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  • Author: Kelesego Mmolainyane
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: In her quest to further graduate to the high-income status, Botswana seeks to invest more in infrastructure development for both productive and social use. An efficient and effective infrastructure provision is fundamental to excellent public service delivery and access. Sadly, Botswana, like many other world economies, has a challenge of having an infrastructure financing gap. One of the innovative ways to fill this gap is through public private partnerships (PPPs) with the capital market that has excess liquidity. Infrastructure PPPs are complex and capital intensive projects that require project finance experts to advise parties involved regarding returns and risks associated with each project. Various project-financing models can be designed to suit project specifications and they cannot be over-generalised for all PPP projects. Nevertheless, given the tight fiscal space, Botswana now, more than ever, should consider issuing PPP bonds and applying user changes model to finance economic PPP infrastructure for sustainable and inclusive economic growth.
  • Topic: Development, Economics, Infrastructure, Finance, Public Sector, Economic Development , Private Sector
  • Political Geography: Africa, Botswana
  • Author: Johanne Motsatsi, Goitseone Khanie
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: The paper examines the key determinants of industrial growth in Botswana, using manufacturing sector value added as the proxy for industrial growth. It employs the Autoregressive Distributed Lag (ARDL) cointegration approach using annual time series data for the period 1983 to 2015. Empirical results show that industrial growth is driven by financial sector development, human capital development, trade openness and foreign direct investment. Specifically, domestic credit to the private sector as a percentage of GDP and secondary school enrolment ratio are found to be significantly related to manufacturing value added as a percentage of GDP both in the long run and short run. While the relationship is limited to long run for total trade to GDP, it only exits in the short run for FDI net inflows. The study therefore recommends that policy makers should design and ensure proper implementation of financial sector development strategies that can help ease access to credit for manufacturing enterprises in the country. There is also a need for a holistic approach in the design and implementation of innovation and human resource development policies in order to provide a conducive environment for skills acquisition, innovation and technological advancements in the manufacturing sector. Trade policies and export promotion strategies should heighten productivity and value addition in the manufacturing sector, so as to make local firms internationally competitive. Finally, with regards to FDI, the Government of Botswana should create an environment that could entice multinationals to invest in the local manufacturing industry. This, however, should be coupled with protectionist policies to avoid crowding out local manufacturers and exposing them to foreign competition.
  • Topic: Development, Economics, Economic growth, Manufacturing, Economic Development , Industrialization
  • Political Geography: Africa, Botswana
  • Author: Ratang Sedimo, Kelesego Mmolainyane
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: This study seeks to examine institutional frameworks that exist in Botswana to protect the rights of ordinary shareholders. There is no literature on the subject matter in the context of Botswana; hence this study attempts to fill in the literature gap. The study uses a variety of data collection methods, such as semi-structured interviews, the Choppies case study and lessons learnt from other jurisdictions. Findings reveal that ordinary shareholders’ rights protection involves the use of institutional frameworks. In Botswana, existing frameworks are not adequate to protect ordinary shareholders’ rights. Furthermore, the study shows that ordinary shareholders in Botswana are mainly exposed to risks of losing their investments, partially or entirely, in case of non-compliance to regulatory requirements as shown by the reduction in Choppies’ stock price from P1.20 to P0.40 between years 2012 and 2018. The study suggests that the existing institutional frameworks should be reviewed to ensure adequate protection of ordinary shareholders’ rights.
  • Topic: Security, Economics, Human Rights, Investment, Macroeconomics, Land Rights, Labor Rights
  • Political Geography: Africa, Botswana
  • Author: Marumo Omotoye
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: The construction industry (CI) is considered one of the most corrupt both internationally and regionally. Therefore, this study examined the views and attitudes of professionals in Botswana’s CI towards the role whistleblowing (or protected disclosure) can play in curbing corruption in the sector. A convergent mixed methods approach was adopted. Semi-structured interviews were conducted with key stakeholders from the construction industry. Furthermore, a self-administered survey was utilised to collect quantitative data from 117 construction firms. Data revealed that there was little awareness of whistleblowing legislation. Fear of retaliation or punishment and job loss, and a lack of education on whistleblowing were identified as some of the most substantial barriers to effective whistleblowing in the industry. From a public policy perspective, it is recommended that an emphasis be placed on improving levels of education and awareness on whistleblowing in the construction sector. In addition, there should be consideration to amend the Whistleblowing Act 2016 to include construction industry regulators, the Public Procurement and Asset Disposal Board, and private media amongst the list of institutions authorised to receive reports of impropriety in order to extend the scope of legal protection to whistleblowers in the sector. Recommendations for further research are provided.
  • Topic: Corruption, Development, Economics, Public Sector, Manufacturing, Economic Development , Private Sector, Industry, Whistle Blowing
  • Political Geography: Africa, Botswana
  • Author: Koketso Molefhi
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: The study examines the impact of macroeconomic variables on stock and bond markets development in Botswana using Autoregressive Distributed Lag (ARDL)-Bounds Test. The results indicate that macroeconomic variables have an impact on capital market development in Botswana. In the short run, real output, money supply and inflation have a positive influence on the development of the stock market, while real exchange rate retards its development. Real output further supports the development of the stock market in the long run. For the bond market, only two variables, inflation rate and lending rate have positive and negative impact on the bond market in the long run respectively, while none of the variables influence the bond market in the short run. Policy implications include increased efforts by policy makers to increase money supply, gross domestic product for the development of stock market, while the bond market development requires a decrease in lending rates.
  • Topic: Economics, Markets, Capital Flows, Macroeconomics, Economic Development
  • Political Geography: Africa, Botswana
  • Author: Kelesego Mmolainyane
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: This paper analyses impacts of fiscal policy on structural transformation in Botswana using structural vector autoregression (SVAR) model over the period of 1990 to 2015. The study uses an inclusive sustainable transformation (IST) index and government expenditure as proxies for structural transformation and fiscal policy respectively. Results show that prudent fiscal policy can be used as a major strategic tool for structural transformation in Botswana. Most evidently, IST index responds positively to government expenditure shocks over time. In addition, fiscal policy innovations dominantly account for movements in structural transformation in Botswana. Notwithstanding, Botswana has a lot of potential and opportunity to use its fiscal policy more effectively and efficiently to promote an inclusive structural transformation that leads to sustainable economic growth.
  • Topic: Economics, Economic structure, Macroeconomics, Fiscal Policy
  • Political Geography: Africa, Botswana
  • Author: Johanne Motsatsi
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: The objective of this study is to estimate the determinants of unemployment in the Southern African Development Community (SADC) region using annual data from 2000 to 2016. Given the characteristic of the data, the study adopts Fixed Effect (FE) estimation technique. For further analysis, the study also estimated the ARDL panel model to capture persistence effect of unemployment in the region. The FE results reveals that real GDP, foreign direct investment, consumer price index, credit to the private sector and interest rate are negatively related to unemployment. While trade openness, labour productivity and population have a positive sign. The results estimated with ARDL model are not very different from those of FE model, but we obtained a noticeably smaller estimates for ARDL model. Variables which have negative association with unemployment suggest that they are likely to reduce unemployment. Therefore, such indicators may be of interest to policy makers when formulating unemployment reduction strategies. In terms of policy advise, the study recommends the government of SADC member states to encourage the education system that can equip leaners with entrepreneurial skills and in-job practical skills, in order to promote high success rate of SMMEs as well as to provide skills needed in the labour market. It also recommended enforcement of free trade of goods and services in the region as a means of making the industrial sector an engine of economic growth in order to create much needed employment.
  • Topic: Development, Economics, Labor Issues, Employment, Labor Policies, Macroeconomics, Unemployment
  • Political Geography: Africa, Botswana
  • Author: Lillian Mookodi
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: This paper applies the Lerman and Yitzhaki (1985) inequality decomposition approach on food and non-food expenditures on the 2009/10 Botswana Core Welfare Indicator Survey; and the 2015/16 Multi Topic Indicator Survey datasets with an objective to see how overall inequality translates into inequality within each expenditure component. To test for a robustness of our results, we apply a simple bootstrap procedure to obtain the means, standard errors and confidence intervals for the component Gini coefficients estimates. The decomposition analysis results show that overall inequality based on the Gini coefficient of consumption expenditure within the groups has increased between the two periods from 0.498 to 0.533. These results suggest that this rise in overall expenditure inequality is due to the increased burden in the household budget of non-food spending, which tends to be more unequal than food spending. The consumption expenditure is very unequal on non-food items like recreation and hotels; health; education and transport. On one hand, lower Gini coefficients are observed for food; and clothing and footwear; these commodities are considered as necessities among others. This paper finally offers some possible policy measures to curb this consumption expenditure inequality.
  • Topic: Economics, Developing World, Inequality, Economic Inequality
  • Political Geography: Africa, Botswana
  • Author: Mpho Raboloko
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: The study determines the impact of infrastructure on economic growth in Botswana. The study employs an Autoregressive Distributed Lag (ARDL) estimation technique to determine how infrastructure affects economic growth in Botswana. The empirical results show that healthcare infrastructure has a positive and significant impact on economic growth in Botswana in the long run. The results further reveal that electric power consumption has a positive and significant effect in influencing economic growth in the short run. The results imply that in order to achieve higher economic growth, policymakers should consider accelerating improvement of healthcare infrastructure.
  • Topic: Agriculture, Economics, Infrastructure, Health Care Policy, Economic structure, Economic growth, Rural
  • Political Geography: Africa, Botswana
  • Author: Kedibonye Sekakela
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: A market-friendly regulatory environment is key for private sector investment. In this paper, we examine the impact of business regulatory quality on private sector investment in Botswana. The paper finds that the business regulatory environment stimulates private sector investment in the long term and this phenomenon occurs when the quality of bureaucracy improves, among other factors. Other critical factors affecting private sector investment examined in this paper include; corporate credit, output and public infrastructure investment. Private sector investment responds positively to increases in corporate credit in the short term but not responsive in the long term. Economic activities support private sector investment positively but weak. On the other hand, public infrastructure investment crowds in(out) investment in the short and long term respectively. Policy wise, Botswana should further deepen its efforts towards creating a market-friendly regulatory environment and also consider how business regulatory quality interact with other policy variables for better investment and growth outcomes.
  • Topic: Economics, Developing World, Regulation, Business , Investment, Economic Development
  • Political Geography: Africa, Botswana
  • Author: Masedi K. Tshukudu
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: It is clear that technology has brought about significant changes in the livelihoods of people, creating new forms of employment and advancing the traditional forms of employment for individuals. Many countries continue to invest in Information and Communication Technologies (ICTs) with the view to tackling some of the economic challenges such as unemployment. Botswana like other African countries has made annual budgetary allocations towards ICT Infrastructure. Despite, the Government’s efforts to invest and improve access to ICT, the country still faces a high unemployment rate, particularly for the youth. This study therefore, investigates the impact that access to ICTs has on the employment of individuals in Botswana. In order to provide a detailed analysis of the impact of ICTs on employment we apply a probit model for binary choice responses to being employed or not being employed, using the data from the 2014 Botswana Household Access and Individual use of Information Communication Technology Survey carried out by the Statistics Botswana. The empirical results provide evidence that access to ICTs collectively has a positive impact on employment in Botswana. However, disaggregating the ICTs forms presents slightly different results, e-skill training and access to the internet in Botswana are not significant in explaining an individual’s employment status, this may be associated with low uptake of internet and ICTs skills by individuals in Botswana. The policy message from this study is that there is a need for aggressive implementation of collective ICT. [In addition, there is need to improve collective ICTs infrastructure to create more employment].
  • Topic: Development, Economics, Science and Technology, Communications, Information Age, Economic Development
  • Political Geography: Africa, Botswana
  • Author: Koketso Molefhi
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: The study examines the impact of financial inclusion on employment creation in Botswana using quarterly time series data for the period 2004-2016. Using Autoregressive Distributed Lag (ARDL) model, we find that availability of bank branches, ownership of bank account and borrowing from the commercial bank have a positive impact on employment creation in the short run. Similarly, in the long run, availability of bank branches, ownership of bank account has a positive relationship with employment creation in the long run. Depositors with commercial banks has a negative bearing on employment creation, both in the short run and in the long run. Therefore, policies should be aimed at ensuring easy access into the financial sector by way of reducing costs associated with account opening as well as creating affordable deposit and borrowing windows to the financially excluded groups.
  • Topic: Economics, Labor Issues, Employment, Finance, Financial Markets, Macroeconomics
  • Political Geography: Africa, Botswana
  • Author: Tebogo Seleka, Thula Dlamini
  • Publication Date: 03-2018
  • Content Type: Working Paper
  • Institution: Botswana Institute for Development Policy Analysis
  • Abstract: We employ the Normalized Revealed Comparative Advantage (NRCA) index on data for the period 1961-2013 to examine the competitiveness of the African, Caribbean and Pacific (ACP) countries in the global sugar market. Results indicate that the majority of the ACP states had comparative advantage in the global sugar market during the period 1961-2013. However, most of these countries also experienced declining comparative advantage, except for a few African countries that emerged from initial states of extreme comparative disadvantage to marginal comparative (dis)advantage. This occurred despite the fact that these countries enjoyed tariff free access to the highly protected EU market. Mauritius, followed by Fiji, Guyana and Jamaica, recorded the strongest comparative advantage among the ACP countries. However, it recorded weaker comparative advantage than the leading comparator non-ACP countries of Australia, Brazil and Thailand, which experienced considerable increases in comparative advantage over the considered period. Overall, there has been convergence in comparative advantage among ACP states since the signing of the Lomé convention in 1975.
  • Topic: Development, Economics, Exports, Macroeconomics, Economic Development
  • Political Geography: Africa, Botswana