Wednesday, October 27, 2021

Is the wage gap between expats and locals a function of the market ÔÇô or plain old discrimination?

When it comes to basic take-home salaries, the pay gap between expatriates’ workers and locals remain unchanged, latest official statistics shows.

An analysis of household earning power by the government statistics agency, Statistics Botswana (SB) shows that immigrants in Botswana continue to make more money than the locals. By June 2017, a total of 12,166 (3.0 percent) employees were non-citizens with the Construction industry being the major employer of non-citizens (19.3%), followed by Education industry (18.5%) and Manufacturing industry (14.7%).

The wage data shows that monthly average earnings for citizens stood at P5, 742, whilst that of non citizens was at P17, 379 as at the end of September 2017. The analysis for the same period also pegs the monthly average earnings for all employees during the same period at P6, 088.

A further analysis of the data showed that monthly average cash earning for employees in formal sector grew by 0.6 percent between June 2017 and September 2017. The data indicate that minimum hourly rates in Thebe per hour increased by 52 percent between 2009 and 2017 from 380 thebe to 579 thebe respectively

Botswana’s salaries disparities first came to picture some ten years ago when a study commissioned by the then Ministry of Finance and Development Planning uncovered a pattern of bias in favour of foreigners in appointments to top management positions, salary payments and the award of government tenders.

The “Consultancy on the development of a comprehensive citizen economic empowerment strategy” by Tsa Badiri Consultancy, in collaboration with New Gx Capital of South Africa, turned up facts and figures showing that Botswana’s economic playing field is tilted against Batswana in favour of non citizens. Although the report states that through its procurement strategies, government has the capacity to influence as much as 80 percent of economic activity, an analysis of companies awarded tenders by government through the PPADB shows that citizen owned companies got only 17 percent of the P1, 085 billion worth of government business between 2004 an 2006.

At the time, a survey of local companies and corporations showed that 53 percent of the top level- General Manager, CEO Managing Director positions – are held by non-citizens. The study further turned up information that the average basic pay of expatriates holding top management positions is 82 percent higher than that of Batswana holding similar positions.

Meanwhile the SB formal sector survey for the period under review shows that overall employment increased by 1.1 percent (4,627 persons) from 404,556 persons in June 2017 to 409,184 persons in September 2017. Local Government recorded the highest increase in employment of 4.3 percent, followed by Central Government and Private with 0.4 percent and 0.3 percent increase in employment respectively. Parastatal recorded a decrease in employment of 0.6 percent.

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