Thursday, August 13, 2020

Dear Peggy: At bare minimum, turn that P10 million budgeted for informal sector into a grant

The Covid 19 national lockdown has been in place for close to two months now. Workers in both the formal and informal businesses sectors are among those affected by the national lockdown or social extreme distancing as referred to at the government enclave. From the start, many Batswana expressed fears on how they would survive the crisis. While they understand the need to stay at home and support the lockdown, they also realize the implication of these measures on their ability to earn a living to support their needs – both immediate and future. In response, the Botswana government, just like her peers across the world announced measures, which included amongst other things adopting fiscal and monetary policies, to mitigate the pandemic’s impact on formal businesses. One thing that has since become clear is that relief efforts as announced by the Botswana government are easy to implement, since some of them only involve changing payment policies. For instance, the government negotiated with commercial banks to offer payment holiday for those who have existing loans. There is also one certainty: the measures as announced by both the government and the financial sector primarily benefit the so-called middle class.

This is class of persons who generally have formal jobs, that pay taxes, and some have some sort of credit facilities with local banks. But the measures as announced by Finance Minister Thapelo Matsheka some few weeks ago, surely bypass our people who are in the informal sector. This is naturally so because many of the people who are in this sector often fall out of the purview of government policies and programmes. These are people who would voluntarily choose “street hustle” as opposed to being enlisted under government social programmes like Ipelegeng. This however does not mean we should not know their whereabouts as it appears to be the case now. It’s unfortunate that we do not have data base of the players in the informal sector though it can readily be available. I say we don’t have it because the minister responsible for Trade and Investment Peggy Serame recently said that the Local Enterprises Authority has been engaged in a project that would result in collection of information that would guide government on who is doing what and where in this vital sector.

In the absence of the informal sector database, and as the nation prepares for the ultimate reopening of the economy, the people in this sector are faced with one difficult decision to make – to die from hunger or from Covid-19. This is the all-too-real dilemma faced by many informal economy workers in our country. It is becoming clear and clearer each passing day that the restrictions on the movement of people and the sudden stoppage or severe downscaling of economic activities to contain the propagation of COVID-19 have had a strong impact on the livelihood of our people in the informal sector.

That is why I strongly believe that our government’s COVID-19 outbreak response measures must have been the kind that balance managing the infection without threatening this vital, yet excluded, segment of the economy – the informal sector.

Our economic relief measures should have been arranged or can be planned such that it recognises everyone’s contribution and does not allow the exploitation of those with fewer advantages. If there is one amongst many other positives out of COVID-19 is that it has given us an opportunity to demonstrate the strength and necessity of unity and non-discriminatory behavior. The exclusion of the informal sector from the programmes that have been put forward by the government is unfortunate to say the least. There is no how any sensible being can get excited or even consider an announcement made by Minister Serame a few weeks ago that P10 million has been set aside for informal sector. By her own admission, Minister Serame did state recently that while measures to relieve formal businesses were already in place, means of extending support to the informal sector were still being explored, “Owing to undocumented informal traders”. This admission speaks volume of how we have classified the people in this sector. Infact the mere fact that this cohort has been considered on what appears to be on second thoughts tells a story that as a nation we can sometimes be discriminatory. There was no hurt in making the informal sector part of the initial relief measures and ensuring that they do not only benefit from food hampers but also get some sort of financial relief more especially now that the economy is about to be re-opened.

Their inclusion at an early stage of the design process of the economic relief measures would have enhanced the effectiveness of the economic relief measures in totality. We surely do not expect any informal businessperson to afford applying for a loan given what they have been through in the last two or even more months. We must be considerate to this cohort and declare that P10 million offer as grant not loan. The truth is our leaders’ response to crisis like Covid 19 can foster social cohesion when they are perceived as being fair and making equitable demands on all members of society. We do not want a scenario where a sizeable number of Batswana feel like outcast in their own country. We cannot have Batswana feeling like foreigners in their own ancestral land. We know that it has been order of the day that Batswana are fed economic crumbs in their own land. But one must admit that our government did a commendable job of ensuring that those with formal jobs are protected against financial ruin that is facing everyone as a result of Covid – 19.

One would have hoped that the same courtesy could be passed to those in the informal sector as well. It is only in order that one call on those who make decisions to consider, beyond this crisis, to rebuild an economy in a way that gives fair value for everyone. In short, Batswana who are in the informal sector, most of whom we know are the most affected should be helped to kick-start their economic engines. As part of the bigger strategy we also need to come up with a deliberate plan that will ensure that thousands Batswana who are in the informal economy ultimately transit to the formal economy. This should be one of the priority areas in policy and law making for Minister Serame. This is necessary because it is the small engines of the informal sector that will feed the main economy.

The #Bottomline is that the COVID-19 crisis has laid bare the vulnerabilities of Batswana and Botswana. We just need to pick lessons from it and correct our path to inclusive growth and equal wealth creation.

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