By Oscar Habeenzu | for Moakanyi Magazine
According to FAO, the world has 1.468 billion head of cattle, and Botswana has 2.5 million of that herd, and it is estimated to account for less than 2% of Botswana’s GDP.
On the other hand, Botswana is a cattle country dating back to pre-colonialism, and its post-independence has not disturbed its model of communal cattle ranching that is has commercialized over the decades to ensure sustainable development. In 2015, the Botswana Institute for Development Policy Analysis conducted a research to investigate Botswana’s beef export competitiveness using indices of Revealed Comparative Advantage (RCA) and data for the period 1961-2011.
Results indicated that Botswana has been the most competitive SADC beef exporter, and that it has compared well with the leading world beef exporters, however, the country has recorded declining competitiveness since the mid-1970s. It is argued that, state trading export operations and non-reciprocal trade preferences with the EU have enhanced competitiveness through facilitating export market access. However, the single channel exportation arrangement, through a loss-making state trader, is a potential threat to beef export competitiveness.
Further, recurrent outbreaks of cattle diseases and drought, and the rise in domestic demand for beef (coupled with stagnant domestic supply) have adversely impacted beef export competitiveness. In June 2019, “Botswana has launched a process involving privatization of its loss-making beef exporting firm Botswana Meat Commission (BMC). This follows a report by auditing firm, KPMG Botswana which recommended that BMC should be privatized as a way of liberalising Botswana beef export market”, reported The Southern Times. The privatization of the BMC creates an open field for more entrants into the export market, as cattle herders will have options; that being a major growth factor to the communal and small-scale farmer who own 80% of the export beef sent to the commission. The Weekend Post, reported that the “BMC has been protected from export competition, with several privately owned and local council abattoirs, as well as a large number of local butcheries that undertake slaughter having been restricted to supply only the domestic market.”
The beef industry in Botswana plays an important role as a source of foreign exchange, rural livelihoods and employment, and there is potential for exports, as Botswana, despite the losses being made by the sole exporter – BMC, the country is a regional leader. Beef accounts for 65% of Botswana’s Agricultural exports, which were valued at US$118 million in 2017 and 43% was going to the United Kingdom and 42% was going to Norway, and the remaining 15% to the rest of the world.
Zimbabwe, though having a 5 million national herd, and a former regional beef export leader in the 1990s, in 2017 they only exported US$44,000, going to France and Austria. Following closely, in 2017, neighbouring Namibia exported US$111 million worth of beef with the United Kingdom consuming 51% of the supplies. In the same year, South Africa, though having a herd of 14 million, exported beef worth US$77.5 million, with a bulk of that going to 56% of that going to the Middle East markets (United Arab Emirates, Jordan, and Kuwait), and Eswatini (11%).
Economics of African Beef
In the article Elizabeth Bonsall, a consultant with agri food supply chain consultancy Promar International, wrote: “Traditionally, Africa accounts for just 5% of the world’s beef, sheep, chicken, pork and goat meat production – equivalent to some 14-million tons. The largest producer in Africa is, by some margin, South Africa at 20% of the total, followed by Egypt at around 10%.” Internationally, noted Bonsall, Africa has a fairly low level of domestic meat production, so exports are minimal at around 125 000 tons a year. “In contrast, the growth of Africa’s meat imports has been significant – increasing by some 300% over the last 10 years, rising to around 1,8-million tons.” On a global scale, the Food and Agriculture Organisation of the United Nations conducted a study three years ago entitled ‘World Livestock 2011’, in which it projected that, by 2050, meat consumption would increase by some 73% and dairy consumption by 58%.
Study on Beef Industry
The Botswana Meat Commission says that “The Botswana cattle industry uses free range and natural farming methods, which ensure full – flavoured, lean beef of highest quality. Botswana ‘s land and its sub- tropical and semi-arid climate is ideally suited for cattle farming. The country boasts of between 2.5 to 2.8 million head of cattle.” In a bid to develop the industry, in 2015 the Local Enterprise Authority identified the Botswana Meat Commission (BMC) by-products as one area that needed exploration to identify potential business opportunities from which SMMEs can benefit. This was at the backdrop that the beef industry is the largest contributor to the GDP within the Agriculture sector, and also as does LEA’s mandate requires the organization to identify business opportunities for uptake by SMMEs. The intended purpose of this study was to explore further business opportunities from the by-products which SMMEs can invest in. The uptake of business opportunities identified from this study would then assist Local Enterprise Authority (LEA) to promote use of local raw materials in the manufacturing sector.
Beefy Success Stories
The Local Enterprise Authority has many success stories of SMMEs in agriculture, and the Jago Beef Holdings is one they highlighted in May 2019. They reported that “the Jago Beef Abattoir and Jago Griller Master is owned by Mrs. Omosa Gaompone and offers Butchery & Abattoir services. The business registered with LEA in 2017 and has received a number of interventions that include Market Gap Analysis, Customer care coaching, Records Keeping, on-site coaching, monitoring and Occupational Health & Safety training. In preparation to attend trade fairs like Global Expo, LEA provided training on Trade show Readiness and Participation. Mr. Phampa Badiredi, the Jago Beef director, took the stakeholders including the LEA CEO, Dr. Racious Moatshe on a tour of the facilities and highlighted that they take pride on the quality and wholesome meat they supply to the Central & North East District.” The Jago Beef Abattoir is a business that shall definitely benefit from the liberalization of the beef exports policies being implemented by the government.
Exploring the New Dispensation
There is scope in the beef and meat by products industry in Botswana for exports, and the current opening up of the markets locally will help develop the international exports agenda. The issue at hand will be the post-liberalisation of the beef industry, as that will bring new players to compete with the Commission, not only in the local space, but for exports as well.
Sources: LEA, BIDPA, FAO
