in Botswana, to bring benefits and relief to the majority poor citizens.