As the national budget day draws closer, SUNDAY STANDARD’s TLOTLO LEMMENYANE urges that the time is now to ask the question – what good economic growth is if one cannot eat it?
Put differently how much more poverty, unequal distribution of wealth, meager earnings will the government continue to allow the iron law of capitalism to further breed?
As the days edge closer to the national budget speech anticipated to be delivered in the first week of February by Finance Minister, Kenneth Matambo, it is fair to expect people to interrogate the impending speech on whether the government has sufficiently and robustly distributed the country’s economic success.
In other words, individuals ought to find out if Botswana’s economic success is shared with them in such a manner that shows an improvement in their standard of living.
It is clear that Botswana has failed to simultaneously drive both economic growth and social inclusion. Recently poverty stats from Statistics Botswana revealed that the level of disparity in income or wealth between the rich and poor in the country has increased. The national stats agency’s computation, based on consumption, showed that the consumption Gini Coefficient increased from 0.495 to 0.5222 at national level. The Gini Coefficient is the measure used to show the unequal distribution of wealth whose range falls between zero and one, where zero means complete equality and one means complete inequality. At 0.5222 it is indicative that the nation is moving further away from complete equality. The Gini Coefficient may also be computed based on income and did the national stats agency the World Bank previously found Botswana to be the third most unequal country in the world. Moreover, despite that poverty demonstrated a downward trend over the past years it remains to be endemic across the nation. Additionally, in 2016 Statistics Botswana found that the average salary of a citizen who is formally employed was P5500 which pales against the continually rising cost of living. These indicators demonstrate Botswana’s failure in ensuring a decent standard of living for its people.
To further prove the country’s failure in terms of sharing its economic success with its people one could make a comparison between the prevailing standard of living and economic growth trend. For decades Botswana demonstrated an impressive streak of economic boom. In fact according to a study by T. C Matsheka & M. Z. Botlhomilwe The rate of economic growth during the period 1965 to 1980 and 1980 to 1989 was 13.9 percent and 11.3 percent respectively. “As the Bank of Botswana (1989: 1) stated, “the year 1989 marked the end of a decade that would stand out in the economic history of Botswana as a period of unparalleled economic growth,” cited the study. Since then, despite fluctuations in between, the economy demonstrated healthy growth and even though it has not reverted to the growth rates of the 1980s it also has not faired too poorly. The prevalence of such things as unequal distribution of wealth, poverty and meager earnings against this remarkable economic success should still not be part of the country’s narrative. Even the World Economic Forum (WEF) agrees with this.
One might suggest that Botswana, like many nations, is fixated on the iron law of capitalism and it is the reason that people’s livelihoods have not moved at the same pace as economic growth.
“A new growth model that places people and living standards at the center of national economic policy and international economic integration is required to transform inclusive growth,” cited WEF in its 2018 Inclusive Development Index report. It added; “As many countries have experienced and the Inclusive Development Index data illustrate, growth is a necessary but not sufficient condition for robustly rising median living standards. Accordingly, policymakers and citizens alike would benefit from having an alternative, or at least complementary, bottom-line metric that measures the level and rate of improvement in shared socioeconomic progress,” proposed the WEF.