Crony Capitalism Is Impeding The Growth Of Botswana's Entrepreneurship Environment

In Botswana, becoming a successful "self-made" entrepreneur is not an easy feat to manage. Put aside the socio-economic hindrances like a small population, an extremely undiversified economy, and government bureaucratic red tape and you still have another big obstacle that makes entrepreneurship an extremely complex ship to sail, the proliferation, and normalization of crony capitalism in the country's entrepreneurship environment.

So normalized is crony capitalism in this country that there is even a colloquial term for it, "connections". While in other business environments aspiring entrepreneurs seek out and build networks of individuals and/or businesses who might legitimately assist in the said entrepreneurs eventually becoming a success story, here, the popular route is to seek out and build relationships with high ranking and influential public office or political officials to get into business with.

Now, of course, these said public and political figures are not sought out for their brilliance and expertise in entrepreneurship matters but rather for their ability to "make things happen". In a country where everything is marred in bureaucracy,in order to make your way past all that bureaucratic red tape, you need on your side the very same people who are responsible for all that red tape so that they can lift it up for you and give you some sort of comparative advantage on your peers.

In this country, it has become somewhat of a custom for a new story to pop up every week about a high ranking public service or political figure being entangled in some business dealings which present a conflict of interest. If it is not the figures themselves, it is often their spouses or close family members acting as some sort of front for the "big guns" themselves.

Crony capitalism has become so threaded into the moral fabric of Botswana's society that even the idea of becoming a successful "self-made" entrepreneur is considered very far fetched, a unicorn. Instead of young aspiring entrepreneurs being urged on to come up with life-changing and innovative solutions to the nation's challenges, they are most of the time encouraged to focus most of their energies on meeting and forming relations with "the right people" aka the cronies.

The problems that crony capitalism presents for the country's entrepreneurship environment are quite obvious. First and foremost is the clear conflict of interest which subsequently leads to cases of corruption. When a crony decides to use their position in either government or political party to "make things easy" for their partner, that is a corrupt activity. Corruption does not just entail looting and misuse of public funds but also encompasses the use of influence and position to favor those close to the said official.

Another problem crony capitalism presents for the country's entrepreneurship environment is that it impedes innovation by entrepreneurs and this can happen in one or both of two ways. Firstly, it changes the goal of entrepreneurship in that instead of it being used to address issues and challenges facing the country, it is instead used as a get rich quick scheme. Entrepreneurs set out not to be innovative but make "connections" which, coupled with the ideas they have, will make them riches very quick. Secondly, it discourages those legitimate entrepreneurs who have life-changing ideas but no "connections" with the cronies because they will not have that privilege of having the bureaucratic red tape lifted for them. This leads to the country having increasing cases of brain drain whereby those entrepreneurs take their wonderful ideas out of the country where they will be more appreciated as evidenced by a case of a local entrepreneur a few weeks ago.

Last but definitely not least, crony capitalism creates lethargy in the development of the country's policies. The logic is not too hard to follow. If legislators benefit from the current status quo, what incentive do they have for changing it despite it hurting the socio-economic standing of the country? The answer is none. Like the old saying goes, never bite the hand that feeds you, so if legislators are being fed by rules and laws which exacerbate corruption, why would they be willing to change them?

The fact that the very legislators who stand to benefit from acts of crony capitalism are the same ones who are tasked with coming up with ways to stop the same scourge makes it the more difficult to successfully resolve. The only way to tackle the problem is only when the people decide to say enough is enough and put the necessary pressure on legislators, by way of being vocal and critical about laws which get passed, to do right by them because if they just leave it to the legislators to identify the problem and remedy it because "it is their job", they are just going to make sure that whatever "solution" they manage to piece together will still serve first and foremost their own interests.

Now more than ever, with the COVID-19 crisis having rummaged through whatever was left of Botswana's economy, the country needs a vibrant entrepreneurship environment which will contribute towards lifting the country from the ashes like the proverbial phoenix. However, as long as the success of the country's entrepreneurs is determined by not how well they can address the country's challenges but rather by who they know in the country's top offices in government and politics, the country's journey to an economic recovery post-COVID-19 will be a difficult one, if not downright impossible.