LEADERSHIP AND DEVELOPMENT WORKSHOP FOR MOZAMBIQUE.

HOW TO MAKE YOUR ECONOMY COMPETITIVE BY:

Supporting the Domestic Private Sector while attracting Foreign Investment

Thembo Lebang Executive DirectorBotswana National Productivity CentreTel/Cel: +267 3913444/+267 71309875E-mail: thembol@bnpc.bw

CONTEXT

• All developing countries are under pressure to diversify their economies and reform their public sectors

• The prosperity of a country is dependent upon the productivity of its companies (Michael Porter)

• Competitive companies are created by competitive clusters

• As the custodian of national productivity, BNPC needs to create competitive clusters in order to drive productivity improvement.

• The challenge is how to utilise foreign investment and the public sector reform process to grow the domestic private sector and create competitive clusters.

TYPICAL RESPONSE TO THE NEED FOR ECONOMIC DIVERSIFICATION AND PUBLIC SECTOR REFORM

DIVERSIFICATION TOOLS

FOCUS ON

SMME’S

PRIVATIZATION

FOREIGN DIRECT

INVESTMENTHOWEVER, FOR DEVELOPING COUNTRIES WITH SMALL LOCAL

PRIVATE SECTORS:PRIVATIZATION AND FDI MARGINALISES THE LOCAL

INDUSTRY AND CITIZENS

THE REQUIREMENT

FOREIGN DIRECT INVESTMENT

PRIVATIZATIONAND

ECONOMIC DIVERSIFICATION

CITIZEN ECONOMIC EMPOWERMENT

EQUAL

COMPETITIVE CLUSTERSCOMPETITIVE CLUSTERS

Buy Local Campaigns

To save and create jobs

Empowerment Charters to Achieve

Local Strategic Imperatives

Management of Supply Chains to drive Multiple levels of change

TYPICAL INTERVENTIONS

The are three types of Interventions;

Each with a different focus

ST

RA

TE

GIC

INT

ER

VE

NT

ION

S

Not Black Economic Empowerment (SA)

• South Africa is the only country in the Region with a large vibrant diversified Private Sector.

• BEE in South Africa is being used to rectify inequalities and redistribute wealth.

• The other Regional countries are challenged with diversifying mainly commodity driven economies and creating competitive private sectors.

• The proposed approach intends to institutionalise equality and create wealth.

Botswana has had limited success with Policy driven interventions

THERE HAS BEEN SOME ATTEMPTS TO

UTILISE THESE INTERVENTIONS IN BOTSWANA; WITH LIMITED RESULTS,

DUE TO:

LIMITED SIZE OF THE LOCAL PRIVATE SECTOR

POOR LOCAL SUPPLY C

APABILITIES

POOR PRODUCT QUALITY

UNDEPENDABLE SUPPLY CHAIN

SOME SUCESSS ACHIEVED AT DEBSWANA LEVERAGING THE SUPPLY CHAIN MANAGEMENT

• Results to date– 17 Companies relocated

– BWP 56 Million Investment

– 561 Jobs Created

– 52 SMME’s Upgraded to win tenders from BWP 60, 000 to BWP 4 Million

• Work In Progress– 7 Companies relocating

– 27 Million projected Investment

– 335 Jobs projected to be created

Why was Debswana Successful?

• Developed a Citizen Economic Empowerment Policy.

• Put in place a Business Development function capability within their Supply Chain Management function.

• Worked with suppliers to attract investment, create JV’s and upgrade SMME’s.

• The approach was policy and project driven, not just policy.

• The Government has recently achieved success with diamond beneficiation with The Diamond Trading Company relocating to Botswana, coupled with the development of a Diamond Technology Park

THE DOMESTIC PRIVATE SECTOR VALUE PROPOSITION

ECONOMIC DIVERSIFICATION

CITIZEN ECONOMIC EMPOWERMENT

SUSTAINABLE ECONOMIC GROWTH

SUCCESSFUL BOTSWANA

THIS CAN WORK IF LOCAL REALITY IS TAKEN INTO ACCOUNT

Opportunities for Mozambique?

• There could be value in evaluating and prioritising all large capital projects, be they developmental or investment driven, Government, Donor or privately funded, on their ability to grow the domestic private sector.

• Project potential for further beneficiation\value adding, supply chain development, skills and technology transfer, needs to be fully evaluated, encouraged, incentivised and where possible made non negotiable to win the tender or the investment opportunity.

• While the continuing opening up of the economy with the resultant increases in investment is critical to Mozambique’s future, a vibrant competitive domestic private sector must be a key outcome of the process.

Conclusion

• My fellow delegates, we in Botswana are still young in this process and learning as we go along.

• Tis Region has no choice but to soldier on.

• LET US SWEAT IT OUT TOGETHER!