Asset Consulting Botswana (Pty) Ltd

18/02/2026

Basics of Diversifying the Botswana Econmy.

There is a fallacy that is currently doing the rounds in the midst of a failed diversification of our economy by the previous government of the BDP among policy makers, specifically regarding the the need to diversify the economy away from the diamond industry.

It should be understood that, in simple terms, any diversification effort should seek to mitigate the impact arising from the economy being over dependent on a single dominant sector. In effect, by diversification we are referring to the need to grow a balanced economy across the risk profiles of all the various sectors of the economy with the view to hedge the risk of one sector dictating the performance of the whole economy. It is not only silly but also misleading to give the impression that diversifying within a sector such as mining, say between diamonds and copper, necessarily and sufficiently hedges against the vicissitudes of the commodities market.

In portfolio theory, which is where the concept of diversification is best articulated, any meaningful diversification ought to be across unrelated sectors of the economy in terms of their idiosyncratic or specific risk profiles. Diversifying within an economic sector or asset class can only yield partial results, at best, and therefore is bound to fail to achieve the intended objectives of shielding the economy against the demise of depending on a single sector or asset class.

That is no to say diversifying within a sector should be discarded outright, no! The point is that such a strategy is only bound to yield inferior outcomes. And it should also be pointed out that in fact there has been some diversification of the economy, albeit of limited impact on the economy; the diversification into the service sector is most notable in this respect, particularly the banking, asset management and tourism sub sectors of the economy.

Where the economy has failed dismally has been to diversify into the manufacturing sector. Having said that, there is ought to be economic linkages between the primary sectors and the secondary sectors for the manufacturing sector to flourish. This brings us to the fallacy of the now self-corrected “very bad economics” that ushered in the UDC government - a total failure to grasp the importance of the primary sectors as the basis of growing the manufacturing sector.

Yes thinking is hard but as a leader you ought to also accommodate the thoughts of other people, including those coming from your perceived nemeses. Thanks God, the UDC government seems to have reversed their misplaced “very bad economics” madness which initially led to the lifting of the ban on the importation of certain vegetables from South Africa.

And for those who are in the habit of saying emphasis should be put on exporting rather import substitution, as if the two cannot coexist, should stop misleading Batswana. Exporting what, when there is nothing to export but the failed diamonds.

Batswana should seriously guard against allowing their economy to be guided by the whims of the neo-liberal fundamentalists who can at best regurgitate failed policies from some faraway places.

Good reading!!

17/01/2026

In Diffense of Statistics.

In the past, president Boko, in one of his social media pronouncements hinted that he did not trust statistics; well in fact what he said demonstrated his deep desdain, or should I say his distrust, for statistics. In my view his utterances were the worst form of lack of understanding, not unlike Margaret Thatcher’s infamous assertion that where there are two economics, you get four different opinions. Like Mrs That president Boko, was, to put it mildly, reticent with details. For instance, what qualities of economists did Margret stumble over or for president Boko, which branch of statistics did he find so abhorent..

Well Margret is no longer with us but her legacy is deeply embedded in our minds. To our president, I would say they is a difference between a “statistic” and “Statistics”. Even the information extracted from your bank account would for a useful static, like, for instance, your bank balance and how many debit and credit entries went thru it during 2025. So Statustics is very important, after all, and that is why it is taught at almost all universities. And for those who are “educated” in it and do not intend to mislead, it can prove to be a Rey potent tool, indeed.

And, for what it is worth, it is never too late to enroll, I have no doubt UB would be most delighted to admit the president for a diploma course in introduction to statistics; gatwe ga e golelwe.

Granted, Statustics, in the wrong hands or otherwise, as can be the case with other professions, can be manip**ated in order to drive an agenda or to perpetuate an outright lie. Otherwise, statics just like accounting and economics are some of the fundamental bodies of knowledge that one can, and perhaps should familiarize with for him to make convincing statements about literally anything. This also applies to politicians and gladiators.

On a related note, sometimes earlier this week, the minister of home affairs reported in parliament that 40% of private companies in the country had adopted the P4 000 p.m. living wage. Like most people, I was astonished, to say the least, why opposition MPs appeared not interested to question this statistic, for their own sake as well as for the sake of other external stakeholders like myself.

Now let me ask minister of home affairs for myself and for others as well in the Statustics/economics profession.
1. What was the source of that statistic, I.e who actually compiled the statiiistic? If it was Statitics Botswana, what is the title of the report so that one may check it up on their website?
2. Does the 40% statistic apply to all categories of private companies in the country, I.e. small, micro and medium enterprises as well large private companies? This is where I find the Ministers assertion utterly vexing. Not all private companies, especially SMMEs in the hinterland can afford this pay - needless to say, this is my personal opinion; albeit informed by my experience about this sector of the economy.
3. To the extent that the P4 000 is not a minimum wage and therefore its adoption is voluntary, one might want to know if those private companies that have chosen to adopt it can sustain it, especially under the current state of the economy?
4. Another, albeit not so trivial information, is how the 40% was derived? Was it thru a sample survey or a pop**ation survey? In both methodologies, a student of statistics might want to know what the sample size was, I.e. in the case of a sample survey; the same information would be useful in the case of a pop**ation survey.

Come to think of it, bearing in mind how costly a pop**ation survey can be, the methodology employed, if at all, was probably a sample survey. However, this till begs the question, what type of sample survey.

These, in my view, are the questions our opposition MPs ought to have, or should, ask the minister. Then perhaps the most maligned professions, regrettably by the novices, of economics and statistics may be respected as they should.

As for the opposition MPs, Batswana see you as their eyes, ears and mouths in parliament; when you ask questions, you are not doing that only for your sake but also for that of your constituents. When a whole minister of finance dismisses an economic policy as “very bad economics”, only to reinstate it almost a year later, you should ask him to explain himself, particularly if he is not an economics.

Reckless decisions like unbanning the importation of some vegetables and later reversing that decision has cost implications for the poor farmers who are struggling with quality and price decisions of their produce as well as with the reluctance of the predominantly SA chain stores who are reluctant to source locally at fair prices.

Good reading!

02/01/2026

You do not need to be an engineer to appreciate what this video clip seeks to demonstrate, I.e. a bad loser often ends up being a real loser.

Enjoy it.

Explore the high-stakes saga behind Thailand's advanced submarine deal with China and the global ripple effects it caused. Delve into why the sought-after Ge...

13/12/2025

So we think we are smart to be utterly dependent on SA, our proxy and virtual colonial master until 1976, I.e before the p**a was introduced. Others would argue that we are still so dependent on SA we might as well see ourselves as their colony, the same as Lesotho, Namibia and Swaziland.

In 1987, our trade deficit with SA was about P15,0 billion p.a, now I estimate it at more than P35,0 billion. At the same time we are so obsessed about the so-called SACU customs revenues, as if we cannot collect the same if we pulled out from SACUA and imposed our own tariffs on imports from non CFTA members including those that camouflage as genuine SA, thereby flouting the rules of origin principle.

Now that “the very bad economics” madness is gone with the wind and the restrictions on some imported vegetables seem to be back, SA is threatening to punish Botswana not because they are in right but because they have reckoned that we are virtually at their mercy. That type of arrogance was aptly displayed by the so-called West against Russia in 2022 at the inception of what Russia calls the SMO. And guess what, in less than four years Russia has been transformed from a wheat deficit country to a wheat surplus country exporting some of their wheat to even the very West that sought to cripple the Russian economy with extensisive sanctions.

Are we really at the messy of Mtsantsi? Tragedy is that we do not know and our governement would probably give the same answer. For instance, if we pulled out of SACUA and introduced our own tariff regime set at about 10%, I believe the current average tariff for SACUA is in the region of 8%, how much revenue would be able to raise on imports in the form of customs and exercise duties? By how much does the SA exports to the rest of African countries depend on our transport network, virtually for free? Well you would have thought that the previous governement and the current one would have found it necessary to investigate these issues. Alas! Do not be too hopeful, somehow governements are always reactive.

Granted, currently, our economy is on shaky ground so much so that tempering with the status quo could complicate matters. However, going forward, certainly by 2030, that is if I were “my boy”, powerful as he is, I would pull Botswana out of SACUA, introduce an independent tariff regime with customs and exercise duties set at levels that would allow us to derive more or less the same SACUA receipts that we currently receive, improve our transport network and charge tolls on it, gradually ban all imported vegetables, ensure that all imported goods are subject to a rules of origin requirement with a cut off point of 65% and finally train our people and develop appropriate systems that would track all imported goods into the country and ensure that every one observes the rules, otherwise punitive charges would apply. That is the only way we can industrialize and lessen our dependence on the likes of SA which is not only unsustainable but arguably suicidal too.

Failing which, even the BNETP intended projects may also fail the same way that many other projects in the past failed because of pressure from SA interest groups such as the SA Motor Vehicle Association which made sure that the Hyundai project failed and was ultimately taken over by SA. Of course, other structural reform policies, infrastructure develeopment and other support policies would need to be introduced in order to encourage more industrial development.

Good Reading!!

13/12/2025

So we think we are smart to be utterly dependent on SA, our proxy and virtual colonial master until 1976, I.e before the p**a was introduced. Others would argue that we are still so dependent on SA we might as well see ourselves as their colony, the same as Lesotho, Namibia and Swaziland.

In 1987, our trade deficit with SA was about P15,0 billion p.a, now I estimate it at more than P35,0 billion. At the same time we are so obsessed about the so-called SACU customs revenues, as if we cannot collect the same if we pulled out from SACUA and imposed our own tariffs on imports from non CFTA members including those that camouflage as genuine SA, thereby flouting the rules of origin principle.

Now that “the very bad economics” madness as gone with the wind and the restrictions on imported vegetables seems to be back, SA is threatening to punish Botswana not because they are in right but because they have reckoned that we are virtually at their mercy. That type of arrogance was aptly displayed by the so-called West against Russia in 2022 at the inception of what Russia calls the SMO. And guess what, in less than four years Russia has been transformed from a wheat deficit country to a wheat surplus country exporting some of their wheat to even the very West that sought to cripple the Russian economy with extensisive sanctions.

Are we really at the messy of Mtsantsi? Tragedy is that we do not know, including our own governement. For instance, if we pulled out of SACUA and introduced our own tariff regime set at about 10%, I believe the current average tariff for SACUA is in the region of 8%, how much revenue would be be able to raise on imports in the form of customs and exercise duties? By how much does the SA exports into the rest of African depend on our transport network, virtually for free? Well you would have thought that the previous governement and the current one would have found it necessary to investigate these issues. Alas! Do not be too hopeful, somehow governements are always reactive.

Granted, currently, our economy is on shaky ground so much so that tempering with the status quo would complicate matters. However, going forward, certainly by 2030, that is if I were “my boy”, powerful as he is, I would pull Botswana out of SACUA, introduce an independent tariff regime with customs and exercise duties set at levels that would allow us to derive more or less the same SACUA receipts that we currently receive, improve our transport network and charge tolls on it, gradually ban all imported vegetables, ensure that all imported goods are subject to a rules of origin requirement with a cut off point of 65% and finally train and develop systems that would track all imported goods into the country and ensure that every one observes the rules otherwise punitive charges would apply. That is the only way we can industrialize and lessen our dependence on the likes of SA which is not only unsustainable but also suicidal.

Failing which, even the BNETP intended projects are going to fail the same way that many other projects in the past failed because of pressure from SA interest groups such as the SA Motor Vehicle Association which made sure that the Hyundai project failed and was ultimately taken over by SA.

Good Reading!!

23/11/2025

If what the global financial makers experienced last week is going to continue into December, then this year’s Christmas is going to be a total disaster. First, we saw spectacular collapses investors as well as investors in the private credit market, then Bitcoin lost about one third of its market value from its peak followed by the much talked about Yen forex carry trade collapse as Japanese yields skyrocketed leading to a stronger Yen and a pandemonium among Japanese investors clamoring to repatriate their dollar investments in order to preempt further losses occasioned by a stronger Yen and compounded by the need to preempt devastating margin calls.

Without a doubt, last week was a blood bath for the global financial markets. For institutional investors such as pension funds and insurance companies, both local and foreign, we say “caveat emptor”. Do not be carried away by what appears to be attractive returns and stake your underlying beneficiaries’ assets into opaque investments such as private credits.

Be warned!!!

12/11/2025

Most economists are aware of the state of the ongoing credit crunch in the banking sector. However, I bet most of us are not aware of the underlying causes of this liquidity crunch. What most of us seem to overlook is the self perpetuating nature of a severe credit crunch. Ordinarily, as banks tighten up their lending policies on account of the uncertainty surrounding the state and prospects of the economy thereby leading to a shrinking of their lending books, enterprises that would otherwise qualify for bank lending are squeezed of credit thereby leading to further squeeze on liquidity in the overall economy and further dampening of economic activity.

I saw in today’s Botswana Gazette that banks’ prime lending rates have continued to rise in recent times with one of them reporting its current prime lending rate at 7,76%. Signs are every where and they indicate that the liquidity crunch continues to deteriorate and it will be a while before we see it meaningfully bottoming. Note that unit trusts are just as well contending with the same liquidity crunch to the ent that in one particular case, one of the unit trust providers is offering an effective annual money market return of more than 14%. In recent times, certainly before the 2024 general elections, you would be hard pressed to make any return above 6% p.a.

So, my view is that the decision by BoB to instruct banks not to adjust their prime lending rates upward following its MPC decision to raise the MoPR from 1,9% to 3,5% is as futile as the core of the current state of its monetary policy. Even at 3,5% p.a. the MoPR, in my view, is still sterile and as long as the current liquidity crunch persists or even worsens, the pressure to raise lending rates by commercial banks will mount.

The tragedy for BoB is that it finds itself between the devil and the deep blue sea in terms of its current monetary policy stance. The economy is experienced a deep recession in during 2024 and is expected to continue to contract during 025, albeit at a slower pace. Under these circumstances, the logical thing to expect BoB to do would be adopt a more dovish monetary policy stance. Regrettably, given the state of the liquidity crunch in the banking system and BoB’s failure to proactively and, I dare say, intelligently manage its monetary policy, the credit crunch continues to worsen putting pressure on banks to raise their prime lending rates thereby going against BoB’s directive. The reason why BoB, likewise, has had to raise its MoPR rather aggressively by 160 bps to 3,5% is because at 1,9%, this policy rate was rendered sterile and hence irrelevant to the realities in the banking system. To raise the MoPR by 160 bps actually contradicts the general expectation that given the terrible state of the economy, BoB should be striving to inject more liquidity into the economy rather than appear to be worsening it, knowingly or otherwise.

Lastly, while we are constrained by the lack of information and therefore most of what one can say at this stage can at best be regarded as speculation, I am inclined to suspect that
Earring to the 2024 general elections and thereafter, this economy might have suffered massive scourge of capital flight. That suspected hot money, I would argue, probably explains the bulk of the state of the current debilitating liquidity crunch in the banking system.

You would expect BoB to share more information on the flows of capital in and out of the banking system during the months leading to the 2024 general elections and beyond. I am not very hopeful about this and my suspicion is that any information on this subject may only be revealed, if at all, a lot later in the history books; God knows when. In the meantime, the situation is most likely to deteriorate further causing even more problems for the economy.

Good reading.

04/10/2025

Now that Bristo is out, hoepefully Barrik Gold will stop plundering Africa’s gold mining resources. Their track record in Tanzania and In the Sahel is a sorry one.

29/09/2025

Batswana may choose to delay swallowing the bitter pill by excessively relying on borrowed funds and the Arab generosity in order to prop up what I consider to be an unsustainable level of absorption. However, we cannot endlessly avoid the austerity route in addressing the economic challenges facing our country, Botswana. In my view, the economic challenges ahead are just too daunting to fathom.

For those who think we can postpone making difficult decisions, perhaps should be reminded of the experiences of the European countries following the advent of the Great Financial Crisis of 2008. The origin of the crisis that befell the likes of Greece, Ireland and Span and that bedeviling our economy may be different, however, the solutions are the same - curtail absorption to a more sustainable level by swallowing the bitter pill, whole and revisit the external value of the p**a with the view to devalue it further.

You see, even though the EU experiences following the advent of the Great Financial Crisis of 2008 are different from our own experience of over dependence on a single and depletable resource - diamonds, the prognoses and hence the solutions are very similar. Unlike the likes of Greece who had no currency to devalue becuae they were part of the Euro Zone, at least, we do have the p**a to devalue, albeit, my view has always been that we might have seriously underestimated the extent to which it was over valued. And, strangely, we chose to adopt uncoordinated intervention policies with the hope that the problem would be short lived. What if it is not? The downturn in the diamond industry has been with us for more than two years and, regrettably, there does not appear to be any silver lining in the horizon.

Despite the differences between the experinces of the likes of Greece and our own experience, my view is that there is a lot to learn from the former’s experience. We just have to bite the bullet and introduce a more coordinated and stringent austerity programme that should hopefully buy us more time while realizing that our current level of absorption is utterly unsustainable and hence serious thought should be brought to bear and curtail it to a level that is more realistic.

As for efforts to diversify the economy, let us not foll ourselves, the outcomes of most of the intervention strategies coming out of the BETP are more likely to emerge in the long term than anytime during this parliament.

The commemoration of our 59 years since independence should hopefully help cajole us to introspect and hopefully come to our senses. The recent devaluation of the p**a was not enough; the fiscal manip**ations that we saw at the presentation of the 2025/26 budget speech in February were a joke and we have no choice but to introduce a more stringent austerity programme that should, inter a lia, significantly reduce the civil service wage bill coupled with a more realistic devaluation of the p**a.

May tomorrow be a happy independence anniversary for us all.

Good reading.

26/09/2025

It is conceivable that if Angola could show so much enthusiasm to buy a strategic stake in De Beers, other diamond producing countries in SADC such as Namibia would also be interested to own a stake in the company. Botswana is on record for saying that she wants to own a controlling stake in De Beers; any stake not taken by these three countries should be offered to their pension funds and sovereign wealth funds. Then it would not be so difficult for Botswana to raise the requisite funding in order to realise its dream for a controlling stake, after all.

22/09/2025

Batswana deserve to be informed more than just the establishment of the country’s sovereign wealth fund; we aLso need to know how the fund will be funded as well as the fund’s investment objectives and guidelines. Could the sovereign wealth fund be the same as the so-called P**a Fund which also see,s to go by the same name. Otherwise, on the face of it, we seem to have established a savings account akin to the, I suppose now defunct, Public Debt Service Fund.

13/09/2025

Judging by what BoB refers to as the liquidity crunch induced misalignment between short term interest rates and its benchmark policy rate, it might be worth its while to recalibrate the latter. Otherwise, this misalignment is very likely to get worse over time as inflationary pressures gain momentum and hence upped its already shaky monetary policy framework.