Sunday, October 17, 2021

Poverty stats spell doom for Botswana’s middle class

The newly released poverty numbers reveal the kind of lives average folks have, ones which lock them out of means to save for rainy days. These are lives with no or little money left for savings after meeting basic needs.

If one works in Retail Distributive Trades the minimum hourly wage rate due to them is P5.14, as obtained from the Department of Labour and Social Security, which if calculated on an eight hour day per five working days over a total of four weeks one arrives at P822.4 monthly cash income. It is against this monthly wage that a household’s cost of living is derived using the figures from the latest 2015/16 Botswana Multi Topic Household Survey (BMTHS) compiled by Statistics Botswana. The survey allows a comparison of this household’s cost of living against its minimum cash income. According to the survey, at national level, households allocated significant proportions of their consumption expenditure to Transport, at 23.9 percent, followed by Housing Costs and Food at 17.8 percent and 12.8 percent respectively. Calculating the proportions of transport, housing and food against P822.4 gives spending costs of P197.4, P148 and P106.9 respectively which if added together gives a total of P452.3. Consider a household whose sole breadwinner is a cashier who works in a retail store earning a monthly minimum wage of P822.4. After spending on transport, housing and food this household remains with roughly P307 but they still have to pay for other necessities such as water, electricity and clothing. The figures suggest that this household lives from hand to mouth.

Saving for rainy days used to be treated as an ideal but it is today seemingly growing into a need. This is because of the volatility of the economy which over the recent years has rendered many jobless. A massive number of jobs have been shed from the economy since 2014 which resulted in unfortunate events that spewed many into unemployment. Job losses are looming in struggling industries such as manufacturing, education institutions and mining. It is especially because of retrenchments and job losses that make saving a necessity to households. For households chasing after survival, whose cost of living in many instances exceeds income, saving becomes unrealistic.

The BMTHS describes poverty as a state in which consumption of a household is less than the cost of goods and services deemed sufficient to meet basic needs of its members. In other words the household is living below what is considered necessary to meet basic needs. According to the survey between 2009/10 and 2015/16 the national poverty incidence, this refers to the state of poverty, declined from 19.3 percent to 16.3 percent. The report indicates a downward trend of poverty incidence between the period 2002/3 and 2015/16 falling from 30.6 percent (2002/03) to 19.3 percent (2009/10) until reaching 16.3 percent in 2015/16. The survey does not explain the causes of poverty instead Statistics Botswana suggested that analysts who use the data deduce the causes based on the demographic and economic profiles of respective areas. Despite that poverty incidence depicts a declining trend if one considers a household earning minimum wage one may conclude that it is barely eking out a living.


Read this week's paper