The government of Botswana plans to address “leakages” in the tourism sector to make it a key economic growth area as the mining sector declines. Vice President Ndaba Gaolathe, who also serves as minister of finance emphasised during the Tourism Pitso held in Francistown last week the need to reduce leakages to deepen citizen empowerment, strengthen collaboration, and build inclusive growth.
While previously government has thrown around the term ‘leakages’ in the tourism sector, which has seen millions of Pula meant for the economy not reaching Gaborone, indications are that the current government is determined to address it.
Ndaba was blunt in his address that to deepen citizen empowerment and participation in the economy, strengthen collaboration, and build inclusive growth at all levels, “we must reduce leakages in this sector, we must regain value within our economy and we must ensure competitiveness in our sector to place Botswana among the leading sustainable destinations in the world.”
He further impressed that Botswana has the endowment of natural resources to ensure that this happens, ‘and we must, this we must ensure that it does happen. Thus, tourism must be a sustainable driver of our wealth and welfare creating opportunities for our people.
This posturing, was a clear indication that government, at the treasury level has taken a bold step towards addressing the issue of leakages.
As if to gauge the sector’s mood reaction to his remarks – Ndaba did not leave the hall after the opening remarks, but sat through and listened a panel discussion on ‘Pugging the Leaks: Retaining Tourism value in Botswana’s economy.’
The panelists of the discussion, facilitated by Bank of Botswana governor, Lesego Moseki included Chief Executive Officer of Chobe Holdings Limited John Gibson, Acting Commissioner of BURS Philiso Valashia, Dr Onkokame Mothibi from the University of Botswana and Dr Kebadile from BIDPA.
While, this was one of the most debated discussions at the Pitso, it was clear that what appeared to be a push back from some sections of the industry – was lack of clarity on the definition of ‘leakages.’
The debate involved defining leakages, with a BIDPA study and BURS data suggesting potential tax evasion and revenue loss within the industry.
To buttress this, the BURS highlighted that while the tourism industry contributes between 4 and 5 % to the country’s GDP, it only contributes on 1 % in taxes. This anomaly, according to Valisha is indicative of some tax evasions which then constitute leakages.
The discussion, and engagement demonstrated the need to clearly define and identify leakages and work towards plugging them.
Gibson highlighted that the industry is willing to assist government in plugging leaks where they are clearly identified. He further clarified that Chobe Holdings Limited is listed in local bourse, head quartered in Maun – paid all its taxes in Botswana.
Meanwhile when presenting on key policing challenges, implementation gaps and recommendations for reform, Hospital and Tourism Association of Botswana (HATAB) Chief Executive Officer Lilly Rakolong call for further engagement on the issue of leakages in the sector.
