Senior Business Reporter
The signing of 1 billion pula credit facility between Zimbabwe and Botswana last week, which is aimed at capacitating the local private sector, has catapulted relations between the two neighbours to a higher level.
Botswana President Dr Mokgweetsi Masisi, described the inaugural Bi-National Commission (BNC) between his country and Zimbabwe as “the beginning of a long journey which is ahead of us”, and economic commentators in the country share his views.
From being sworn enemies in the last few years during the tenures of former Presidents Robert Mugabe and Seretse Khama Ian Khama, Zimbabwe and Botswana have signed potentially game-changing Memorandi of Understanding, which are expected to not only boost their respective economies, but also forge closer political ties.
For countries belonging to the same regional bloc, SADC, the bad relations were seen as “un-African and retrogressive”.
President Masisi said they initially wanted to extend a P600 million facility, but later decided to increase it to P1 billion so that the local private sector can access more and boost operations.
A communique on the BNC says the discussions between the two Presidents were designed to “further strengthen and deepen the bond of friendship and cooperation between Zimbabwe and Botswana”.
Six agreements and MoUs, including cooperation in the energy sector to ramp up the development and industrialisation efforts of the two countries, were “welcomed” by the leaders.
Other agreements and MoUs were on Geology, Mining, Metallurgy; Extradition Treaty; Diplomatic Consultations; Rules and Procedures Governing the meeting of the BNC; and Cooperation in the field of Science and Technology.
The MoUs on Geology, Mining, Metallurgy are seen as critical in boosting cooperation in the mining sector, particularly the diamond industry in which Gaborone has “considerable experience and expertise”, due to several years in the business.
Further, the two Presidents called for an increase in “volumes of trade and investments between their countries”.
In this regard, they called for a business forum to be convened on the sidelines of the Zimbabwe International Trade Fair (ZITF) set for April 23 to 27.
Last year, a high powered Botswana delegation that included the Botswana Investment and Trade Centre (BITC), participated in the ZITF, and had a cocktail organised by the Zimbabwe Investment Authority (ZIA) to cement ties.
BITC, is a Botswana investment and trade promotion agency of .
President Mnangagwa said he was pleased that the inaugural BNC session had “set the legal framework for broad cooperation in the agreed areas”.
“Through our collective efforts, may the conclusion of these agreements not be an end in itself, but the beginning of greater bilateral cooperation for the benefit of our people and future generations.
“History has shown us that where people and nations get used to working together, they grow to share the same vision and aspirations. I am confident that Zimbabwe and Botswana have set themselves along this path,” said President Mnangagwa.
On his part, President Masisi said the BNC was the beginning of a “strong and long journey”, and “more work still needs to be done”, to allow private sector businesspeople and private citizens to play a key role in further strengthening “our bilateral relations”.
“There is no doubt that our success in implementing the commitments we make today will go a long way in ensuring a conducive environment for our people and businesses to increase their interaction,” said President Masisi.
Industry speaks on ties
Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu told The Sunday Mail Business that beyond the signing of the P1 billion credit facility, the “improving relations” were critical to promote economic growth in both countries.
The two countries were now discussing “possible trade issues”, with the hope of boosting trade volumes.
“We believe we can do much more than our current levels of trade,” said Minister Ndlovu, adding that there was a marked improvement in volumes last year “compared to the last four years or so.
“. . . when we were looking at it, 2018 was really quite good and we hope to specifically improve on our exports to Botswana markets,” said Minister Ndlovu.
Economic analyst Mr Persistence Gwanyanya believes the facility signed between the two countries is “more realistic”, adding that it was “good for Botswana to diversify its economy by considering investing offshore in countries such as Zimbabwe, which is one of the countries with significant investment opportunities in Africa”.
“Look here, we have more than 40 well sought-after minerals in the world and Botswana has only one, diamonds. This means there are significant business opportunities to grab in Zimbabwe, as the country tries to rebuild.
“You should also know that Botswana is rated as the best investment destination in Southern Africa and can easily attract international capital to invest all over the world.
“But what is important is to ensure that we improve our investment environment to also attract this capital from Botswana. We really need to work hard on this score especially through working on ease of doing business reforms.”
Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe also said it was important for Zimbabwe to strengthen relations with its neighbours as they were a huge potential market for local manufacturers.
“Look, Botswana wants to grow its economy and Zimbabwe wants more investments; and Botswana has a fairly high ranking for its banks in terms of attracting capital from abroad,” said Mr Jabangwe. So when Botswana diversifies into Zimbabwe, local businesses can also take advantage of some of these joint ventures that governments are forging, and supply some of their products into Botswana and grow their businesses.
“So we expect the Bi-National Commissions to help local entrepreneurs to penetrate that market.”
CZI has already signed an MoU with Business Botswana last year during President Mnangagwa’s State visit, in a bid to deepen relations with fellow private sector players.
Zimbabwe Exports to Botswana were US$29,08 Million during 2016, according to the United Nations COMTRADE database on international trade. This was a measly contribution to Botswana’s import bill of US$6,1 billion.
The trade statistics are now expected to jump going forward following the credit facility extended by Botswana, and a general improvement in relations.