Tuesday, December 1, 2020

Batswana continue to live on the borderline of destitution

There is a serious disconnect between perception and reality in so far as the outside world perceives the economic status of Botswana as a country and Batswana as a people.

In the minds of many outsiders, Botswana is this wealthy country that has long been declared upper middle income by the United Nations.

With that in mind, Batswana are themselves exceedingly wealthy owing to the welfare state financed by proceeds from the diamonds wealth.

This is false. And Batswana are guilty of perpetuating this myth.

Excessive consumerism has become an addiction for Batswana.

Statistics from Bank of Botswana has over the last few years showed household credit growing at a pace that was neither healthy nor sustainable.

In direct contrast, there was very little growth in the area of investment.

That is not the only myth that we have helped to grow over the years.

Another myth that has been nurtured and allowed to blossom is that which depicts Botswana’s economy as dynamic.

Far from it!

While the potential is there for everyone to see, Botswana’s economy is far from being dynamic.

It is a static economy, dominated by Government with very little room to play by the private sector and the young people.

There used to be a time when Botswana had a rich Government and a poor people.

Today, both the Government and the people are poor.

We often hear that Botswana Government’s investment hovers somewhere in the region of P70 billion Pula.

What is however never said, not even by the Minister of Finance in his budget speech is just how much of that is readily available on recall and how much of it is bonded as a result of international debt.

Admittedly, Botswana Government has not yet reached is borrowing ceiling as prescribed in law.

The truth however is that our Government is just as over-borrowed as is the citizens themselves.

A great proportion of the P70 billion in the investment account has been used as security by Government part of satisfying its insatiable credit appetite.

Another issue that too often is glossed over is the wealth and income disparities in Botswana.

Botswana is one of the most unequal societies. Among the top ten in the world.

Recent data indicates that 60 percent of purchasing power in Botswana resides in only 20 percent of households.

This leaves 80 percent of households to share among themselves only 40 percent of the country’s purchasing power.

This is scandalous to say the least.

Revised data indicates that known diamond reserves will get depleted by 2050.

Yet as a country we have decimally failed to prepare for a post-diamond era.

It’s totally impossible to state in clear terms just the stakes are.

In 2008 Debswana, a company that runs Botswana diamond mines had to close down owing to global meltdown.

While the closure was temporary, it offered as a country an opportunity to get a feel of just it is going to be when diamonds are no longer.

Bad as the situation was in 2008, the fact of the matter is that as a shareholder in Debswana, it was in government interest to cushion effects by insisting that people should be paid for the duration of that closure.

That will not happen in 2050.

Projects that were deferred, the backlog of which we are yet to get over with will become a new normal.

We have failed to use money from our diamonds to modernise our education system.

It is highly likely that we might never be able to achieve what is needed to prepare this country for the hardships ahead.

But there is nothing wrong in trying.

One way to go about it to reduce corruption, increase productivity, modernise education and more importantly empower the private sector.

While Batswana enjoy to be mentioned among the wealthy nations, the opposite is sadly the truth.

To his credit, the new President Mokgweetsi Masisi has said in his inaugural speech he will make employment especially among the youth his top priority.

It is impossible to fight poverty while not creating employment. That employment has to be sustainable and wealth creating.

One of the biggest mistakes we have made as a nation was to believe that Government can create employment.

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The Telegraph December 2

Digital edition of The Telegraph, December 2, 2020.