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Republic of Botswana KEY NOTE ADDRESS BY THE PERMANENT SECRETARY MINISTRY OF TRADE AND INDUSTRY MRS BANNY K. MOLOSIWA AT THE CONFEERENCE: ARE DIAMONDS THERE FOREVER? – PROSPECTS OF A SUSTAINABLE DEVELOPMENT MODEL FOR BOTSWANA 27 – 28 AUGUST, 2014 VENUE: LANSMORE HOTEL TIME: 0800HRS

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Republic of Botswana

KEY NOTE ADDRESS BY THE

PERMANENT SECRETARY MINISTRY OF TRADE AND INDUSTRY

MRS BANNY K. MOLOSIWA

AT THE CONFEERENCE: ARE DIAMONDS THERE FOREVER?– PROSPECTS OF A SUSTAINABLE DEVELOPMENT

MODEL FOR BOTSWANA27 – 28 AUGUST, 2014

VENUE: LANSMORE HOTELTIME: 0800HRS

Director of CeremoniesVice-Chancellor, University of Botswana, Prof. Thabo T. Fako

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Executive Director, BIDPA, Dr. Tebogo B. SelekaRegional Advisor, Friedrich Ebert Stiftung, Mr Marcus SchneiderCaptains of Industry,Members of the Media, Distinguished Ladies and Gentlemen

Good morning, 1. Let me first of all thank the organizers of this conference for

giving me the privilege of officially opening it.

2. When I recieved the request to give the Keynote Address I was humbled and hence happily obliged because the issues that will be discussed over the next two days are of particular interest to the Ministry of Trade and Industry whose mandate is to provide a conducive business and investment environment for the private sector.

3. The title for this conference: "Are Diamonds there forever? – Prospects of a Sustainable Development Model for Botswana" is very important as it is going to highlight and address critical issues that are high in the Government Agenda, including, economic diversification, industrial development and export development. Further, the conference will explore and search for a sustainable development model to drive Botswana’s economic growth and development. The critical questions for all participants to ask in this search for a model that could deliver on Botswana’s development are:

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1. What has been done so far to reduce Botswana’s high

dependence on diamonds?

2. Which efforts worked, which ones proved futile and why? NB: Botswana’s context.

3. Where do future opportunities lie? And,

4. What needs to be done to develop a growth model that will serve Botswana well in the post-diamond era?

5. It is my belief that this conference will go a long way in addressing these questions and the pertinent issues they raise as it brings together Researchers, Representatives of Government, Politicians, Media, Civil Society, and the Private Sector to debate the development challenges Botswana currently faces, and how they may be addressed.

6. Ladies and Gentleman, conferences such as this one, create a conducive environment for healthy debates. Debate in its true sense means that different opinions will be heard from across various stakeholders and participants, and constructive discussions shall take place in order to assist Government to steer this economy through to a better future.

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7. As we all know, Botswana is often regarded as an African economic success story. As one of the world’s poorest countries at independence, Botswana transformed itself into a middle income country whose per-capita income is among the highest in Africa. In addition, Botswana is also one of the few countries whose enormous mineral wealth have been used for improvement of the welfare of its people and enhancement of political stability. As a result, Botswana is seen as having escaped the “resource curse” through implementation of sound macroeconomic policies and reforms.

8. In addition to this, Botswana has also made significant achievements that indicate that the country stands to gain from its integration into the world economy. For instance, in the area of Economic Freedom, in 2012, Botswana was ranked as the 33rd economically free country in the world, out of 179 countries; and 2nd out of 46 countries in the Sub-Saharan Africa. Further, the Baseline Profitability Index, which is based on three factors of asset growth, preservation of value and repatriation of capital, has ranked Botswana 2nd in the world, after Hong Kong, in 2013 and 1st

in 2014. I know we have not been doing very well in the recent past on Doing Business and Global Competitiveness, but the past two years have shown signs of improvement.

9. Despite the above, Botswana still suffers from dependence on a single commodity, namely, diamonds. Forecast has shown that around 2017 our diamond revenue will start dropping.

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10. It is for this reason, Ladies and Gentleman that Government is working very hard to secure Botswana's future beyond diamond mining through various policies, strategies and initiatives.

11. One of these is the Economic Diversification Drive (EDD) initiative which Government has embarked on to promote the growth of a vibrant and globally competitive private sector. The EDD initiative is indeed a paradigm shift in our economic diversification effort because it attempts to address Botswana’s economic diversification challenges in a new and innovative way, different from what we have always done. 

12. This is so because the EDD follows:

1. an integrative approach which brings together all Stakeholders (Government Ministries and Departments, Parastatals, Private Sector, Civil Society and Labour Unions) on one table to achieve a common agenda;

2. a clear definition of Critical Success Factors for prioritized sectors that are being developed;

3. a holistic approach that includes addressing the whole value chain for each Sector/Sub-Sector being developed; and

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4. a balanced contribution of the Private Sector that is based on well-articulated strengths and opportunities as well as weaknesses and threats that require government support.

5. EDD is to be achieved through two components. The first component is the short-term strategy which aims to leverage on Government’s purchasing power to stimulate local production and consumption by procuring from locally based manufacturers and service providers.

6. The second component, referred to as the Medium-to-Long Term strategy, aims to diversify the economy through a holistic and systematic development of globally competitive enterprises that need little or no Government protection and support. Its specific objectives are to:

1. develop globally competitive sectors;

2. diversify exports and export markets through a vibrant and globally competitive private sector;

3. develop goods and services that comply with local and international standards; and

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4. develop an entrepreneurship culture for business growth and enhanced citizen participation in the economy.

7. Other important Policies and Strategies include:

8. The Revised Industrial Development Policy which was approved by Parliament in July 2014. The Policy’s vision is: “To have diversified, sustainable and globally competitive industries,“ that will place Botswana among the industrialized countries of the 21st century. The Policy aims to achieve industrialization through:

1. Mineral beneficiation;

2. Industrial upgrading and modernization;

3. Natural resource industrialization;

4. Services-led industrialization and;

5. Industrialization through regional integration initiatives.

9. Special Economic Zones (SEZs) Policy – aims to develop world class industries that will produce world class goods

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and world markets. Areas earmarked for SEZs development include Lobatse for the Leather Park; Gaborone 414 hactares near the Airport for manufacturing and services; the Tuli Bock/Selebi-Phikwe area for horticultural development and Pandamatenge area for arable agriculture.

10. The Cooperative Transformation Strategy – aims to turn Co-operatives into Vibrant, Competitive and Profitable Business Enterprises based on modern business practices. To achieve this, the Strategy will, among others, development of strategic Co-operatives Growth Pillars which will entail identification of products where Co-operatives have comparative and competitive advantage to effectively compete in both the domestic and international markets. Examples include domestication of phane production in the Tswapong area; arts and crafts in Maun; devils’ claws in the Kgalagadi, and so on.

11. Furthermore, the Ministry of Trade and Industry has a number of Parastatal Organisations which are responsible for implementing its policies with a view to diversifying the economy through the development of a vibrant and globally competitive private sector. These include:

12. The Citizen Entrepreneurial Development Agency (CEDA) which was established in 2001 to provide financial and technical support for business development with a view to promoting viable and sustainable citizen owned business enterprises;

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13. The Local Enterprise Authority (LEA) which was established in 2004 to provide development and support services to SMMEs, encompassing training, mentoring, business plan finalisation, market access facilitation, and facilitation of technology adaptation and adoption;

14. Botswana Investment Trade Centre (BITC), established through the merger of BEDIA and IFSC in 2012 to provide a one-stop-shop service centre to investors. This is meant to reduce time-consuming, bureaucratic procedures and improve service delivery to investors and thus promote both domestic and foreign investment; and

15. Botswana Development Corporation Limited (BDC) which was established in the 1970s to be the country's main agency for commercial and industrial development. The BDC has an instrumental role to play in the EDD initiative because it focuses on the sectors of the economy, namely; industry, agriculture, services and property that are critical for economic diversification.

16. Botswana Bureau of Standards – certifies quality and standards of locally produced goods and services.

17. SPEDU - a regional BITC.

18. Competition Authority - promotes and monitors fair trade9

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19. On the International Arena, Botswana is party to a number of regional and international agreements which include:

20. The Southern African Customs Union (SACU) which has among others identified eight priority sectors for regional cross border trade. These include Textiles, clothing and apparel; Agro-processing, including agricultural value-chains; Mining and quarrying, including mineral beneficiation and processing; Leather and leather products; Automotive, including automotive components; Renewable/alternative energy; Arts and Crafts; and Support Services (ICT; financial; skills development; infrastructure, transport and logistics; engineering).

21. The Southern African Development Community (SADC) which is a source of market for Botswana goods, more-especially textile and clothing to South Africa; copper/nickel to Zimbabwe, and so forth. Further, SADC provides a source of market routes to potential markets for Botswana in the Central and North Africa, more especially those in the COMESA-EAC-SADC Tripartite.

22. The EU-SADC EPA – was concluded and initialled in June 2014 in Gaborone. The Agreement secures a duty-free quota-free market access to the 27 EU countries for Botswana beef and beef products as well as other products that Botswana may produce, including textile and clothing; handicrafts; leather products; pharmaceuticals and so forth;

23. Other Trade Arrangements with potential benefits for Botswana’s economic diversification and industrial development include Africa Growth and Opportunity Act

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(AGOA) which provides duty-free quota-free access to 6500 product lines that Botswana may be able to export to the US market.

24. Ladies and Gentleman, I have every reason to believe that this conference will come out with recommendations and proposals that will assist Government and other policy makers to come up with a model that works, a model that can take our development agenda to the next level. I, therefore, wish you fruitful deliberations [as I declare this conference officially opened].

25. I thank You.

PULA! PULA! PULA!

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