1. LEADERSHIP AND DEVELOPMENT WORKSHOP FOR MOZAMBIQUE. HOW TO MAKE YOUR ECONOMY COMPETITIVE BY: Supporting the Domestic Private Sector while attracting Foreign Investment Thembo Lebang Executive Director Botswana National Productivity Centre Tel/Cel: +267 3913444/+267 71309875 E-mail: thembol@bnpc.bw

2. CONTEXT All developing countries are under pressure to diversify their economies and reform their public sectors The prosperity of a country is dependent upon the productivity of its companies (Michael Porter) Competitive companies are created by competitive clusters As the custodian of national productivity, BNPC needs to create competitive clusters in order to drive productivity improvement. The challenge is how to utilise foreign investment and the public sector reform process to grow the domestic private sector and create competitive clusters.

3. TYPICAL RESPONSE TO THE NEED FOR ECONOMIC DIVERSIFICATION AND PUBLIC SECTOR REFORM DIVERSIFICATION TOOLS FOCUS ON SMME’S PRIVATIZATION FOREIGN DIRECT INVESTMENT HOWEVER, FOR DEVELOPING COUNTRIES WITH SMALL LOCAL PRIVATE SECTORS:PRIVATIZATION AND FDI MARGINALISES THE LOCAL INDUSTRY AND CITIZENS

4. THE REQUIREMENT FOREIGN DIRECT INVESTMENT PRIVATIZATION AND ECONOMIC DIVERSIFICATION CITIZEN ECONOMIC EMPOWERMENT EQUAL COMPETITIVE CLUSTERS

5. Buy Local Campaigns To save and create jobs Empowerment Charters to Achieve Local Strategic Imperatives Management of Supply Chains to drive Multiple levels of change TYPICAL INTERVENTIONS The are three types of Interventions; Each with a different focus STRATEGIC INTERVENTIONS

6. Not Black Economic Empowerment (SA) South Africa is the only country in the Region with a large vibrant diversified Private Sector. BEE in South Africa is being used to rectify inequalities and redistribute wealth. The other Regional countries are challenged with diversifying mainly commodity driven economies and creating competitive private sectors. The proposed approach intends to institutionalise equality and create wealth.

7. Botswana has had limited success with Policy driven interventions THERE HAS BEEN SOME ATTEMPTS TO UTILISE THESE INTERVENTIONS IN BOTSWANA; WITH LIMITED RESULTS, DUE TO : LIMITED SIZE OF THE LOCAL PRIVATE SECTOR POOR LOCAL SUPPLY CAPABILITIES POOR PRODUCT QUALITY UNDEPENDABLE SUPPLY CHAIN

8. SOME SUCESSS ACHIEVED AT DEBSWANA LEVERAGING THE SUPPLY CHAIN MANAGEMENT Results to date – 17 Companies relocated – BWP 56 Million Investment – 561 Jobs Created – 52 SMME’s Upgraded to win tenders from BWP 60, 000 to BWP 4 Million Work In Progress – 7 Companies relocating – 27 Million projected Investment – 335 Jobs projected to be created

9. Why was Debswana Successful? Developed a Citizen Economic Empowerment Policy. Put in place a Business Development function capability within their Supply Chain Management function. Worked with suppliers to attract investment, create JV’s and upgrade SMME’s. The approach was policy and project driven, not just policy. The Government has recently achieved success with diamond beneficiation with The Diamond Trading Company relocating to Botswana, coupled with the development of a Diamond Technology Park

10. THE DOMESTIC PRIVATE SECTOR VALUE PROPOSITION ECONOMIC DIVERSIFICATION CITIZEN ECONOMIC EMPOWERMENT SUSTAINABLE ECONOMIC GROWTH SUCCESSFUL BOTSWANA THIS CAN WORK IF LOCAL REALITY IS TAKEN INTO ACCOUNT

11. Opportunities for Mozambique? There could be value in evaluating and prioritising all large capital projects, be they developmental or investment driven, Government, Donor or privately funded, on their ability to grow the domestic private sector. Project potential for further beneficiation\value adding, supply chain development, skills and technology transfer, needs to be fully evaluated, encouraged, incentivised and where possible made non negotiable to win the tender or the investment opportunity. While the continuing opening up of the economy with the resultant increases in investment is critical to Mozambique’s future, a vibrant competitive domestic private sector must be a key outcome of the process.

12. Conclusion My fellow delegates, we in Botswana are still young in this process and learning as we go along. Tis Region has no choice but to soldier on. LET US SWEAT IT OUT TOGETHER!