Wednesday, December 1, 2021

The COVID-19 Economy: Jobs are going

The outbreak of COVID-19 has not only caused uncertainties but has highlighted the well-known vulnerabilities of Botswana’s economy – largely characterised by a narrow economic base and a worrying increase in national budget deficits amid soaring unemployment rate and disfranchised citizens. 

Economic pundits – both at the government enclave and within the private sector bat the ball back and forth about the best way to keep the country’s economic engine running.

But as economic engines continue to hum, allowing businesses shift levers to adjust to the new norm trading environments under the scare of COVID 19, other sectors of the economy have already sent early warnings that they remain in the state of paralysis – a point where medical doctors would send the patient to the Intensive Care Unit (ICU) without hesitation.

One such sector that is one the ICU is the labour sector which continues to hang in the balance with early numbers showing that there has been an increase in the number of people eligible to work, but the local economy is adding jobs at a snail pace.

At the same time, the COVID19-linked economic woes unleashed mammoth job losses for the local economy as hinted by the results of a survey carried by Statistics Botswana in 2020.

The Statistics Botswana’s survey that seeks to capture the impact of COVID-19 on jobs and businesses in Botswana estimate that the total number of persons who lost jobs or businesses due to COVID-19 in 2020 reached 67,132 while those who gained employment because of COVID-19 was 19,112.

Statistics Botswana says out of the total of 67,132 persons who reported to have lost jobs/ businesses due to COVID-19, only 2,720 (4.1%) were able to find new jobs.

A breakdown of the SB data shows that Females were mostly affected by the pandemic with a total of 38,906 females (58%) was recorded to have lost jobs/ businesses whilst 28, 226 males (42%) was recorded for males. At the same time, the majority of person who were able to find new jobs/ businesses were males with 69.6 percent, while the remaining 30.4 percent was recorded by females.

A further analysis of the results indicate that job/ businesses loss was more prevalent amongst the youth in age groups 20-24 to 30-34. Age group 25- 29 recorded the highest loss with 17.9 percent. This was followed by age groups 30- 34 and 20-24 with 17.4 and 14.3 percent respectively.

Botswana’s total labour force has been estimated at 972,606 persons, comprising of 479,693 (49.2%) males, and 492,913 females (50.8%).

Statistics Botswana says out of a total of 237,222 job seekers in the last quarter of 2020, 53.4 percent (127,062) were females, compared with 46.6 percent (111,669) males. 

The state-owned stats agency says the total number of discouraged job seekers in Botswana during the fourth quarter of last year was estimated at 81,008. This is an increase of 36.8 percent (21,793) in the number of discouraged job seekers as compared to the 59,215 that was estimated for the first quarter (Q1:2020).

Botswana’s recent job losses have been strongly linked to the outbreak of the deadly COVID 19 pandemic which hit the local shores in March 2020.

Despite the State of Emergency (SOE) regulations which prohibits outright retrenchments, there are fears that the economy will bleed more jobs following COVID-19 sponsored restrictions on movement of people as well as a decision by the government to ban sale of alcohol which has hard hit the hospitality industry.

The Hospitality and Tourism Association of Botswana (HATAB) recently said that a combination of the 2020 national lockdowns, the recent night curfews, alcohol sales ban and a downturn in customer confidence has hit the country’s hospitality industry with some companies expected to shut down their doors soon.

HATAB Chief Executive – Lily Rakorong told Sunday Standard that the decision by the government to suspend the outsourcing of conference and workshops venues and the temporary ban of official trips for government officials since the beginning of the year has had a negative impact on the hospitality industry.

The lucrative tourism sector which targets wealthy tourists from USA, European and Asian countries also find itself devastated by COVID 19 as tourists cancelled all their bookings resulting in ‘No work, no pay’ for workers in that sector.

With a growing Gini Coefficient, which measures inequality, Botswana is counted among the top three most unequal countries when it comes to income and opportunities. The COVID-19 economy amongst other challenges are expected to taste the strength of the presidency of Mokgweetsi Masisi who was elected into office in October 2019 and is perceived as the “Jobs President”. Even before his election to the highest office on the land, and whilst still a stop-gap President Masisi said that his administration has recognised the need to develop an overarching National Employment Policy (NEP) for the country.

The NEP, according to the “Jobs President” was to have implementable solutions to address the unemployment problem facing the country.

Masisi said at the time that the goal of the NEP is to assist the country to achieve “productive, gainful and decent employment for all, to contribute to the reduction of income inequality and as well as to support government’s poverty eradication efforts.”

Recently Dr. Thapelo Matsheka, the country’s finance minister, was forced to make wide ranging changes to the national budget which also include a possible cut in civil service jobs.

“Government will abolish 50 percent of vacant positions, in value, as of 1st April, 2021”, Matsheka said.

Already the Directorate of Public Service Management (DPSM) has been tasked with reviewing the size of the public service. According to Matsheka, during the 2020/21 Financial Year, DPSM is expected to recommend measures to rightsize the civil service as part of over-arching public sector reforms.

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