With a quarter of its population under 25 years of age, and one of the highest rates of youth entrepreneurship in the world, Botswana has a significant demographic dividend ahead, so says Dorothy Tembo – International Trade Centre Deputy Executive Director.
However, Tembo said the tiny southern African nation which borders South Africa, Zimbabwe, Namibia and Zambia has to redouble its efforts to create jobs for the 37 percent of young people currently unemployed.
Tembo, who was speaking at the launch of Botswana’s Small and Medium Enterprises (SME) competitiveness survey report held in the capital Gaborone this past week said that the country needs a comprehensive youth employment strategy. The strategy, amongst other things could be helpful to identify bottlenecks, crafts solutions, and in so doing catalyses job creation.
“For example, providing management training to young people can be transformative, helping their enterprises survive and thrive. And since youth-led firms hire more young people, this would include young people in the transformation of the economy,” Tembo advised.
Botswana is said to have roughly 575,000 people aged below 25 years, which represents a quarter of the country’s estimated 2.3 million population. About 37 percent of people below 25 years are said to be unemployed, forcing some into entrepreneurship.
In early 2018, a study carried by the United Nations (UN)’s reproductive health and rights agency – United Nations Population Fund (UNFPA) cautioned that Botswana does not have the luxury of long-term planning to maximise its first demographic dividend.
The Demographic Dividend refers to the temporary economic benefit that can arise from a significant increase in the ratio of working-age adults relative to young dependents that result from fertility decline.
As part of their recommendations, the economic think tanks who compiled the report cautioned Botswana government and all development actors “to act with urgency and implement game-changer interventions”.
According to the UNFPA report, Botswana’s window of opportunity for harnessing her first demographic dividend opened before 1990, while the magnitude of the first demographic dividend peaked in 2008 and it is now in the diminishing returns phase until around 2050 when the window of opportunity will close.
The study shows that the cumulative boost in living standards emanating from the first demographic dividend between 1990 and 2060 will be 36 percent.
“Of this, 24 percent has already been accumulated between 1990 and 2015 while the remaining boost of 12 percent will accrue between 2015 and 2060, assuming the country follows the Medium fertility variant of the UN population projections”, state part of the report.
Botswana’s SME ccompetitiveness survey report comes at a time when there is mounting uncertainty relating to trade tension between the United States and China which is pushing global buyers to start looking for new, stable, open countries to source their inputs. Pundits suggest that countries with many well educated, skilled English-speaking young people are well placed to tap into these markets.
Services sector for instance, the global services trade is booming and the share of services in global value chains is increasing and as such, Botswana is said to be well positioned to capture a share of the services export market thanks to its strong service sector firms and stable governance structures.
At the same time, the window of opportunity provided by the signing of the African Continental Free Trade Area will kick-start a whole new epoch of trade flows in value-added goods across the continent.
Tembo said that these opportunities are enticing adding that there are brilliant Batswana entrepreneurs interested in capitalizing on them. The government and business support institutions are playing an important role in supporting the private sector, and particularly the women and youths, to seize such opportunities.
In 2018 the Ministry of Youth Empowerment, Sport and Culture Development said the Youth Development Fund – YDF is getting a reboot after dismal performance marked by high failure rates, poor record keeping and disastrous payment collections. The YDF funds businesses started by young people between the age of 18 and 35, dispensing about P120 million annually. Funding is in the form of 50 percent loan while the other half is a grant.