Once again, industry captains have condemned government’s failure to articulate clearly how the 2016/17 budget will address the issue of unemployment. Over the years, there have been calls for government to deal with the problem of unemployment using numbers that indicate exactly how it has risen or fallen; and giving a proper rundown of how many jobs will or have been created through economic interventions.
When presenting the 2016/17 national budget speech on Monday last week, Finance Minister Kenneth Matambo once again gave an abstract analogy of how the budget will create employment. He simply said government will undertake a number of economic activities aimed at creating employment, among them infrastructure backlog eradication, road networks and maintenance, wildlife and tourism initiatives, continued implementation of EDD initiatives, creation of Special Economic Zones, as well as regulatory reforms and improving efficiency.
However, the summary failed to provide details on the expected total number of jobs the projects will avail. Matambo explicitly cited the economic stimulus package (ESP) as the driving force that will fast track implementation of projects, but neither explained how nor gave specific timelines. Following the budget speech presentation, Business Botswana President Leta Mosienyane told Sunday Standard that government has once again failed to clearly explain how it was going to create value from the projects and programmes that it outlined under the job creation.
“It’s not just about allocating the money, because then that becomes a cost. It’s about what you intend to get out of the investment,” he said.
Mosienyane therefore emphasized that the design of projects and programmes anticipated to create jobs should distinguish value from cost.
“Value must replace the cost and that can only happen when government takes its real role of regulation, monitoring and evaluation,” he advised.
In a similar interview, local economist Keith Jefferies also expressed concern regarding government’s approach to job creation.
“My concern is that not enough is being done to improve the business environment because that’s where jobs are going to come from. There’s a limited amount that government can do,” he said.
He added that the business environment is not conducive enough to attract either domestic or foreign investors. With regard to regulatory reforms, Jefferies pointed out that the details of such reforms are yet to be seen.
“I’m a bit sceptical,” he said.
He singled out the issue of work permits and visas as a pressing issue that needs to be addressed with urgency.
“It’s not a budget issue but is number one in terms of improving the business climate. I’m disappointed that it wasn’t mentioned,” said Jefferies.
In his 2013 paper which sought to provide policy solutions to unemployment and poverty, Professor Brothers Malema, an expert in Development Economics at the University of Botswana, rebuked efforts by the private sector to restrict government’s involvement in productive and investment activities.
“The need to diversify the economy and address poverty and unemployment is more paramount than our economic ideals and schools of thought, which either promote or discourage government’s direct involvement in productive investment,” said Malema.
He disagrees with the private sector’s contention that government has been crowding it out of the economy, saying government cannot ‘crowd out’ what has never been ‘crowded in’.
“Government as a major player should consider utilizing foreign reserves to diversify the economy by investing directly through identification of profitable investment opportunities that will create employment and fight poverty,” argued Malema.