Tuesday, September 22, 2020

Botswana’s social security expenditure set to grow as Gov’t announces increase in allowances

BY VICTOR BAATWENG

The government through the ministry of Local government is set to dig deeper into public coffers to finance the social security programmes during 2019/2020 financial year.

Botswana’s social protection system has three major categories – social insurance, social assistance or safety nets, and active labour market programmes. In the social safety net category are scholarships and sponsorships which support students in tertiary education, accounting for 1.4 percent of GDP and nearly half (45.3 percent) of total social-assistance spending.

While in July 2018 the ministry responsible for tertiary education announced a P200 increase for student’s allowance, this past week its local government counterpart also hiked monthly social welfare cash allowances for various community committees by P50.00. At the same time, old age pension cash allowance will also be increased by P100 effective April 2019.

As a results of the anticipated hikes in cash allowances amongst others, pundits believe that Botswana’s social security expenditure could grow up to undesirable levels.

The international Monetary Fund has also in the past questioned the country’s expenditure in education and social safety nets, saying the return on these investments is not clear.

At the same time, the Botswana Institute of Development Policy Analysis (BIDPA) has also previously suggested improvement to the social protection programmes which included tightening the safety net to eliminate fragmentation and curtailing over-generous benefits.

SOCIAL SECURITY POOLING

Meanwhile Professor Alex van den Heever – chairperson in the field of Social Security at Wits School, South Africa says Sub Saharan Africa is characterised by informal social protection adding that Botswana has low levels of adequate social protection.

According to Professor van den Heever, social protection is a scheme that distributes risk in society caused by things regarded as unavoidable and unpredictable with the danger of causing harm to everyone. Falling into poverty as may be caused by weak economic conditions, getting old which is rather inevitable, becoming unemployed are some of the examples he gave of the risk contingencies.

Social security pooling, which is what he referred to as the management of such risk contingencies, he said, is done in two different forms. One is the horizontal pooling which distributes risk between people who today need protection and those who don’t, giving the example of a smaller family supporting a larger family. Two is in the form of income in that a higher income group supports a low income group.

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