TRALAC - Trade Law Centre

Botswana: Exporters ask for trade finance facility

Friday, 23 November 2007

Source: Mmegi/The Reporter (Gaborone)

Botswana has been urged to refocus its energy on microeconomics in a bid to shore up the declining rate of industrialisation in the country.

At a breakfast panel discussion organised by the Department of Industrial Affairs at Fairground Holding's Pavilion Hall in Gaborone on Tuesday, experts raised concerns about the country's focus on larger components of the economy.

"We have done everything in our power for macro-economic policies and received accolades but ignored micro-economic variables," said Monnane Monnane, a Research Fellow with the Botswana Institute of Development Policy Analysis (BIDPA).

"We are not doing enough in terms of micro-economic variables." For example, said Monnane, Botswana has received praise for its management of interest rates, which has earned it position eight out of 125 countries compared with position 50 for the country's competitiveness. Macroeconomics is generally defined as the study of the behaviour of the economy at the aggregate level, as opposed to the level of specific subgroups or individuals, which is microeconomics. For example, a macroeconomist might consider the industrial sector, the services sector or the agriculture sector, but he would not consider the specific parts of any of these sectors.

Factor studies include inflation, unemployment, and industrial production, often with the aim of studying the effect of government policy on these factors. On the other hand, microeconomics - which is basically the opposite of macroeconomics - is the study of the behaviour of small economic units such as that of individual consumers or households.

The breakfast meeting also heard that Botswana exporters and industrialists continue to face problems. Co-owner of Caratex Botswana, Tally Tshekiso, requested the Minister of Trade and Industry Neo Moroka to look at the possibility of establishing a trade finance lending facility. Tshekiso said as an exporter to the US, under the Africa Growth and Opportunity Act (AGOA), he faced challenges in shipping goods to the market, which takes 35 days both to reach the US and to be paid.

Botswana therefore needs a trade finance facility, which would bolster the existing invoice discounting service set up by the Botswana Development Corporation (BDC). Tshekiso was supported by other panelists, who buttressed his point that institutions like the Citizen Entrepreneurial Development Agency (CEDA) and National Development Bank (NDB) have stringent requirements, which have the effect of hampering small businesses.

He criticised Botswana's multilateral agreements like the Southern African Customs Union, saying SACU arrangements benefited South Africa more than Botswana.This provided a cue for the Deputy Director of the Botswana Confederation of Commerce Industry and Manpower (BOCCIM), Norman Moleele, who said he had doubts about the commitment of Botswana's neighbours to regional integration.

Moleele said Botswana had opened its borders, but other countries had not reciprocated. He expressed concern that some manufacturers were not procuring their inputs locally and suggested the imposition of quotas as a way around the problem. "This will only be the beginning of giving local businesses the hope that their products will be bought," Moleele said. Speaking at the same breakfast discussion, the Managing Director of Foamex Botswana Lisani Ndaba said transportation was a serious challenge to his business. While the market for his goods was there, under AGOA, transporting the goods between Botswana and the US was difficult.

Ndaba said Botswana being a landlocked country, overland transport to seaports in other countries entailed delays as trucks were stopped in South Africa where transport officers asked about the origin of the business, which resulted in us "disappointing our customers."



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Botswana’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.