Trade and Industry

Thursday, 16 June 2011

SADRN Working Paper: Botswana's Export and Competitiveness Policy and Non-Traditional Exporting Firms

  • Year: 2011
  • Organisation: TIPS
  • Author(s): Roman Grynberg

The purpose of this paper is two-fold. First it is to review Botswana's competitiveness policy in the 10th National Development Plan, (NDP10 -2009-2016), National Export Strategy (2010-2016) and what are its conceptual foundations in the works of Michael Porter (1990). This will help explain the direction of trade and development policy in a small landlocked country like Botswana. The second purpose of the study is to review the actual experience of several non-traditional manufacturing exporters (i.e. outside the textile and motor vehicle industry) and to see what their experience has been and whether the current export strategy will facilitate their competitiveness and survival in Botswana's challenging commercial context. The five firms reviewed in this paper, represent numerically approximately one third of the firms in the non-traditional export sector. The sector is very small and is likely only to become smaller as the existence of this sector is in many ways the product of an earlier period when there was more government intervention in the development of exports. The analysis of the firms is qualitative in nature as firms were understandably unwilling to provide cost and revenue data and there were an insufficient number of firms for any serious quantitative analysis. The research focuses on the main concerns of the firms in sustaining their position in the export sector. In some cases this stems from the costs of transport, smallness and in others from decisions of government in terms of development policy and its application.

The paper will consider whether there is anything in the current competitiveness strategy that will assist firms in meeting the challenges of production in a small landlocked country like Botswana. It will be argued that the strategy and the actual commercial needs of most of the firms surveyed are disconnected as the export strategy is focused on a view of export development which is in appropriate given the actual level of private sector development in Botswana. Moreover, the policy is internally contradictory. Like most resource rich countries Botswana's principle policy direction for diversification is beneficiation which lies at the very heart of national and regional trade policy. It fails to focus on the question of how beneficiation of raw materials is to proceed in light of the current electricity and energy policy which lies at the core as to why firms in Botswana beneficiate minerals abroad. Thus the approach taken in this paper is essentially commercial, considering the actual cost and availability constraints that firms face.