Saturday, August 15, 2020

CEDA’s new guidelines ignored specific advice from BIDPA

Some two years ago, a premier, government owned and funded think tank published research findings that say that where self-employment is concerned, there are two very important groups that the government is not focussing on: the elderly (including pensioners) and the widowed.

“The older an individual becomes, the more likely he/she enters into self-employment,” asserts Tshepiso Gaetsewe, an Associate Researcher at the Botswana Institute of Development Policy Analysis (BIDPA) in a study published in 2018 that is titled “Determinants of Self-employment in Botswana.”

However, a little over a week ago, when President Mokgweetsi Masisi launched the revised Citizen Entrepreneurs Development Agency (CEDA) guidelines that were specifically targetted for COVID-19, he made clear (by omission) the fact that the elderly and the widowed were still not a priority.

“The revision addressed such issues as loan limits, interest rates, equity requirements, training and mentoring, repayment periods as well as inclusivity, which talks to access to finance by women, youth and people with disabilities,” the president said.

Not only have the elderly and the widowed also been affected by COVID-19 as a special category, but Gaetsewe’s findings show that having accumulated human, physical and financial capital over time, these people are better positioned to engage in entrepreneurship. The BIDPA researcher laments the fact that despite the latter, grants, training and other benefits are mainly targeted at the youth.

“Government should also target older potential entrepreneurs with accumulated experience to encourage them to go into self-employment, and to further promote employment creation, economic diversification and poverty reduction,” she says.

One of the determinants that Gaetsewe considered was age which, in other studies, produced mixed results on whether older or younger entrepreneurs are more likely to enter into self-employment. She summarises these results thus: “Some have found that younger individuals are more likely to enter into self-employment than older individuals. This is because older people are more risk averse compared to the youth who also still have the energy to meet the work demands of a business. However, other studies have found that older individuals are more likely to enter into self-employment than younger individuals. This is because older individuals may have acquired more human and physical capital than the youth, and they may have established better networks.”

Further to old age being an incentive for venturing into business, the study found that the age of the head of household has a positive impact on self-employment.

“The estimated marginal effect suggests that a one-year increase in age of the household head would increase the likelihood of being self-employed by 0.81 percentage points. Therefore, older individuals are more likely to be self-employed than the youth,” says the study, adding that having retired from paid employment, self-employment is the only option available to the elderly.

The results also indicate that a household head who is widowed is 5.2 percentage points more likely to be self-employed than a person who has never been married. From the latter, Gaetsewe surmises that widowed individuals are forced into self-employment as a means of survival to compensate for the decrease in the overall household income due to the loss of a spouse. Consequently, she recommends that entrepreneurship programmes should place emphasis on upliftment of widows to ensure they are not excluded.

“The results further reveal that married, separated or divorced household heads are not different from being never married when it comes to making self-employment decisions. Similarly, cohabiting household heads are not different from those that were never married when it comes to making self-employment decisions,” she adds.

Why the government would continue to ignore advice from its own and internationally-ranked think tank (one of the best in five in Africa according to the Fraser Institute in Canada) can be attributed to at least three reasons.

Firstly and largely due to absence of a communications policy at central government level, Botswana doesn’t have a system through which research is widely disseminated. Six years ago, the European Union collaborated with the Ministry of Investment, Trade and Industry to conduct research on the agricultural sector and produced very useful findings. Sunday Standard has determined that these findings never reached a high enough number of farmers and the result has been that very few are benefitting from them.

Secondly and even in cases where they have been favoured with research findings, it is commonplace for governmental organisations to ignore such findings. Alongside the United Nations Development Programme, BIDPA has conducted an in-depth study into the Integrated Support Programme for Arable Agriculture Development (ISIPAAD), which was introduced by former president Ian Khama.  Both concluded that the multi-million pula programme was a huge failure because it didn’t achieve its objectives. UNDP found that while the objectives and service packages of ISPAAD seemed desirable from a national agricultural development perspective, the execution and outcomes of the programme had failed to achieve the intended objectives making it a sub-economical and inefficient intervention from an investment and agricultural development point of view. For its part, BIDPA concluded that ISPAAD failed to reduce acreage diversity and may have depleted soil nutrients.While ISIPAAD should have been an improvement on the failed Accelerated Rainfed Arable Programme (ARAP), BIDPA found that that the programmes are essentially the same and yielded about the same results. That notwithstanding, the Minister of Agricultural Development and Food Security, Dr. Edwin Dikoloti, has indicated that ISPAAD is being “reviewed.”

Thirdly, the youth get special attention and indulgence from the government not because they are the neediest but because collectively, their numerical strength makes them the most electorally important voter constituency. Even without BIDPA research so indicating, the government knows that many more groups are as needy but displeasing the youth has political cost. 

Gaetsewe’s research doesn’t make this point but compared to the youth, the elderly and widowed are likelier to have received much better (in some cases First World) education than the youth, most of whom went to fly-by-night schools that a former University of Botswana Vice Chancellor says should even be realistically called universities. Not that the elderly and widowed should be favoured over the youth but international best practice shows that a country benefits most when it puts its collective human capital to the best possible use.

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