Happy Birthday Botswana– what lessons for Namibia?
Last Friday Botswana turned 50 and celebrated its independence from Britain with a justifiable and giant party throughout the country. Botswana, Namibia’s closest neighbor, at least economically and politically has much to teach the rest of Africa and we have much to learn from both the positive and negative experiences of that country. The country is hyped as the least corrupt country in Africa and based on observation of countries in the region, this may well be the case but it does not mean that Botswana does not have a gradually worsening corruption problem. Botswana has much to be proud of from its record as a country in what was at independence in 1966, in a turbulent and war torn region.
Botswana went from being amongst the world’s poorest countries at independence with a GDP/capita amongst the lowest in the world ( about $70/capita in the late 1960’s) to an upper middle income country with a GDP/capita in 2015 of USD 7,080. The cynics quip that if any country of two million people had 20 million carats of diamonds to export every year for 30 years they would also be rich. It is true that Botswana was blessed by nature. It not only found the huge Orapa diamond mine in 1967 but this was followed by the fabulously rich Jwaneng mine, much touted as the richest piece of real estate on earth. This was in 1972 and is today the richest mine on earth where 10c of operating costs will earn. Botswana is uniquely blessed with not one but two of the richest mines in the world.
But the diamonds themselves are not enough to explain the huge rates of economic growth experienced by Botswana since independence. Would any other country have managed that much diamond wealth as well as Botswana had? One need merely compare other very resource rich countries in Africa and the record has been very poor. In oil rich Nigeria 40 years of huge oil exports has resulted in a country where the vast majority of the people live below the poverty and are getting poorer. It is estimated that almost 100 million people living on less than a $1 a day, despite economic growth, statistics have shown. The Nigerian National Bureau of Statistics said 60.9% of Nigerians in 2010 were living in “absolute poverty” – this figure had risen from 54.7% in 2004. Poverty rates in other very resource rich countries like Angola and DRC remain much higher than in Botswana.
What makes Botswana truly unique is the quality of the early political elite which remained wedded to ideas of good government, peace, economic stability and the development of its population. Where Botswana was truly blessed was not in its diamonds but that it had one of Africa’s true giants as its founding father of the nation. Sir Seretse Khama was a towering figure committed to high standards of good government not found in other parts of Africa. There was no Mobutu, Mugabe or Dos Santos family which used and exploited the nation’s wealth for their personal benefit and that of their supporters. Sir Sertse Khama, while certainly no angel, was a far superior political leader to almost all his African contemporaries. Huge amounts of diamond revenue were invested in developing infrastructure, educating the population and providing good health. Botswana had an exemplary record for public health. Moreover, while Botswana is far from any understanding of a Jeffersonian democracy and never was, there was always political stability. The army stayed in the barracks and over 50 years there has been no illegal transfer of power. Importantly there was one dominant ethnic group, the Batswana which make up 80% of the population.
But recently not all has gone Botswana’s way. The last decade has seen economic growth rates stagnate as well as the complete failure of government to escape from total diamond dependence. Indeed it can be argued that Sir Seretse Khama’s job was the easy part of its history. He took the nation’s diamond wealth and invested heavily in the human and physical infrastructure that was needed for transformation from an impoverished to a rich country. It was what followed, the period from the founding father’s death in 1979 to 2000 under the leadership of his deputy Sir Ketumile Masire that was a watershed in the nation’s history. During this time, President Masire introduced the Financial Assistance Policy (FAP) which tried in vain to diversify the economy away from its total diamond dependence by providing massive subsidies to new industries in much the same way as Namibia did with Ramatex. As long as the subsidies continued, the industry continued to operate and provide jobs, but when the government finally abandoned the policy in 2000 under the leadership of Festus Mogae, predictably the subsidized industries collapsed one after another. Unfortunately Festus Mogae and his successor, Sertse Khama Ian Khama, son of the founding father, had no idea of how to replace the FAP and how to put Botswana on a path to industrial development. They replaced the FAP with a policy of providing small hand-outs to local business which was equally ineffective. They neither had the will nor the vision of leaders such as Rwanda’s Paul Kagame or Ethiopia’s late Prime Minister Meles to impose the discipline needed to achieve real international competitiveness.
But as Batswana wake this week with a giant case of ‘bableass’ (hangover) from the party they have just had, a future of jobless economic growth lies ahead of them. Students graduating from the University of Botswana, like their Namibian counterparts are facing prospects of ever longer periods of joblessness and many wonder why their governments bothered investing in their future. The old growth model that was the basis of the prosperity of Botswana and Namibia where the government had the revenue from the diamond mines to continue to employ legions of university graduates has come to an end. If they are unable to get real growth and diversification in the private sector the stability that was their foundation of the current prosperity will evaporate as was the case the with Tunisia.
The key lesson, if there is one is that peace, order and good government are vital to prosperity but they are certainly not enough. The road to transformation must be defined by each country and needs to be defined by the people and those who lead. The key is to recognize that the government can no longer be the main provider of jobs and prosperity in future as it was in the past. But the aggressive policies pursued with such vigor in Ethiopia and Rwanda and needed to make Botswana and by extension Namibia competitive economies are not being pursued by government. It is politically easier to address short term issues with small band aids of money but only sound policy aimed at ensuring that investors want to invest in the country and create a dynamic private sector will get results. That involves government actually listening to the views of the private sector and taking them on board when formulating policy. This is less and less the case in both Botswana and Namibia.
These are the views of Professor Roman Grynberg and not necessarily those of his employer the University of Namibia.