The International Monetary Fund, IMF, on Tuesday said Botswana witnessed a faster economic growth in 2013 due to improved mining sector performance.
The IMF team which visited Gaborone in late April said our economy grew faster than they expected in 2013.
The ‘growth’ which is reported to be about six percent has been attributed to the improved performance of the mining sector.
The non-mineral sector however is reported to have slowed down from about six percent the previous year to about five per cent in 2013, due to recurring power supply disruptions and drought.
The question that came to my head as I read through the statement was what that means to low income earners.
What does this growth mean to a Motswana who stays in Tsau and Karakubis villages? Does it have any direct positive impact to a shop assistant who earns roughly below P1500?
The question is: does the general growth of the economy always have an immediate direct impact on up-liftment of lives of the citizenry?
The idea behind this commentary is to question and discuss the nature of this reported 2013 economic growth and that of subsequent years. We need to scrutinize whether this repeated statistical publications about the high performance of the domestic economy has a positive impact on the lives of our people.
We all know that our country, which has long been held up by western donors as a leader in governance in the African continent, nevertheless has had structural unemployment of close to 20 percent despite decades of strong ‘growth’.
The sad reality is that of late there is a new economic disease, labour mismatch, which has reached our shore and seems to have no cure, atleast for now. With concerns being expressed by industry about quality of Botswana trained recruits there is an urgent need to ensure a strong and stable human resource base.
Our country has relied on imported skills from Zimbabwe and South Africa. It is obvious that once the political and economic status of the former is resolved and with the latter experiencing its own skills shortages this is not sustainable in the medium to long term.
With this in mind, one is forced to conclude that maybe this GDP growth reported by the IMF and the government will always mean nothing to the number of citizens.
These are the same citizens who are economically disempowered and as such have increased their dependence on government assistance programmes such as Tirelo Sechaba and Ipelegeng. They cannot ‘eat’ GDP growth. They have business aspirations. They do want to own not just land but the one that is located in prime areas. And they do want to control all the industries including the poultry one. They do want to own franchise of leading international brands and they do not want to contribute to the ‘growth’ only as Small Medium Entrepreneurs’ but rather as ‘big guns’.
It is indeed true that economic growth is the most powerful instrument for reducing poverty and improving the quality of life in developing countries. Both cross-country research and country case studies provide overwhelming evidence that rapid and sustained growth is critical to making faster progress towards the Millennium Development Goals.
In the meantime though, one can safely say this Gross Domestic Product (GDP) concept, heavily loaded with ideology, does not reflect the realities on the ground, more especially for our rural folks, atleast in the short to medium term. The GDP growth does not any how a big issue to 20 percent of the population of this country which is unemployed.
To some of us who have short knowledge of how this GDP concept operate, we find it very misleading as it does not only reflect the realities on the ground and systematically neglects other economic activities that take place outside the formal sector. GDP considers only market transactions and no other aspects of human activities performed by our people.
If one takes a look at straightforward increases in national pie, you have economic growth without development. The basic numbers on wage and productivity growth in Botswana’s business cycle also tell a striking story.
As such figures do tell that poverty and inequality remain high, and the shortcomings of labour market policies are evident with an unemployment rate of about 20 percent. Botswana’s income inequality, with a Gini Index in excess of 0.5, is one of the highest in the world especially when compared with other high middle-income countries.
What we need to be looking into is productive investments in key economic sectors. This is so because not all of our policies have promoted inclusive growth and human development in a broad-based manner. At the same time, apart from stagnant growth in employment, there has been a slow growth in real wages in the labour market in Botswana.
The Bottom-line though is that shared development ÔÇô pulling people out of poverty ÔÇô boosts economic growth, as progressive countries such as Brazil and China have spectacularly demonstrated.
Our policy makers should bear in mind that though Batswana cannot ‘eat’ GDP growth, the very same growth that can generate virtuous circles of prosperity and opportunity.
Basic economics dictate that strong growth and employment opportunities improve incentives for parents to invest in their children’s education by sending them to school.
This may lead to the emergence of a strong and growing group of entrepreneurs. Strong economic growth therefore advances human development, which, in turn, promotes economic growth. Am I wrong?
