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Building Inclusive Institutions in Africa; Economic Lessons From Botswana

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                “Africa has got to a point where she must live and talk inclusivity” Paul Collier (Professor of Economics and public policy, Director for the centre for the study of African Economies at the University of Oxford.)

“An Economy cannot be better than the existing institutional structures responsible for her existence and functionality”.

Gospel Obele -21st Century Development Economist.

Previously we had discussed how institutions evolved and shaped African Economies overtime. Extractive political institutions, formulating, coordinating and implementing policies and programmes that invariably shaped economic institutions and maintained vicious circles that empowered these institutions to stay and continue. Most African countries, happen to be victims of extractive institutions. As noted earlier, our efforts to develop will yield no better results than the institutional structures that orchestrates them.

More remarkably, Botswana, finding herself in the midst of nations who are extractive driven, and had a high possibility of being affected, has successfully navigated through and built working inclusive political and economic Institutions. Which has earned it world recognition of one of the fastest growing and developing economies in the world. Below are a few lessons we can learn from Botswana on how African economies can build working inclusive institutions.

  1. INDEPENDENCE AND INSTITUTIONS; Botswana, unlike many other African economies at independence redefined and created a strong interplay of inclusive institutions internally. This was shaped by institutional drift and critical junctures brought about by colonialism. For Sierra Leone, Zimbabwe, Nigeria, and others, independence was an opportunity missed, accompanied by a re-creation of same type of extractive institutions that existed during the colonial period.
    LESSON: Critical junctures here represent a critical moment in time, to put into context, a critical moment in economy that could shape economic trajectory. At independence, a critical juncture, Botswana built inclusive institutions. Though independence remains a past event, but we can leverage on critical moments(E.g. the switch from military to democracy rule, a major national conference where economic matters are discussed, at elections etc.), to make decisions that moves us closer as a nation and a people towards inclusiveness.
  2. POLITICS AND ECONOMY: Botswana have been fortunate, to have leaders who decided to contest for powers in election, rather than subvert the electoral system as many post-independence leaders in sub-Saharan Africa did. At independence the political institutions, limited capacity and some degree of accountability of chiefs to the people. This political network of institution, created a platform to build more working institutions. This made the Botswana leadership highly accountable to her people and gave citizens the room to checkmate leadership excesses. Also, she put in place a good legislative system to protect lives, properties, intellectual rights etc. which were in a bid to keep and strengthen the process.
    Also, the Botswana meat commission established in1967, instead of expropriating the cattle owners,  they played an important role in developing the cattle economy, which improve and contributed to economic development and increased support for inclusive institutions.
    LESSON: Economists have agreed that politics is an important tool that could either make or mar an economy. I believe Botswana is far beyond just being fortunate, she had leaders who got to leadership positions with a mind of servant hood leadership, leaders called to serve and not to be served even when they had the opportunity to. If we adopt the path of the former, there is hope for political and economic inclusiveness in Africa. As leadership, policies, programmes, plans and execution would geared to meet the desires of the WE, which fosters growth accompanied with even development.

    Botswana Moneynote

    Botswana Moneynote

  3. Ethnicity, Natural Resource and Economic Prosperity: Botswana’s early growth relied on meat exports. Things changed drastically, when she discovered diamond. They had successfully, shielded these resource from the Europeans in a bid to protect their autonomy. The first discovery was in Ngwato land, but just before this was announced, the chiefs instituted a law such that all sub soil mineral rights were vested in the nation not tribe. This was ensured that diamond wealth would not create great inequalities in Botswana. The revenues from diamond were used to build the state, invest in education and set infrastructures in place for fast paced growth. In Sierra Leone and other nations, natural resources created conflicts, civil wars and to enrich a few at the expense of the majority.
    LESSONS: Natural resource should be an added advantage that should foster high growth rates with genuine development. Although it’s quite an irony how nations with less natural resource and ethnicity are more inclusive compared to nations with high natural resource and ethnicity. We must understand therefore that cultural diversification and natural resource endowments are good and cheap platforms to leverage on for shared personal and economic prosperity. AFRICA MUST WAKE UP!

 

BENEFITS OF WORKING INCLUSIVE POLITICAL AND ECONOMIC INSTITUTIONS.

  1. Makes dictatorship and oppression less possible, because the rule of law is upheld, independence of the judiciary and power belongs to the people.
  2. Inclusive institutions alleviates poverty, gives room for more productivity, because it creates avenue for creativity, innovation and entrepreneurship, which threaten the monopoly syndrome.
  3. Gives room for more unity and patriotism, as people know their lives are valued and well treated with respect.

 

Lastly a major reason why most extractive institutions hardly turn to be inclusive is simply due to the fear of CREATIVE DESTRUCTION.

Please join me next week as we explore further to make our economies better.  CHEERS!

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CRO – Project Change Initiative A 21st Century Leadership, Organizational and Economic Development Strategist For comments, please visit Obele Jesuite on facebook, on twitter, gospel_obele@yahoo.com. For email: or contact 08130070991.

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