Sunday, December 3, 2023

Extending SOE to save jobs is like trying to hide pregnancy

By the time of writing this commentary there was no official discussion/statement on whether the State of Emergency (SOE) will be extended or not. Parliament also ended its winter session without a discussion on the matter. While the government is probably waiting for the last minute to announce its decision, a recent video of a senior government Minister Mmusi Kgafela who indicated that, “it is inevitable to extend the state of emergency” sheds light on what might happen. 

Given his position in government and the influence he could be having, one would assume that Kgafela has an insight on the thinking of this country’s leadership with much interest on the SOE this time around.  

We are all away that three Covid-19 pandemic economic shutdowns have dealt a severe blow to our wealth more especially of the poorer ccitizens and as such the need to start talking and acting for the future. 

The national and zonal lockdowns were necessary given the fact that we did not know what kind of monster we were dealing with in Covid – 19. We are now at a point where we must take steps that could lead to speed economic recovery. Those steps, in my view, do not entail extending the State of Emergency that we are currently operating under. Those who call for SOE extension do so for what even a blind man would see as selfish and shortsightedness. They say extending SOE will save jobs. Their fear is that if by end of this month we bring back our normal labour laws many companies will lay off jobs. 

What this cohort do not realise is that we at a point now where urgent measures are needed to limit the Covid-19 damage. We are at a pint where we need to rebuild the economy, and make growth more robust, resilient, and sustainable, atleast for the sake of the next generation. We cannot do that when operating under SOE. We cannot stay in a state of emergency forever. Would it even be an ‘emergency’? 

Economists and statisticians always tell us that numbers do not lie, and our economic numbers do show that when the pandemic struck, our vulnerable economy was already on its knees. 

Therefore, economic projections made by local economists and from abroad say we should have in place a strategy that will help us maintain the current size of the private sector and minimise job losses. This would not be possible if we extend SOE with the thinking that we are delaying job losses. Infact those who advocate for the SOE extension do so solely with the thinking that the regulations prohibit retrenchments. This is not entirely true. Even if such regulation were in place, many companies would naturally die if there is no financial support from everyone’s grandmother – our government. This is so because our economy structure is such that everyone from citizens to private companies is reliant on the government as the biggest buyer. This explains why when the government’s three months wage subsidy ended in July several companies started showing signs of financial stress. That is why several companies are just about to explode by a way of laying off employees. There is no doubt that we need to save jobs of these employees. If we extend the SOE with the thinking that it is the sole route to postpone job losses then we are not any different from someone who tries to hide pregnancy by wearing a big size jersey or some big cloth that covers their stomach. Ultimately the stomach will grow and everyone in the village would know that they are pregnant. 

Fortunately, our lawmakers have been discussing the midterm review of the National Development Plan 11 which we strongly believe should reflect the reality on the ground. In their discussions and ultimate decisions, our lawmakers should remain vigilant to counter potential financial disruptions. It is important that they make a provision within the national budget that will give room to get money directly into the pockets of the people of the land. This is one, amongst many other ways of ensuring that we see a quicker return to economic recovery more especially that of private businesses. We cannot let the purchasing power of the people of the land erode because such usually ends in tears for many economies. 

During this economic recovery period we need to prioritise the people of the land by giving them an opportunity for once to take the driver seat of the economy. 

We start that by letting go of SOE to allow companies to freely communicate their intentions with citizen workers. From a planning perspective this is vital as it would give us an idea of what is ahead of us. We need to know how much should be directed towards social programmes, and how much should go towards citizens enterprises development. We cannot do proper planning when we have no idea of the reality on the ground. Our delay to gather information about the reality on the ground would not necessarily turn the tables in our favour. Infact by delaying we are worsening the already bad situation. With our unemployment rate threatening to go over 30 percent even before the arrival of Covid-19, there is no doubt that our economy needs a strong dose of fiscal and monetary policy. 

We can never run away from the fact that even before the arrival of Covid – 19 several weaknesses weighed down our economy. For one thing: Growth has been slowing down, the national budget has been on the negatives and most troubling – we have been listed amongst the most unequal nation on earth for the longest time. 

Desperate times calls for bold measures, and quick implementation. We cannot carry on as if its business as usual. If for instance we budget certain amount of money to fund youth enterprises seeking to venture into agriculture, we also must put aside a portion of funds that would go towards land servicing for distribution amongst such youth. That way we will be admitting that most of our youth, just like their parents, have no land – be it for agro businesses or residency. In short, there is no use of directing CEDA to prioritise funding agro businesses when the intended beneficiaries have no land to enterprise on. Unless we want to increase their cost of business and at worst case scenario set them up for business failure. 

As they conclude the debate on NDP 11 midterm review our political leaders must always keep in mind the global political and economic context that led us where we are now. They must not ignore the fact that one reason the Covid-19 pandemic, will have, and has already had, such a serious economic impact is that countries, including ours, have organised their societies in ways that render them extremely vulnerable. Botswana has over the decades joined the world in creating a reward structure that benefits an increasingly small and select elite while devaluing the majority. The last time we checked Botswana was described as the third unequal nation in the world. This speaks to how we do things and certainly should direct how we share the cake going forward even during crisis like this. At the end, the #Bottomline is that some jobs will go and the sooner we start preparing for how we will replace them, the better for our well being and economy. 


Read this week's paper