The International Monetary Fund (IMF) has pegged a number of new entrants into Botswana’s labour market at 35 000. The IMF team now says the Botswana government will have to accelerate the implementation of its ambitious ‘RESET AGENDA’ in order to create jobs for the 35 000.
“Accelerated implementation of the “Reset Agenda” is required to diversify the economy towards financial services (facilitated by fintech), manufacturing, and tourism. Reforms should include deeper trade integration, implementation of planned visa and work permit reforms and faster investment in renewable energy. This will also help create the jobs needed to reduce unemployment and absorb the 35,000 annual labor market entrants”, reads part of a statement released by the IMF team that recently visited Botswana.
Botswana’s latest labour sector figures shows that there has been an increase in the number of people eligible to work, but the economy is adding jobs at a slower pace.
According to the latest Statistics Botswana’s Multi-Topic Survey Quarter 4, 2021 labour force module report uunemployment rate in Botswana went up by 1.5 percentage points, from 24.5 percent in fourth of 2020, to 26.0 percent in fourth quarter of 2021.
At the same time, report shows that the employed population recorded a decline of 2.2 percent between quarters four (4) 2020 and four (4) of 2021, from 733,875 to 717,418 persons. This was accompanied by an increase of 5.7 percent of unemployed persons, from 238,731 to 252,316 persons over the period.
The lack of jobs in Botswana has become a major issue in Botswana, and without clear data, there is growing concern that the number of unemployed people might be understated.
The country’s economic growth dropped considerably from an average of 7.1 percent during 2005 – 2007 to an average of 6.4 percent during 2010 – 2012. This was followed by an average of 4.6 percent, and 3.9 percent during 2013 – 2015 and 2016 – 2018, respectively.
Annual GDP growth dropped further to 3 percent in 2019 and contracted by 7.9 percent in 2020. During the first year of Covid 19 the local economy contracted by 8.5 percent, the deepest contraction in more than two decades, as the diamond industry floundered amid the outbreak of the global pandemic.
Economic experts have advised that Botswana’s economy needs to grow at an average of at least 6 percent to be able to generate economic activities that will create jobs. At the same time, towards the end of 2021, the country’s central bankers cautioned that the local economy will will operate below full capacity in the short to medium term.
At its last meeting of the Monetary Policy Committee (MPC) of the central Bank stuck to its policy despite the rise in consumer prices. The central bank executives reasoned at the time that economic recovery is still low and the spikes in prices have been due to government actions. The MPC then decided to maintain the Bank Rate at 3.75 percent, which has prevailed since the last cut in October 2020. In the second quarter of 2021 Botswana’s inflation rate hit the highest level in more than a decade as consumer prices continued to soar, mostly driven by government actions as it fights back against the repercussions of the COVID-19 pandemic.
The inflation rate soared to 8.9 percent in July 2021, reaching its highest level since 2009. The Consumer prices have however been on the rise since June 2020 and breached the central bank’s medium objective range of 3 – 6 percent in May 2021, as the inflation rate ticked to 6.2 percent. In the first six months of 2021, prices rose the most for the transport sector by 13.9 percent, followed by the alcoholic beverages and tobacco segment, which has been facing numerous challenges such as ban on sales and change in legislation , but still managed to see prices jumping by 7.2 percent.
