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Gov’t red tape damages the economy

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VINCENT MATUMO

The Ministry of Labour and Home Affairs  is grappling with issues of work and residence permits which have since earned Botswana a negative reputation internationally for rejecting visitors and possible investors arbitrarily.After a High Level Consultative Committee meeting at the twilight of 2015, President Ian Khama directed that all stakeholders caucus on ways to improve turnaround times for permit applications.
The Ministry, private sector body Business Botswana and the Directorate for Intelligence and Security Services and other organs held an impromptu meeting at Cresta Lodge, Gaborone where they prepared all the concerns and recommendations for the Presidency to consider. Odirile Merafhe, Head of Business Botswana Retail Sector, moderating on a discussion at the 14th National Business Conference (NBC) took time to point out how government had ‘captured’ the private sector, “while other countries talk of state capture.”
BCL Mine, the lifeblood of Selebi Phikwe and surrounding areas, employing over 4000 workers, also fell victim to government red tape. According to presenters at the NBC, it was failure to secure permits that caused the refurbishment of the smelter to be performed later that initially intended, “at great cost,” remarked a Chief Executive, in a hushed tone. The Botswana Exporters and Manufacturers Association once revealed that one of its members, a Chinese national, came and made a turnover of over P20 million within three months: but failure to secure residence permits for his family forced him and his company to neighbouring South Africa.
It has been established, as pointed out by University of Botswana academic, Prof. Happy Siphambe, that it takes 149 days to start a business in Botswana, 93 days to deal with construction permits, 103 days to get electricity, 51 days to register property and so on, as also recorded by the World Bank.“The current problem is that of political patronage where individuals are now being deployed on the basis of their political support,” Siphambe pointed out, candidly, referring to political appointments of Chief Executives at public institutions.
Comparable countries such as Mauritius, Seychelles and even lower income countries such as Mozambique require fewer procedures and days to start a business than Botswana.World Economic Forum Global competitive Report for 2015 ranked Botswana 72 out of 148 countries with the country classified as being in transition in terms of stage of development, a transition between factor driven and efficiency driven economy. However, South Africa and Namibia have already transcended to efficiency stages, even with Namibia’s rating being lower than Botswana at number 86.
According to Siphambe, the most problematic factors for doing business in Botswana are: poor work ethic (20.7); inefficient government bureaucracy (12.9); access to financing (12.4), inadequately educated workforce (12.4); restrictive labour regulations (9.5). The country performs best in the basic requirements such as institutions and macroeconomic environment. Skills shortage and mismatches vs stringent migration and work permit system.

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