03 Sep 2024

Government has directed all its institutions through the Economic Diversification Drive (EDD) initiative to procure all goods and services from local manufacturers, service providers as well as agricultural producers to promote local production and cut down the high import bill which has been a persistent issue in Botswana.

This was said by Minister of Trade and Industry, Honourable Mmusi Kgafela when answering a question in Parliament on Monday.

Hon. Kgafela said in an endeavour to revamp the implementation of the EDD initiative, the ministry continued to engage the private sector to facilitate market entry for SMMEs through registration of EDD certificates to local manufacturers, service providers and agricultural producers.

“Therefore, government uses its enormous purchasing power through use of preference margins to promote production and consumption of locally produced goods,” he said.

In addition, he said to promote participation of citizen manufacturers, His Excellency President Dr Mokgweetsi Eric Keabetswe Masisi assented to the Economic Inclusion Act in 2021 which was facilitated by the Ministry of Entrepreneurship.

Moreover, he said the Ministry of Entrepreneurship was facilitating the Citizen Economic Empowerment Policy which cut across all government agencies and implemented through various initiatives, programmes and schemes.

He said among the sectors that had shown significant growth in terms of manufacturing were textile and wearing apparel, stationery, chemicals, milling, beverages, bread and confectionary as well as pharmaceuticals.

He indicated that a total cumulative purchase of goods and services by government institutions amounted to P57.286 billion worth of goods and services has been recorded since the inception of the EDD until 2021.

He said out of the figure, P30.548bn (53 per cent) represented purchases from local manufacturers and service providers (EDD purchases), out of which P6.651bn (12 per cent) were manufacturers. He further said the value of purchases from September last year to March this year was P189m, out of which P130m (69 per cent) was used on goods from local manufacturers and service providers (EDD purchases).

“From this amount, local manufacturers accounted for P81m (43 per cent) and service providers P49m (26 per cent),” he added.

He further said goods amounting to P59m (31 per cent) were sourced from retailers and there were no foreign purchases.

“My ministry has realised that there has been a significant improvement in the growth of purchases from local manufacturers for seven months in the last financial year 2023/2024,” he said.

He stated that SPEDU offered incentives to support businesses setting up in the region to ensure sustainability which included fiscal at five percent corporate tax for the first five years, 10 per cent tax thereafter, zero customs duty on imported raw materials as well as rebate customs duties and value added tax for manufacturing exclusively for export outside the Common Customs Area (CCA).

Mr Kgafela also disclosed that statistics showed that employment in the manufacturing sector for the past two years was 50 853 in 2022, comprising 31 792 males and 19 061 females and also 56 947 last year comprising 29 798 males and 27 149 females.

Kanye North MP, Mr Thapelo Letsholo had asked the minister to apprise Parliament on the status of manufacturing in Botswana, the steps being taken to bolster the sector and the impact on reducing the import bill for commodities that are now produced locally, over the past three years.

Mr Letsholo also asked how the new procurement policies and laws supported local manufacturers, especially citizens. Ends