Trade between Bots- SA robust
Despite Covid- 19 pandemic SA remains Botswana’s number one source of imports
Bot s w ana and South Africa are aggressively exploring modalities to leverage trade and investment opportunities that abound between the two countries.
In the first of its kind business forum between the two countries this week, Minister of International Relations and Cooperation in South Africa, Naledi Pandor said South Africa is interested in exploring cooperation in mining and minerals beneficiation, which are key pillars of Botswana and South Africa’s industrialisation policy.
Their eyes will also be focused on exploring ways to enhance automotive components manufacturing that will contribute to job creation in the respective countries.
“Tourism was hit hard in both countries due to the Covid- 19 pandemic, and together we need to develop sustainable strategies to revitalise the tourism industry,” Pandor said.
Pandor said both Botswana and South Africa would benefit from an agricultural exchange, stating that Botswana has abundant fertile land yet it imports a lot of the food it consumes.
“This is a trend across much of the continent which we can work together to address so that we can produce more of what we require without importing from beyond our shores,” she said, adding that the two countries need to investigate the production of animal feed, fruit processing, as well as vegetable and fertiliser production.
According to Botswana Investment and Trade Centre ( BITC), trade relations between Botswana and South Africa have been robust, and have strengthened despite the Covid- 19 pandemic. South Africa remains Botswana’s number one source of imports.
Botswana runs a huge import bill, standing at US$ 8.2 billion in 2021, most of it from South Africa. BITC Chief Executive Officer ( CEO) Kelotsositse Olebile said the investment agency’s focus is on addressing this through industrialisation.
In his view, the import bill demonstrates that there are ample opportunities for private sector to take advantage to produce and supply the demand.
Botswana’s exports to South Africa in 2021 were at P7.2 billion. Botswana is South Africa’s seventh largest export market.
Currently, there are 38 Memoranda of Understanding ( MoUs) between Botswana and South Africa, and Pandor’s view is that the two countries are long overdue to hold the next Bi- National Commission after the last one held in 2013 so that they can further explore areas of cooperation.
“There is great room for future growth in the area of outward investment, the creation of industrial value chains and infrastructure development,” she said.
Business Botswana President Gobusamang Keebine acknowledges that in comparison to South Africa, Botswana has a small economy that needs to be unlocked by among other things, collaborations with South Africa, failing which he says Botswana economy will be headed for a slow death.
He believes that one of the things that will change Botswana’s fortunes is for the local private sector to change perceptions, and how they relate to their business counterparts in South Africa.
“Perception must also change at government level, policies, regulations and laws must be crafted in such a way that they should encourage business to business across borders and position Botswana as a gateway to Africa from South Africa,” Keebine said.
Keebine says it is high time that borders are not perceived as points of immigration, but facilitation points of trade. He appealed to private sectors from both countries to not leave everything to government, stating that for example, for years, there has been talk about the Walvis Bay Railway connectivity to Botswana.
“Why do we limit this connectivity to Botswana, because if it connects on the current railway system, immediately all of the SACU countries will be connected,” he wondered, adding that the railway should not be limited to BotswanaNamibia, but should be extended to include South Africa.
Keebine’s view is that the Kazungula Bridge in Kasane that connects to Livingstone, Zambia provides for a development of a railway connectivity that has come to a standstill because of funding.
“Why can’t private sector take over that project? The connectivity of that region immediately opens up the African Continental Free Trade Area ( AfCFTA),” he said, adding that the railway could connect into Zambia, then into the DRC and Rwanda and the rest of East Africa, making continental connectivity possible.
Keebine’s contention is that there are still issues that inhibit business between the two countries including lack of border integration, where rules on the one side of the border are totally different from rules on the other side.
“Botswana and South Africa should deliberately work out a one- stop- border post to facilitate between the two countries. This does not only inhibit trade between the two, but also makes it very costly.”
He believes that border post management is very critical to trade between the two countries. “If for example, I am allowed to move a product out of Botswana, systems should support me to bring the same product into South Africa, and vice versa,” Keebine said, adding that it is only through collaboration between the two private sectors and their governments that trade will be maximised.
CEO of the Industrial Development Corporation ( IDC) South Africa, Tshokolo Nchoncho on the other hand said they are well aware of the potential that Botswana holds in various areas, in the resources and mineral sector - particularly nickel and copper.
He pointed out however, that Botswana has not expanded aggressively its mineral exploration programmes.
“We do a lot of that as IDC in partnership with the private sector and government regarding licences and exploration rights,” Nchocho said.
He added that while Botswana is a big exporter of beef and beef products, it has not expanded its value chain substantially in further downstream processing of cattle stock that it has.
He highlighted the opportunities for leather products that can be expanded and automotive industry and textile and clothing industry.
Regarding mining and beneficiation, Nchoncho said, Botswana is currently undertaking specific projects that need to be brought to life.
“Small economies like ours need to trade beyond their borders and population constraints for growth, and for that to happen there has to be investment in rail and road infrastructure, as well as energy systems of the future,” he said.
The IDC works with SADC countries and development finance institutions, governments and private sector in exploring opportunities.
The organisation allocates 30 percent of its capital to investments outside South Africa.
“We have invested in supporting massive water projects in Lesotho, gas development fields and agriculture in Mozambique, energy projects and mining in Zambia and the DRC, and in a cement plant in Ethiopia,” Nchocho said.
He said for collaborations of trade and business to materialise between Botswana and South African private sectors, there is need for increased investment in production capacity.
He emphasised the need to build the infrastructure that will facilitate trade and the movement of goods, as well as harmonisation of policies that will enable the movement of goods, for example, rules of origin, traceability systems, among others.
Lastly, he cited the need to incorporate social upliftment in terms of employment creation and participation of women and young people in all projects and economic initiatives that are being undertaken.
The two- day business forum between the two countries was also an opportunity to celebrate and commemorate 28 years of bilateral economic relations.