Now more than ever, diamonds are a huge source of income for Botswana, and De Beers is about to move its trading division to GaboroneBotswana offers a unique experience to people through an instilled feeling of peace, stability and democracy. However, that has not been achieved overnight. Those values have been shaping Botswana for decades now. What are the key differentiating features that make Botswana such a unique experience, also in the context of Africa?
You have to understand the Kgotla system to understand Botswana. This can be compared to the town hall meetings you are familiar with. Everyone has his or her own views until some form of consensus is reached. The Kgotla system embodies the same type of concept, where everyone is free to air his or her views. That is the core of the democratic system in this country. The Kgotla is also where justice and discipline is dispensed. For us, the words democracy, tolerance and stability stems from the Kqotla system. You do not gag anybody.
Then there is the planning aspect. You have to appreciate that not all development can take place at the same time. There has to be a process. We attained our independence in 1966 and our Constitution takes into account the very elements I am trying to articulate. These give us the stability we have in the country. We have a multiparty democracy, and this is what gives rise to peace and understanding, and therefore the development process we have achieved.
Moving onto the mineral sector, His Excellency said in an interview with World Report last week that you now need to diversify from the diamond dependent economy. But you will not diversify away from the mineral sector, but you will diversify deeper into the sector. What are your long-term and medium-term goals and priorities as a ministry?
I should confirm that the discovery of minerals in this country is both our doing and it could potentially be our undoing, particularly if the diversification program within the sector and outside the sector were to falter through our own mismanagement. Because our economy is linked with the world economy, obviously if there is a problem in the US, Europe, China or Japan, it will affect us. 2008 was a prime example when the prices went down and we were not able to sell. All of the statistics we are talking about could not be achieved, on account that we could not sell. But the priority within the mineral sector is not just to depend on diamonds, we are looking at other minerals such as coal.
There are 200 billion tonnes of coal. We are using that at the moment to generate power and we are spending some 11 billion Pula. We decided that given the global downturn, we would spend money and prioritise the generation of power. We are currently developing some 600 MW of power in this country to avert a situation where our dependence on Eskom in South Africa is reducing on agreement, and unless we are able to produce power in our own country we will be left high and dry. This is why we are prioritising this. We hope that we should be able to have achieved 600 MW by the end of 2012.
We are not only looking at power generation through coal – we are undertaking a consultation on solar energy. We are also conscious of the fact that coal has adverse effects in terms of carbon emissions. Limestone is supposed to reduce the emissions. We are working together with the World Bank and they could not have offered us 50 per cent of the funding if we did not meet the minimum standards for carbon emissions. Power generation in all forms is our priority.
We have also prioritised water, but in order to have water right across the country, you need power. We are currently building three dams, which should hopefully have some 530 million cubic metres of water.
About 138 new prospective licenses have been issued for the exploration of uranium according to our research. Alongside the coal industry, could uranium be the new diamond for Botswana?
We want to develop uranium, but you do not want to be caught in a situation where you will be dependent on any single commodity. If it can make a contribution, then why not, but in any case we are talking about something that is not going to happen in the next two to three years. I would like to believe that we can do it in three years, but we are talking about private sector participation, and they move at the pace that would enable them to develop the product. But yes, definitely.I would like to move onto foreign direct investment now. CDC, the UK government’s development finance institution has designated stg£1.2 billion to invest in sub-Saharan Africa. What are Botswana’s competitive advantages which make it deserve a chunk of that investment?
The first thing we talked about was stability and the country’s attractive tax regime (a double taxation agreement for example). This is facilitating migration from London to Gaborone. Labour and training is also important. We are able to communicate with the UK and use the training institutions in the UK.
Another comparative advantage we have is ethical standards. We are rated as one of the least corrupt countries in Africa. We think that should be one of our comparative advantages. The way we manage our finances, the auditing system and the Ombudsman in terms of general administration work well. I think the opposition in parliament is also a good institution, as much as they give us trouble. The foreign direct investor will have a safety net in terms of our own governance.
Infrastructure is also important, as well as the judiciary and respect for contracts. People here, whether they are foreign or local can go to courts and expect fair and just decisions without due interference from the legislation or the executive. I think given our history, this should give us a comparative advantage.
WORLD REPORT: Debswana is a shining example of public-private partnerships. What is your personal evaluation of that cooperation in Botswana?
I am part of it. It is a mining operation. It is based on the fundamental understanding that investment must earn a reasonable return, and that predictability in terms of not being unduly whimsical or frivolous as a people or a government means that partnerships survive on that. Partnerships survive on a fundamental respect for human rights. I do not run to Debswana on a daily basis and tell them what to do. When I say we are not whimsical, I mean that we do not change our laws every month or every other year. People can trust our tax regime and if it has to change, it has to be for a good reason. We do not tamper with that because we know that it affects the confidence of our partners and the perception of investors.
We want more PPPs. We have amended the law to allow for private independent power producers.
How has your previous ministerial experience and your academic experienced shaped you into the leader you are at the moment?
That is a difficult one. I suppose firstly I have always been involved in the public sector. I have only had a stint in the private sector after high school for two years. I have always wanted to work for government and that was my whole ambition. It was also a feeling of gratitude to my own people for the schooling and training I have had. Starting off in the Ministry of Finance and Development Planning helped me to have a broader view of what government and governance are all about. I also had a stint as Director of Public Service Management, dealing with people, managing human resources and taking them out for training and offering scholarships.
I obtained an overview of what we are as a country, where we started and how through proper and realistic planning as well as prudent management of our limited resources, we managed to do this. If we had more resources, we would probably not have been as prudent. All of this has helped me to focus and to have a consistent and realistic approach, and a pragmatic view as opposed to utopian approaches.