Tuesday, June 22, 2021

The stimulus package must create new jobs

There is no doubt that the country is hungrily anticipating new jobs from the highly touted but closely guarded economic stimulus package (ESP), announced by President Ian Khama recently.

There is hope that finally the bulk of Botswana’s wasted human resource talent will be able to put their graduation certificates to good use. With this wealth of talent given an opportunity to contribute gainfully and meaningfully to the country’s economy, economic welfare stands a good chance of flourishing. The country looks set to breaking new ground and charting a new path that will end the era of economic laxity and usher in an economic boom. But how much of this renewing power will actually ripple through the economy and revive it such that existing jobs, many of which appear to be hanging by the thread, are saved? Put in other words, will the anticipated new jobs close the gap created by the many jobs that were lost over the past two years? Above that, will they add to the ones that currently exist or will they merely replace them?

In retrospect, replacement of jobs does not meaningfully benefit the economy given that the employment numbers will not necessarily change. While it is fair and justified to renew the hope of job creation, it also seems counterproductive to raise expectations of gain when it’s possible that the new jobs may fail to impact employment figures positively. It wouldn’t be right to ignore the possibility that the new jobs might not effect an increasing change to the employment figures. The right course of action to be adopted in the face of such a predicament, according to President of the Botswana Exporters and Manufacturers Association (BEMA) Nkosi Mwaba, is to first protect the old jobs and then think about creating new ones.

Mwaba said this is because the economy has been repressed and lethargic, as indicated by a lack of real wage growth and dim prospects of growth and expansion. This sluggish economic environment rendered the business sector powerless as the opportunity to create jobs was swallowed by strained economic performance. Mwaba therefore said there has been a continuous struggle to retain jobs due to the tough operating conditions, particularly within the manufacturing sector.   

“We often get excited about opportunities to create new jobs, forgetting that when that happens we are still losing old jobs. If you have 10, 000 employees and you lay off 200 and tomorrow you have a new project which employs 200, you’re still going to be at 10, 000. The unemployment figures will remain unchanged,” he said.

He added that new jobs must not cancel out old jobs, but must add to them.

“First protect existing jobs and then think about creating new ones, that is the only way we can successfully say we’ve created jobs for the country,” said Mwaba.

The manufacturing sector, as was painfully observed in the last year, shed over 2,000 jobs which left a gaping hole in an economy that was already battling with high unemployment rates. Teemane Manufacturing Company, Motiganz Botswana, Discovery Metal Limited and Cadbury Botswana are examples of companies that had to either close shop or lay off employees. In a public statement released last week, Mwaba said local companies have to grapple with high costs of water and power shortages, which have resulted in reduced levels of production within the manufacturing sector.  

“This includes the pressure of retaining current employment figures.  These elements must be robustly addressed through innovative solutions that will see increased productivity in the long term,” he said.

According to Mwaba BEMA members currently employ over 12,000 people. He said the number can double over the next five years with the right investment climate and policy and legislative direction. Mwaba’s observations on the employment trend demand sobriety and focus in channelling the ESP towards accelerated job creation.

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