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Private sector taps into EU’s P185m fund

Mmegi Online. Botswana

Private sector taps into EU’s P185m fund

By Thato Moseki. Correspondent

25 September 2009

The Botswana Confederation of Commerce, Industry and Manpower (BOCCIM) as well as the Botswana Exporters and Manufacturers Association (BEMA), are positioning themselves to tap into the P185 million capacity building facility made available through the Interim Economic Partnership Agreement with the European Union.

BOCCIM and BEMA are business sector organisations representing a large section of Botswana-based private entities of various sizes and engaged in diverse industries. Botswana, together with Lesotho, Mozambique and Swaziland, signed an Interim Economic Partnership Agreement (iEPA) with the European Union (EU) in June this year, following approximately five years of negotiations.

Among many other clauses relating to market access for Botswana goods into the EU, the iEPA incorporates a capacity building facility to enable the local private sector to take advantage of the easier access to the European market.

Responding to enquiries from Business Week, the EU’s Head of Section (Politics, Trade, Information and Communication), Lena Sund, said the capacity building facility was an element of the EU’s economic integration programme under its European Development Fund (EDF), the main instrument for development cooperation. Botswana is among countries that can tap into the P185 million dedicated for EPA implementation, which falls under the 10th EDF.

Lund revealed that BOCCIM and BEMA members had already positioned themselves to access this support.

"Capacity building is on-going and organisations in Botswana, such as BOCCIM, are actively organising seminars and conferences with this objective. For instance, in August BOCCIM organised seminars around the country including in Gaborone, Francistown and Maun.

"BEMA also recently held a workshop in Gaborone to sensitise their members of the benefits of the EPA," she said.

At the recently held BEMA Annual General Meeting, members expressed concern that the iEPA’s capacity building component would become choked in red tape, to their disadvantage. However, the EU Head of Delegation Paul Malin said local bureaucracy would be the biggest challenge to capacity building and pledged the EU’s support in addressing the issue.

For her part, Lund explained that the capacity building component is meant to ensure that the business community is adequately informed of the iEPA’s benefits and that these are implemented to increase exports from the iEPA signatories - of which Botswana is one - into the EU market.

It is hoped the capacity building component of the iEPA will help Botswana’s private sector meet the demands and regulations required of exports to the EU.

The local private sector is hoping this component will enable it to compete with EU entities for their market space, opened up via the iEPA. Capacity building is also expected to empower local entities to compete with increased imports from the EU into Botswana and other countries.Under the iEPA, Botswana enjoys Duty-Free Quota-Free access to the EU, through which it was able to save P17.3 million from beef exports alone in 2008.

The iEPA scrapped the eight percent the Botswana Meat Commission (BMC) was paying to the EU market for its exports, enabling the parastatal to hike its prices to local farmers.

Beef and diamonds are Botswana’s major exports to the EU market and these two commodities support a significant proportion of local labour/livelihoods as well as downstream industries.

These two major exports are dominated by quasi-government entities, with the private sector’s contribution largely limited to producer level for beef and cutting and polishing level for diamonds.

Organisations like BOCCIM and BEMA are thus hoping the iEPA and its capacity building component will enable diversified and competitive exports to the EU, including textiles, cultural items, electrical products, herbal products, stationery and many others.

Negotiations are continuing between Botswana and other SADC states with a view to ironing out Rules of Origin and tariff schedules to allay fears of unfair competition in the region, from powerful EU exporters.