In: Finance
Discuss the preferential treatment policy under the Citizen economic empowerment programme of CEEC using the citizen motherland owned business category. [10 Marks]
Government has embraced citizen empowerment in its development planning process because of the low citizen participation in economic development in the country. Among the existing initiatives, include citizen reservation, where only 100 percent citizen owned companies are eligible to participate; price preference where citizen owned companies, joint ventures/associations of citizens and non-citizens and local companies are eligible for preference; and mandatory subcontracting to citizen owned companies. Furthermore, CEE Policy makes it mandatory for non-citizen contractors awarded Government contracts to sub-contract a minimum of 40 percent of works to citizen- owned companies, and transfer skills to sub-contracted citizen-owned companies.
The other existing citizen economic initiatives include: the
Economic Diversification Drive (EDD), where procurement is reserved
for local manufacturers and service providers regardless of
citizenship; Local Procurement Scheme (LPS), which facilitates
economic development in rural areas using public procurement in
line with the CEE Policy. The objective is to empower women, youth
and people living with disability in general, and specifically in
the rural areas in line with Section 66(3) of the PPAD Act. The
Scheme also introduces preference in tenders within the District
Administration Tender Committees (DATC) threshold, whether
administered by the DATC or Ministerial Tender Committees (MTC).
The Scheme requires that a 20 percent target quota be reserved for
the target groups in all tenders above the micro procurement
financial threshold, but within the DATC financial threshold at all
districts country wide.
Government is concerned that, despite the efforts to empower
Batswana through procurement, the price charged by the private
sector for purchase of goods and services by Government is
substantially higher than the market price. This means that
Government does not get value for money. Therefore, the private
sector needs to appreciate that by so doing, they are depriving the
public of essential services that are expected to be provided by
Government.
With regards to participation of citizens in the tourism sector,
Government reserves some licenses for citizen operators only.To
further enhance meaningful participation of citizens in the tourism
sector, Government has reserved certain concessions for allocation
to citizens only. Furthermore, a number of marketing initiatives
have been undertaken to facilitate the private sector to sell
tourism packages to the world and to create awareness of Botswana
as a tourist destination.
Meanwhile, Government will prioritise upgrading of infrastructure,
both physical and ICT, to tourism areas, and the private sector
will be expected to also contribute resources in this regard.
despite the existence of these schemes, effective citizen
participation in some sectors of our economy has not been
satisfactory, hence the decision to move from policy to a law to
ensure effectiveness in application and implementation of the
citizen economic empowerment agenda. The law will address the
inequalities of the past by transferring the country’s wealth to
disadvantaged Batswana, thereby allowing for more participation of
citizens in the economy.
In addition, Government has developed a Consolidated Framework for
Empowerment Programmes. A key feature of this Framework is the
proposal to separate economic empowerment programmes and social
upliftment schemes, which will be critical in promoting
entrepreneurship development and enterprise development.
The Framework acknowledges the relevance and importance of social
upliftment towards developing sustainable livelihood. However, this
model puts more emphasis on entrepreneurship to address
unemployment, economic growth, poverty eradication and economic
diversification.