As a public servant in Botswana in theory you cannot have all of your pay taken away from you and there are clear limits to what can be deducted from your salary each month. There still continue to be stories of individual workers  who come home at the end of the month with zero in their pay packets.  
The unfortunate reality is that the level of private indebtedness by our nation’s public servants appears to be rising rapidly and it has become much worse in the last couple of years. In large measure this has been because the commercial banks, which no longer have the same level of previously high yielding Bank of Botswana certificates to buy, have now started making more and more loans to Batswana. To get a loan you normally need a secure income in the form of a monthly pay packet. Some 51% of the nation’s labour force works for the central government and parastatals. If you excluded the 52,000 workers that were on Ipelegeng programs then in 2012 69% of all workers are in the public sector ( including local government). The public employee in Botswana is still very much the more than average worker.
The sweet taste of debt
Public employees with their regular pay packets and jobs for what is essentially life are the prime candidates for loans from banks hungry for new debt that was once sold to the Bank of Botswana. As banks have targeted more and more personal loans to individuals as the main way in which they make money rather than from Bank of Botswana hand-outs, how much has private debt expanded amongst public servants? While Botswana is still catching up with other countries in the region to which we are normally compared eg Mauritius, South Africa and Namibia the level of debt has been growing enormously over the last two decades. Loans and advances per formal sector employee has grown rapidly from P2,792/employee in 1994 to P45,552/employee in 2011, the last year for which such data was available. While Batswana may have once been novices in the debt game twenty years ago we have certainly developed a real taste for debt in the 21st century.
The data on payrolls for Botswana central government employees over a ten year┬á period from January 2005 ÔÇô January 2014 really tells┬á quite a story about the appetite for debt by our public servants. What they show is that while wages did not grow so rapidly, especially after the economic crisis in 2008, the public sector┬á was paid more and more allowances. This has helped public servants obtain more debt.
Making More Pay and Taking Home less
When you look at the monthly deductions from average monthly gross payrolls you find a very interesting story. There is one category that includes ‘loan repayments’ as well as other deductions and this is the category that has grown most rapidly in all the deduction from monthly payroll. The most interesting result is that between January 2005-January 2014 real gross wages, salaries and allowances in 2005 increased by P278.5/month but the take-home pay of the average public servant decreased by P344 per month. So while public servants were on average being paid more gross salary they were actually getting poorer. How is this possible? The answer is that someone is in their pay packet and its probably their bank taking away loan repayments. The deduction from pay packets┬á in the public sector have grown enormously over the last ten years. This category also includes deductions for rentals, alimony payments rent arrears but the evidence suggests that the real growth comes from repayment of bank debt.
 But between 2013 and 2014 the average deduction from salaries for repayments rose from P1,217 per month in 2013 to P1,777 per month, an increase of 46%. While this cannot be considered definitive evidence of increase in debt amongst public servants,  it is very unlikely to be a result of increase in alimony payments or union dues or insurance payments that are part of this overall salary deduction. It was in this period that commercial banks were being particularly liberal  in the loans they were offering.
Does it Matter? Are they taking bribes?
If the average public servant is borrowing more and more every year and becoming more indebted, is this necessarily a bad thing? That really depends on what the loans are being used for. If they are buying real assets like real estate or a house for their family this should probably be welcomed but certainly a large part of this debt is just more and more immediate consumption. But the real cost of rising debt amongst public servants is that the more debt they get into and the less money they take home to feed their family the more likely are public servants to accept bribes and that is the consequence that should be of greatest concern to all right minded citizens. In theory public servants repayments are capped to a maximum percentage of their salaries but in practice they often go over these limits. But these numbers┬á probably underestimates the amount of debt held by our public servants as it only includes institutions like banks and other ‘legitimate’ financial institutions. What is not known is how much more of the take home salary is taken by loan sharks and others.┬á This requires further detailed research but it may never happen.
(The author sent his report to the relevant government authorities seeking an engagement with them to┬á do further research to determine how serious the problem of unsustainable personal debt was in the public sector. No-one even replied. The conclusions of the report on public sector personal debt and wages is available on the authors’s blog. Those wishing a copy of the full report can acquire a copy from the author.┬á )┬á These are the views of the author and not of any institution with which he may be affiliated.
