Sunday, June 23, 2024

In Botswana the foreigner is king

A classic citizen empowerment story culled from the realm of apocrypha finds Louis Nchindo at the peak of his political influence arguing with former President Festus Mogae. The then Debswana Managing Director had by this point become frustrated that the president was not buying into citizen empowerment campaign. Nchindo supposedly asked Mogae: “Since you believe expatriates are more capable than Batswana, would you have a problem if Batswana were to demand that an expatriate be brought in to be the president of Botswana?”

Today, a similar debate is raging in bars, boardrooms, freedom squares and academic halls where champions of citizen empowerment are taking architects of Botswana’s policy to task over its two tier salary system that has spawned a legion of expatriates with a taste for expensive cars, posh mansions and a high-rolling lifestyle.
In his research paper, University of Botswana lecturer, Dr Monageng Mogalakwe, talks of “a foreign labour aristocracy in Botswana.”

“The devices put in place to attract and retain expatriates, in the form of incentives such as inducement allowances and contract additions, were not really anything original, as they were based on what used to prevail in colonial Botswana, with regard to the two tier salary structure, one for white, mainly South African “expatriates” and another for indigenous Batswana”, says Dr Mogalakwe in his research paper: The making of a foreign “labour aristocracy” in Botswana.

He argues that the wage differentials were influenced by the policy of racial discrimination in South Africa where the policy of equal pay for equal work did not apply.

Dr Monageng paper joins the debate on labour aristocracy, “with the purpose of showing that in Botswana there exists an upper stratum of workers whose earnings and overall terms and conditions of service validate some of the key assumptions of the labour aristocracy thesis.” He argues that “it is in this stratum of workers, the expatriates, who have assumed salaries, terms and conditions of service attached to the posts previously held by white colonial officers, rather than Botswana citizens in managerial and professional posts.” The paper examines how the post colonial salary structure, with its built in benefits, has enabled this stratum of working class to enjoy conditions of service and standards of living superior to those of the rest of the working class in Botswana. “In other words, the wage and salary structure continued to discriminate against Botswana citizens. It was like pouring new wine in old bottles. Although the two tier structure was supposed to be a short term tactical arrangement to attract skilled labour from abroad, it has become part of Botswana’s industrial relations.”
For sometime, Botswana was the fastest growing economy in the world. The country’s economy grew at the average rate of nine percent since 1974\1975 mostly because of diamonds as a whole, leading international commentators to describe Botswana as an economic miracle. Not only has Botswana been able to reverse its balance of payment deficit, but currently the country’s foreign reserves stand at about $6 billion, equivalent to more than 24 months of imports.

Dr Mogalakwe points out that, “there are however at least two interesting features of Botswana’s economic development that warrants special attention. The first is that unemployment, poverty and overall social inequality has grown side by side with this much vaunted phenomenal economic growth.”

The most recent but conservative statistics estimate that 45 percent of Botswana’s income goes to only 10 percent of the population and 23.4 percent of Batswana live on less than one dollar a day.“The second interesting feature of Botswana’s economy is that the economy is largely foreign controlled and owned,” stated Dr Mogalakwe.

A report by Tsa Badiri consultancy released last year revealed that between 2004 and 2006, of the 124 companies that were awarded government contracts, worth about P1,085 billion, 62 percent of them were citizen owned, 23 percent foreign owned and 15 percent joint ventures between citizens and foreigners.

However, in terms of the value of the business awarded, citizen-owned companies got a mere 17 percent while a colossal 78 percent went to foreign owned companies. The Tsa Badiri consultancy further revealed that the average size of credit facility granted to a citizen owned company was about P170 000 compared to the average size of credit facility of P800 00 granted to a foreign owned company. The report consultancy further found that 53 percent of top level management positions of managing director, chief executive officer and general manager are held by foreigners. In the tourism sector, 86 percent of these positions are held by foreigners, and in the construction and manufacturing sector the figures are 64 and 60 percent respectively.

“The question is how has it been possible that Botswana’s phenomenal economic growth has not benefited the majority of its citizens?” asks Dr Mogalakwe.

The Tsa Badiri report maintains that there is no explanation for these wage differentials. Dr Mogalakwe insists that, “in fact there is. During the colonial days, citizens of Botswana were deliberately paid low wages on the basis that equal pay for equal work would create an expensive local elite cut off from the vast majority of the peasants, increase government costs and would be economically unsustainable in the long term. In the post colonial period, the citizens of Botswana were again deliberately paid lower wages on the assumption that a policy of equal pay (with expatriates) for equal work would mean less employment opportunities for other citizens. As a result expatriates are still notched above citizen employees of similar qualification, skill or experience.”
Further aggravating the situation, expatriates are paid gratuities, ostensibly in order to compensate them for lack of job security, while citizens are locked in pension schemes for their “own good” and have to wait for their retirement, so that they will have something to live on.


Read this week's paper