Monday, July 4, 2022

Khama’s obsession with poverty eradication should not be at expense of middle class

No doubt about it, President Ian Khama’s grand plan to fight poverty is not by any imagination a bad thing as that segment of the society was getting forgotten and passed over by capitalism. There is nothing wrong with the President showing the zeal and ambition, especially in as far as it applies to eradicating squalor and abject poverty.

Critics have, however, been ready at hand to question the president’s approach.

We share some of the concerns over approach – that of┬á eradication.

Poverty eradication has eluded even the mighty economies of the United States, Western Europe and many parts of the developing world.

China, which has registered continuous economic growth for over ten years has rural poverty as its most stubborn challenge.

These are economically more powerful countries that have at their access more than just political will but resources as well.

 Khama has put himself under pressure and got himself blinded himself by a misconception that money is the solution to all problems, that you can throw money at problems and get results.

It is for those misconceptions that in his quest to eradicate poverty, the president has wilfully forgotten other constituencies in the country.

The money that the President is using to fight poverty is the money churned out by taxpayers.

In the past, such money would be coming from diamonds.

But the President can just check with his Minister of Finance to get figures of the contribution made by taxpayers, especially the middle class that the President loathes.

Increasingly, the taxpaying middle class is proving itself a crucial cog necessary to keep the wheels of the state treasury running.
 How often does Khama address students at tertiary institutions to hear their difficulties in learning? How often does he attend world forums like U.N meetings or regional meeting to sell Botswana to the world? Does he ever meet small business owners to hear their problems? Does he ever think of the working and middle class?

 A lot can be said about him shunning press conferences, lack of attending global meetings for world and regional leaders (forget Conservation International Board Meeting). The biggest worry is that Khama is not affording enough protection to the middle and working class.

This is despite the fact that these are the people who fund his populist gestures around the country.

 These are the people he will need next year when there is a shortfall in the national budget as the diamond recovery is still struggling to gain traction. The Southern African Customs Union is negotiating a revenue sharing formula, which is likely to affect government coffers from the next financial year. Therefore, it is important that the presidency works towards shielding the working and middle class because these are the people who are likely to be affected most when government thinks of adjusting taxes to fill the gap that SACU receipts will leave next year.

 With the drop of SACU receipts the most obvious option available to government  to balance the books would be to increase income tax and VAT.

Diamond revenues are still under pressure because demand for diamonds is failing to gain momentum. The negotiations at SACU will no doubt affect receipts due to Botswana.

SACU representatives think by December a new revenue sharing formula might be in place, which will mean that the P13.68 billion Botswana made this year from customs and exercises might be halved.

 If government decides to adjust taxation to avoid budget deficit, this is the time for government to start getting closer to the tax payers. Already, the working class is under tremendous pressures from a host of difficulties, including high cost of living as rental charges keep on going up without salary adjustments in both government and private sector. Food prices are at the highest levels because of high oil prices; electricity tariffs have been adjusted to cushion the failures of both government and Botswana Power Corporation.

This has made life more unbearable for an ordinary worker.

But it is the undisguised hostility from government that gets the middle class to ask itself if the sacrifices are worth it, or if they are being appreciated at all.

On another scale, SME sector is not supported enough because of lack of empowerment legislations; large corporations that pay large amounts of tax to the state are under pressure from load shedding that has reversed production gains and there is also no market of goods and services because of diminished purchasing powers.

Khama should look at these difficulties that these constituents face and these are the people he might look for when the chips are down. He must take a leaf from ┬áBarrack Obama’s book; Obama is putting his head on the block by shielding the middle class from the effects of economic recession.

Unless Khama wants to leave an impoverished middle class as part of his legacy, he must start giving them the attention they deserve.


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