Botswana funds Zim: How the poor cousin became a donor

Alex Magaisa

There are of course many factors attributed to Botswana’s good performance.

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A stable political and economic environment, a relatively free economy in which property rights are protected, general respect for fundamental rights and freedoms, sound economic management and prudent public policies have all been important factors in their successful journey.

Nevertheless, this would not have happened without sound and progressive leadership and democratic and economic institutions. This is a point that has been driven home eloquently by economists, including Acemoglu and others in their work, Why Nations Fail. Barclay reiterates the same point in his work on Botswana, as do many other scholars.

Botswana has been fortunate to have good leaders who, by and large, have focused on the public good and manage natural resources prudently. Most scholarship on Botswana’s economic performance acknowledges the exemplary leadership of its founding President Seretse Khama, who set the pace for his successors.

Although the ruling party he established has had a monopoly of power since independence and while opposition parties do raise complaints over the country’s democratic challenges, Botswana is generally seen as stable and peaceful, providing conditions that are conducive to business and progress.

In this regard, the country has resisted the temptation that so often afflicts their counterparts on the continent to change the constitution and do away with presidential term limits.

This is why since 1980, Zimbabwe’s year of independence, Botswana has had four presidents, compared to Zimbabwe’s two, the first had to be removed via a coup. Establishing this culture of change of leadership, even within the single party dominance is an important building block in promoting democracy.

More significantly, Botswana has been vastly more prudent and wiser in the exploitation and management of its diamonds, something that Zimbabwe has utterly failed to do.

How it managed and deployed its diamond profits was a ready model which was available for Zimbabwe to draw lessons from when it discovered its gems in 2007. When Botswana discovered diamonds in the late sixties, it went into a joint-partnership with diamond mining giant, De Beers, realising its own limitations. The result was the establishment of Debswana, a joint operation in which the Botswana government’s share grew progressively over time.

Critics might argue that the deal is still not perfect, but it is far better than what has been obtained in fellow African countries. The situation in Zimbabwe was the opposite. While Botswana managed the diamonds for national development, Zimbabwe’s diamonds were subjected to an orgy of plunder by political, military and foreign elites.

The crackdown by the State on local communities which sought to exploit the alluvial diamonds has been well-documented. Soon afterwards, political, military and foreign elites converged on Chiadzwa, staking claims to the exclusion of local communities and the nation at large.

Former President Robert Mugabe once claimed that $15 billion worth of diamonds had been stolen. Most observers agreed that the $15 billion claim was outlandish, but nevertheless, the admission of plunder by the then Head of State was an indication of the egregious theft that had taken place in Zimbabwe.

A country can have abundant resources but if it lacks sound leadership, it counts for nothing. If anything, it is arguable that Zimbabwe is more richly endowed with a diverse range of resources, including arable land.

It is important to comment briefly on this issue because it also impacts Zimbabwe’s economic output and performance. Zimbabwe’s inability to fully manage and exploit its vast arable land is truly scandalous. In economic terms, Zimbabwe is currently sitting on what economist Hernando de Soto referred to as “dead capital” in respect of arable land. It goes without saying that Zimbabwe used to be an agricultural powerhouse in the past.

The destruction of the old property rights system represented a fundamental change that caused a diminution in wealth.
Officially, most of the agricultural land now belongs to the state. Those on the land have no security and banks and financial institutions cannot extend credit on an asset that has no security of title.

The need for a system that gives back some life to the land in financial terms is known, but so far the government has failed to come up with an agreeable solution. Command agriculture, the much-vaunted policy to support farmers has had a torrid tenure and is fraught with corruption. There is no real confidence in the leases that the government is giving out because there is always the risk that the state can use its power to price it away.

Without security of tenure, the financing of farming remains a precarious affair. Government alone does not have the power to support commercial agriculture. The government’s approach to arable land is yet another example of failing to manage a resource and to capitalise on an area of comparative advantage.

Now Zimbabwe is importing grain from neighbours like Zambia, when just a few decades ago, it was the exporter. With its vast arable land and expertise, Zimbabwe has no need to be spending scarce foreign currency importing food that it could easily grow and sell to other countries. As with diamonds, Zimbabwe’s problem is not that it does not have arable land; it has simply failed to manage and exploit it to give the country a competitive advantage.

That is why Zimbabwe is now begging for financial assistance from Botswana, importing grain from Zambia and haemorrhaging talent as young Zimbabweans escape poverty, unemployment and seek pastures new. What Zimbabwe needs most from its neighbours is not money but lessons in leadership and sound economic management. Botswana has the template on diamond mining. It’s a simple copy and paste job.

But Zimbabwe’s political elites are too greedy, rapacious and selfish. They looted the Chiadzwa diamonds and would loot some more if new opportunities arise. Botswana may have given Zimbabwe some assistance, but it could be dwarfed by the contributions that Zimbabwe’s political and military elites hold in their personal accounts, most of them abroad.

In Seretse Khama, Botswana had a founding father who had long term vision and sound political and economic management skills. His successors took the baton and maintained a similar approach. This is not to over-hype or romanticise Botswana. It has its challenges. If one were to ask an average BaTswana, they might have a different opinion over the success narrative that is reflected in governance indicators where the country ranks highly.

Yet, with all these challenges, it is incredible that Botswana has become a donor to Zimbabwe. When President Mokgweetsi Masisi came to Harare this week, he brought with him medical equipment and drugs to help shore up Zimbabwe’s failing healthcare system. In effect, the Botswana taxpayer has joined the millions of other foreign taxpayers in Western countries who have been propping up Zimbabwe’s healthcare system. At least 90% of medical drugs in Zimbabwe’s public hospitals come from donors. It is a tragic situation.

It’s sad that Zimbabwe is now relying on its cousin for assistance. It’s worse that the country’s media has to make false claims which the neighbour has to deny. It should never be like that. It’s a sign of grand failure that Zimbabwe has to be in this sorry situation. The difference between us and Botswana is not the discovery of resources. It’s a difference in leadership.
Alex Magaisa is a legal writer, columnist and a former advisor to Morgan Tsvangirai.