As he covers the New African September edition, President Mokgweetsi Masisi spoke to our Editor Anver Versi, on a broad range of issues from corruption, presidential term-limits and the current economic environment including the country’s difficulties in diversifying from diamond-dependant economy. Here is the edited version of their conversation:
In keeping with the AU’s declaration of 2018 as Africa’s Anti-Corruption Year, Botswana hosted regional conference on battling corruption organised by the Southern region offices of the UNECA, the AU and the Directorate Corruption and Economic Crime of Botswana. According to Transparency International, Botswana is Africa’s least corrupt country, but do you see threats from this quarter?
There are many threats. One is that those who perpetrate corruption never cease busily identifying loopholes and gaps. They never cease in finding new coalitions and new methods –particularly now that we are increasingly digitizing.
The transition from manual payment systems to electronic payment systems has unique challenges. If that can be broken through, such as through hacking and methods like that, it presents a lot of risk.
But we also see risk that’s brought about by new values that emerge as more convenient products and services and opportunities to spend on those leisure styles emerge and the appetite for that grows. This may not necessarily be targeted at promoting corruption itself, but maybe targeted by generally marketing a good or a service.
There is always a threat to a degree to which those who man institutions to stem corruption, to prevent corruption, to investigate corruption, can get shaken. They too are exposed to temptation or persuasion and if our laws, our systems are weak at one end, this may have a ripple or deleterious effect at the end.
For example, if our judicial system was compromised in one way or the other that would clearly weaken our capacity to contain and deal with even known corruption because the court system may not be able to process it.
So, retaining a balance and a temperament for the maintenance of good standards, for the maintenance of good governance, is absolutely crucial. No one particular part or activity stands on its own – there’s a lot of interrelatedness.
Is it possible that the contagion of corruption could approach from outside your borders or does that not worry you?
You know what, corruption is corruption. You can never run a country and be isolationist. So, there’s no sense in trying to worry and thinking you are going to stop corruption by not allowing people into your country.
Because Botswana is landlocked – or sea-challenged, however you want to look at it – it goes without saying that Botswana will have to depend and work closely, collaborate with its neighbours near and far.
Designing the governance system to protect its interests – and part of its interests are its integrity and the integrity of doing business – that’s the application of the rule of law.
So, the new influx of people that is coming to Botswana has not worried you?
No, no, no. We just govern this country firmly and properly; people come and go. We have systems that filter people coming in, going out and in the event that the filter doesn’t work so well, you have an internal filter or investigation and you identify the culprit or culprits and you deal with them.
On a continent where several leaders are reluctant to leave office when their time is up, the Presidents of Botswana actually leave office even before the end of their term as is the case with former President Ian Khama. How did this admirable tradition evolve?
Let me just correct it. He didn’t step down with one year to go, he just had a transition as prescribed in the Constitution. [Term limits for Presidents is 10 years, so since Khama became President before fresh election, he had reached the end of this term].
The tradition started with President Masire, who stepped down on 31st of March in 1998 and the new President then, President Mogae, came on board on the 1st of April 1998. He stepped down on the 31st March 2008 and on the 1st of April 2008, the then new President Khama stepped in.
Then President Khama carried the country until the 31st March 2018 and I stepped in because I was Vice President from 1st April 2018; and come 10 years later, I too, on the 1st of April of that year will be a former President.
But it is an unusual system.
Not to us. We like it. It works for us. By the way, it doesn’t have to be 10 years; it’s a maximum of 10 years, so if at an election, like the one I’m going to hold next year, my party loses, then I’m out.
Coming to the economy. What was the impact of the financial crisis in terms of your external dealings?
It was pretty strong. We had to adjust our budget, we lowered our spending, we became more frugal. We just cut off a lot of stuff but we also put in safety nets for those who were at the very bottom end.
It was difficult; we are still feeling the affects of that as we come out the recession because it is only now that we are able to start implementing the plans that were suspended then.
It’s a difficult sell because people’s memories tend to forget quickly. When you talk about a bridge for instance, or a school, that was in the plan before the recession, and they see the same school in the plan now, it looks like you’ve been making empty promises all along. However, the reality is that there wasn’t the money to do it.
But we are proud of how we managed the recession and the stewardship of present issues. And when we looked at the other countries, we didn’t see as many that may have coped as well as we did. It’s also a testament to our frugal management of the economy and the fundamental micro-economics – and being disciplined with our budget.
If my memory serves, Botswana hardly ever had a deficit budget every year for a long time.
Yes, for a long time, we kept on the surplus side but over the last few years, we’ve had a deficit – we’ve had to; we have a pretty big deficit now.
And the growth rate?
Well the growth rate has picked up a bit as the world economy has recovered. But we are still very heavily dependent on diamonds. And as you know, the extractive sector of the economy is inordinately dependent on external or exogenous factors. If the economies of the procuring nations suffer, we suffer twice as hard.
What is the situation now in terms of diamonds?
It has improved. I mean diamonds have been selling fairly well but there are always threats. Tight now, one of the threats that we see emerging to our diamond sector is the emergence of the lab-grown diamonds. But we’re assessing it; keeping a very close eye on it with our partner.
With the lab grown diamonds, are they used for jewellery or are they…?
No, they are essentially industrial. But they have now started growing them as retail jewellery pieces. But they will never be the same. There is a diamond and then there’s a lab fake and it’s not a diamond. It will never be a diamond.
How is the shift from London for the De Beers valuation office to Botswana working out?
It’s working well for good reason. We have just brought the buyers, the traders, the manufacturers, closer to source. And the diamond is rare; it makes compelling selling when you can buy close to where you get it, from the earth, you are certain, more certain of where it’s from.
You are able, if you so wish, to go and witness the process of extraction of the stones. We have airports at all these places where you mine diamonds. The facilities security is very good; there is sophisticated machinery and you can track a truckload of earth and follow it as it is crushed, washed and separated and you begin to see the glitter. It’s a wonderful experience. Exotic.
Have you had any such experience yourself?
How could I not? I’m President of Botswana! You should see it. There was a time when I saw a journalist melt at the sight of this enigmatic experience. It was when I saw him observing what was dirt almost seamlessly converting to a rare diamond.
How much of the cutting is done here?
Not as much as we would like. We would like to grow that (cutting) and the whole value chain: the beneficiation and jewel development, a lot of that is still externalised. But it’s a journey that we are on.
I think De Beers used to have a policy of controlling supply at any one stage. Or have I got that wrong?
No, you must have got that wrong. It’s the market that will determine supply; the demand will determine supply and we’ve shifted in policy slightly, we used to extract as much as possible and if the demand wasn’t so high, we would stockpile.
We don’t do that anymore. It doesn’t make sense because the system has become so efficient that if the demand grows, we can simultaneously grow supply. So, we keep the diamonds in the earth.
For a long time, you’ve had a programme of active diversification away from diamonds, how is that going?
We are trudging along. It has its ups and downs and major challenges are to do with factors of geography. We are surrounded by neighbours and have no access to the sea. The cheapest means by which you can move your goods, is obviously by the sea. Our railroad network has not changed too much since independence – except we have spurs going to our mining areas.
We’re in the process of constructing a railroad bridge with Zambia to connect the two countries. So, it is an extension of the rail line from Motsetse to Kazungula. We are developing our infrastructure, as you know, from scratch.
We have a vast land mass which is semi-arid, and we depend on other countries from which we import our fuels and machinery and therefore, the unit cost of the infrastructure development is uniquely high.
But more than anything else we sit smack next to a huge economy, a powerful economy, that’s dominated the region for more than a century [South Africa]. Try diversifying; I think we’ve done a pretty good job of it in the attempts we’ve made but they are still inadequate. So, it is something that is before us and will be with us for a long time.
The other challenge we’ve had is an internal one. We have a pretty small market so for our economy to diversify sufficiently, we need to find the markets and take the product to the markets.
There are all these intricacies but as we speak, we produce a number of things of pretty high quality beyond the diamonds and beef and we’ve domesticated some production of a number of things that we otherwise didn’t have the skills for.
We have, with our limited infrastructure, developed a hospitality product that wasn’t there and it’s growing increasingly: restaurants, hotels, are growing. Even as a percentage of contribution to GDP, our tourism sector has grown tremendously, phenomenally, and we intend to grow it even more. That’s an aspect of diversification.
Is the focus still on high value tourism?
Well yes, but we are also going to adjust to accommodate in some places higher volume tourism within a domestic region or even targeting international visitors but in the pristine areas, we will keep it at low volume, high value because the minute you increase volume, the value goes.
Some years ago you used to assemble cars and trucks in Botswana and then you used to ship them to South Africa and some other African countries. Is that now a non-starter?
Well, it is always a starter if only the collaboration between ourselves and South Africa could be realised. But they objected to a number of things in the definition of manufacture and they made the decision as they did and our plant closed.
And there has also been some talk that perhaps Botswana could be a centre for high tech industries, machinery, etcetera, that could be made here.
Yes, that’s why we are developing the special economic zones. We have identified a number of areas that are a priority to develop in the ICT sector and various high tech industries. If you can produce products that could be a fraction of the value of a diamond, high skill, high tech, small, cheap to transport, that could be an industry that we develop. Therefore, you could evacuate them by airplane.
And also, there were plans of making Botswana the major financial centre in all of Southern Africa Region. How are those plans?
We are still working on that, we are developing the infrastructure for it. The policies are in place. We are just financing the implementation of that. ICT was a major factor.
What is your vision during your term? What would you like to see happen with the time you have?
I would like to see a vibrant, diversified, successful Botswana; at peace with itself, with its neighbours and the world and a reference point for peace, democracy, good governance.
What is the employment or unemployment situation?
At the last count, it was just over 17% or 18%. It obviously would be greater now because the rate with which we were able to create jobs has not kept up with the rate of those who graduate into the job market. We have a youthful population, so you inadvertently would have a bulging population of those who seek employment.
The priority of this government is to create jobs and you only create jobs by diversifying the economy by taking radical actions to lure investors.
Right now, we are in the process of reviewing our immigration policy; we want to be a hosting centre for meetings and conferences. We want to attract those people who could produce stuff in large quantities and still be able to export them. We are ramping up our diplomatic engagement so we would find sympathy and collaboration with countries near and far so, our product and services could extend that far.
We are investing in R&D in the areas that we have identified we have a competitive advantage in. There are some short-term things and some are long-term. But more than anything else, we want to try and grow an entrepreneurial spirit.
Mokgweetsi Eric Keabetswe Masisi was sworn in as the 5th President of Botswana on 1st April 2018. He follows Ian Khama, who as has become traditional, stepped down from office to make way for his Vice-President Masisi with 18 months still to go to the next elections in October 2019.
Masisi’s father, Edison Masisi was a long-serving member of Parliament and had been a member of the Cabinet on several occasions. While at school in Gaborone, the young Masisi showed considerable talent for theatrical acting, including an acclaimed performance in a stage version of Cry the Beloved Country. After graduating from the University of Botswana in 1984, he became a teacher and moved up the national education ladder. In 1989 he obtained a Masters in Education from Florida State University and later worked for UNICEF in Botswana.
After becoming a Member of Parliament for the ruling Botswana Democratic Party, he rose rapidly to become Minister of Education and Skills Development in October 2014. President Khama appointed him Vice-President the same year. Khama also appointed Masisi as the Chancellor of the University of Botswana in July 2017 following the death of former President Quett Masire who had served in that capacity.
Until the global recession of a few years ago, Botswana was one of the fastest growing countries in the world but its heavy dependence on diamonds and other extractive industries meant that growth slowed down and unemployment increased. But the diamond market has stabilised and the outlook is promising but Masisi will need all his skills to shepherd the country to renewed growth and tackle underemployment while balancing the budget. With his inherent charm and inter-personal skills, it seems that Botswana has once again succeeded in getting the right person in the right job at the right time.