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Budget allocation to agric falls short

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A Botswana Agricultural Marketing Board (BAMB) Agronomist, Lambani Obuseng says the P1.34 billion allocated to Agriculture in the 2018/19 National Budget is not enough to support the sector. Speaking at the First National Bank (FNB) Budget Review Seminar, a day after Minister Kenneth Matambo’s Budget Speech, Obuseng said the P1.34 billion, which represents only three percent of the budget allocation is worrisome as it falls way short, if the sector is to grow to another level. In his view, Botswana has veered off the resolutions of the 2003 Maputo African Union Summit that urged African countries to commit at least 10 percent of national budget allocations to support the Agriculture sector.

“This is the sector that contributed 40 percent to the GDP at independence, but now only two percent. What went wrong?” Obuseng quizzed. He acknowledged that although there have been several agricultural programmes geared towards supporting the sector; there is need to first do thorough research before any policy formulation. “We might be coming up with programmes that are not what the country needs,” he said.

Among the operational challenges that hamper local output and exacerbate the dwindling performance of the sector, Obuseng cited the low adoption of technologies by farmers, stating that currently farmers use the simplest traditional methods of farming despite the vigorous changes in technology over the years. Obuseng added that effects of climate change resulting in floods; low levels of rain can no longer be ignored. Another challenge that local farmers are faced with is poor infrastructure – roads and communication, especially in production areas. If not attended to these hurdles could further hamper the sector. Obuseng also identified; poor soil fertility, labour shortages, and low productivity that lead to high per unit production costs as some of the challenges impeding agriculture. He said Botswana needs to adopt and implement better ways of supporting the agriculture sector.

Among his recommendations is the adoption of precision agriculture that goes a long way in reducing waste using satellite maps, computers to match seeds and fertilisers. He also recommends the use of drones, which could aid with planning and strategy based on real time data gathering and processing. Drones can also be used to analyse soils, crop monitoring, crop spraying, and health assessments among other things. According to Obuseng, the use of drones in other jurisdictions has proved to increase efficiency by 85 percent. In response to the budget allocation, General Manager of Clover Botswana, Mike Joyner said it is disappointing to realise that even though the SADC Integration Strategy identifies Agro processing as a potential money-spinner in the region, there has not been much effort to support the sector. “I acknowledge that the private sector has a big role to play, but the three percent would not do much,” Joyner said, adding, “how much engagement is made before the final budget allocation?”

His view is that financiers are often apprehensive to release funds in subsectors like dairy, which are high risk and daunting. “There are opportunities and the private sector is ready to work with government in ensuring that the sector performs well.” Business Development expert, Donald Maika of African Emerging Ventures said at the seminar that the biggest challenge is that farmers still shy away from pursuing agriculture as a business. He challenged the private sector to come up with supporting products that can revive and sustain the agriculture sector. “There are opportunities for the private sector to play a role in agriculture. We need to drive this sector through providing equity to agribusiness,” Maika said. He also believes that local investment companies need to do something to change the fortunes of the sector, which in turn could attract international investors.

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‘Manufacturing holds key to economic growth’

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Barclays bank’s economist Naledi Madala has urged the country to consider manufacturing, as a key tailwind to drive the economy and reduce inequality.

She was speaking at a gathering organised by the bank which focused on economic outlook for 2019. “We should not make a mistake of leapfrogging without manufacturing,” said Madala, lamenting that the country’s diversification remains a pipeline dream, as the diamond is still the economy’s mainstay. She bemoaned that mining activities in the country could not spring forward diversification, though non-mining GDP has been steady over the years.

“Extractive industries are not good stepping stones for diversification, the sector does not prepare us for the next step,” said Madala at the Barclays’ Economic Outlook Forum Review 2019. The economist further noted that government should confront head-on challenges of productivity and competitiveness to attract the much needed Foreign Direct Investment (FDI). Though diversification efforts continue to hit a brick wall, Madala said the country should expect increased activities in the mining sector hinged to ramp up in coal production in the year ahead.

She also implored government to consider a welcoming attitude towards foreign investors and generous tax incentives to businesses that set up in the country. Madala is also upbeat that the use of public private partnership model could also help diversify the economy coupled with privitisation. “Privitisation will offer opportunities for growth, through the renewed optimism from government, as business confidence has improved,” said Madala.

She implored the government and the business community to access what is going to drive and hinder growth highlighting that key headwinds to growth are income inequality, diversification challenge and productivity, among others. “The pace of poverty reduction has slowed down, while income inequality goes up,” said Madala

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MINISTER BEWAILS BAD REPAYMENT BY YOUTH

Keikantse Lesemela

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Minister of Youth Empowerment, Sports and Culture Development, Tshekedi Khama has told parliament his ministry continues to face challenges on the repayment of Youth Development Fund (YDF) loans.

Recently presenting the budget to Parliament, Khama said this financial year the ministry has received a total of 2582 YDF applications and approved 983of them to the value of P98 million. He said the programme attracts a high level of interest from youth but the ministry is only limited to funding a maximum of 1200 youth projects annually due to budget limitations.

“However the greatest challenge for the Fund is the repayment of the loan component by the majority of the youth businesses. The youth have advanced number of challenges for this including high rentals for operating spaces, low market access owing to tight competition and limited production capacities,” said Tshekedi, adding that they continue to pursue beneficiaries to repay the loans.

Out of the 919 businesses funded 1058 jobs have been created. The minister highlighted that disbursements of funds will continue to be undertaken until the end of the financial year. “The YDF is currently under review in line with the pronouncement made by the President, Dr Mokgweetsi Masisi in the State of the Nation Address, to improve beneficiaries through training, and encourage consortia and cooperatives,” said Tshekedi.

The ministry assists YDF beneficiaries in marketing their products and services through fairs and exhibitions. The ministry also runs entrepreneurship-training seminars for youth and in the past year 3692 young people were trained. Over 600 youth businesses attended fairs and exhibitions to market their products and services. Currently the ministry is collaborating with Local Enterprise Authority (LEA), First National Bank Botswana and Citizen Entrepreneurial Development Agency (CEDA) on training in entrepreneurship development and mentorship of YDF beneficiaries.

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