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PPPs require careful planning, Nyamadzabo

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Government wants to first conduct due diligence before it enters into joint ventures with private companies, hence the delays in the implementation of Public-Private-Partnerships (PPPs), says Dr. Taufila Nyamadzabo.

The Secretary for Economic Affairs in the Ministry of Finance said government will not rush to implement the PPPs as it wants to safeguard the country’s interests. “There has been a slow pace in implementing PPPs and I think the major issue is how to guard the government interests in the process when implementing PPPs,” said Nyamadzabo.

He was addressing delegates during a budget review meeting organised by First National Bank Botswana. “It’s not that we just get money from the private sector but what we need to do is also to protect government interests when implementing PPP projects,” he said, adding that negotiations should also be done properly.

Another cause for delays in implementing PPPs is the lack of specialists in the area.“There has been also a problem in staffing the unit that is going to be responsible for PPPs,” he said.

Nyamadzabo however said the government has trained many people in the country to be involved in PPPs. He however revealed that government joint ventures with private companies were in the pipeline such as Morupule B to extend production by 300 megawatts.

Meanwhile Minister of Finance and Development Planning, Kenneth Matambo said the government approved the Strategy on Private Sector Participation in Land Servicing in April 2015. “Among the areas already identified for piloting the initiative include Gerald Estate Block 1 and Central Business District in Francistown, Kasane, Ramotswa, and Morwa/Bokaa area in Kgatleng District,” said the minister.

He said under this strategy, the private sector is expected to participate in land servicing. PPPs are complex contractual arrangement between the government and the private sector incorporating a specific time and risk sharing relationship.

The advantages of PPPs include risk sharing, accountability, innovation and best practice methodologies accompanied by clear monitoring and regulation.

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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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