Of late, a week after another we are reminded of our country’s triple challenge of poverty, inequality and unemployment. Perhaps that should explain to you why on this space we so often make a commentary that is centred around or based on the trio.
For a country like Botswana that is one of the richest, atleast by African standards and boasting one of the highest per capita incomes, there shall never be justification for the degrading poverty which is accompanied by high unemployment rate and a huge gap between the rich and the poor.
To quote just one of the outdated statistics, the Gini index of per capita consumption rose from 58.1 percent in 1985-86 to 64.7 percent in 2002-03. Thus, inequality has increased, and the benefits of economic growth in Botswana were not shared equally among population groups. It therefore makes sense for one to make a conclusion that economic growth have always benefited the non-poor proportionally more than it did the poor.
The sad reality though is that, based on figures coming out of government enclave ÔÇô the Finance and Economic Development Ministry to be specific, it seems the cake that the government is redistributing is getting smaller by the day.
The government Budget Strategy Paper ÔÇô a fiscal update document forecasted a prolonged budget deficit in early September this year. According to the technocrats who prepared the paper, Botswana recorded a significant budget deficit of 4.5 percent of the Gross Domestic Product (GDP) in 2015/2016, due to weak global demand for diamonds which reduced revenues ÔÇô to lower than what government anticipated.
At the same time, data contained in the same paper indicate that the domestic economy will run a deficit budget for atleast the next three financial years ÔÇô 2017/18, 2018/19 and 2019/2020 respectively.
The deputy Permanent Secretary in the ministry of Finance, Kelapile Ndobano went on to confirm, at a later time, at the Budget Pitso that due to continued weak global economic recovery, and the implementation of the Economic Stimulus Programme, budget deficits are projected in the next three financial years. The Economic Stimulus Programme (ESP), as all might be aware was adopted by government in September 2015 to promote growth, economic diversification and employment creation.
With legislatures having started the debate on the National Development Plan 11 (NDP11), it is befitting to once again remind them of this triple challenge of poverty, inequality and unemployment. Not that they have forgotten but just to ask them to consider channelling their energy towards finding solutions that are also pulling its masses towards citizen economic empowerment.
Job creation and unemployment have become perhaps the most high profile and contentious issues of our time ÔÇô Mainly so due to retrenchments, restructuring of parastatals and companies as well as failure to create new jobs. Official data do show that job creation in the formal sector has been quite low in the last decade, below both economic growth and labour force growth. Annual formal sector employment growth has averaged 2.3 percent over the last decade, lower than the annual growth rate of total employment, which is approximately 3.6 percent. In 2011, the formal sector employed approximately 335 000 out of the estimated 801 529 people in the labour force and 642 065 who were employed ÔÇô in other worlds about 52 percent of those employed had formal sector jobs. However, back in 2001 the formal sector provided jobs for 59 percent of those in employment. These are the kind of job statistics that are pointing to crisis that we are facing as a nation. We therefore hope as cabinet continue to approve heavy military expenditures they are also factoring in what could come out of lack of economic empowerment of the citizenry.
Already there are indications that during NDP 11 the nation will be subjected to unnecessary expenditure. Just this past week, Justice Minister Shaw Kgathi was at pain in his attempt to “justify” reasons to spend billions of Pulas on procurement of fighter jets for the Botswana Defence Force when even the army personnel does not even have proper accommodation. The lack of decent housing is not just a problem faced by the army men and women but by the entire nation. This by extension has a great impact on the wealth of our people which also by extension result in the huge gap that we been talking about that is noticed between the few rich and masses who are impoverished. We have said it so many times in this space, and we shall continue saying it that the high property prices in this country especially housing are part of the reason why a large number of our people remain impoverished. As such we call for an urgent intervention by government and any interested party. If there is anything we should be more concerned about, and swiftly act on, it is the housing of our people, most of whom are struggling to get a small piece of land in their own country. A previous survey carried out by Finscope revealed that about 90 percent of Batswana earn not more than P10, 000 per month, which automatically results in a low uptake of financial services such as mortgage finance.
All these will ultimate weigh heavily on the social, political and economic fabric of the country. We have to be the first to admit that there is no fast cure for inequality but we have to start somewhere. In recent years there has been an ever expanding body of work that appeared like its advocates putting the citizen at the centre of economic growth.
But one ought to state that until there is a clear acceptance by government that our national budget should be used to empower citizen entrepreneurs, the eradication of abject poverty shall remain a wild goose chase. Of course we do admit that unlike citizens who dwell in a majority of other African countries, Botswana has had a lot to celebrate over the years. However, the situation is not so glittering when one pays closer attention to the plight of the ordinary citizens. On close scrutiny, it appears a number of citizens have little to celebrate as they have not been able to actively participate in Botswana’s economic growth.
Granted, government must be credited for its prudent management of mining revenues, stable democracy and good governance record. But the same government dismally failed to equitably share wealth from diamond mining among its citizens.
As such there is need for us to think about some economic reforms that could bring to an end this income disparity, brought about lately by unemployment. These reforms should be aimed at accelerating and sustaining economic growth while at the same time making it even more inclusive. To reform is to turn the inevitability of change in the direction of progress. As such, to reform is to improve the life of every citizen of this country, more especially indigenous Batswana. This should be call on all of us therefore to open a new chapter of citizen-building which would involve providing our people with the required skills to gather, understand and analyze evidence about the contexts and institutions that affect their lives. The #Bottomline is that our economy is simply not big enough to absorb everyone. Therefore a solution for us is a bigger economy, and for that we need economic growth. That is the only way we can create more jobs, decent work, rural development, food security and land reform while we fight crime and corruption.