Tuesday, April 23, 2024

Trade Ministry introduces performance-based subsidy for Textile sector

The Ministry of Trade and Industry has introduced a strict performance based incentive programme as an employment subsidy for the ailing Textile and Clothing sector.

The Ministry announced this week that the programme contrasts with the previous one called the Special Support Fund programme which was introduced post 2008 global recession to cushion the Textile and Clothing industry after mass loss of employment.

The Special Support Fund Programme was introduced after about 4000 jobs were lost due to mass retrenchments accounted to 2008 global recession.

According to the Ministry, this programme was specifically in view of its employment potential for unskilled labour. But it had too many flaws, said the Ministry.

“The programme only managed to provide short term support, but contributed very little to the Sector’s competitiveness and sustainability because it was not performance based,” read the Ministry’s assessment documents.

The documents further state that there was also lack of proper monitoring and evaluation tool resources by government hence leading to the abuse of various programmes.

Also, the programme did not increase employment or increase productivity or result in sustainability of development because companies started to retrench as soon as the programme was terminated, said the Ministry.

According to the Ministry, a lesson was learnt from this hence the introduction of the performance based incentive support.

“Because of lesson learnt over the years from supporting this sector such as FAP, SMME loan and Special Support Fund, it is recommended that the Special Support Programme be discontinued and replaced by the performance based incentive programme,” said the Ministry.

Chief Industrial officer in the Department of Industrial Affairs, Uno Tapela, said unlike the previous government funding programme, this new employment subsidy programme will not be “spoon-feeding” but strictly performance based.

“The company assisted must show tangible results. Companies employing at least ten or exporting qualify for a wage subsidy under the programme,” said Tapela.

The government is expected to offer subsidy based on Ipelegeng programme rate of P20.00 per worker per day.

Tapela said the expectation is that companies will be operational and have a minimum of ten workers and exporting their products.

“About ten applications have been received and approved. Four from large scale, three from medium scale and another three from small scale,” said Tapela.

The MTI data show that of the 10 companies, six companies are based in Gaborone, two in Fransistown, one in Selibe Phikwe and another one is at Lobatse. A total of P630 680. 00 has already been disbursed according to Tapela.

Tsholofelo Motshabi, an entrepreneur from Bobonong however said the process of applying and registering is a long and daunting exercise. She said this programme is favourable to only those in urban areas as it is seen by the ten who have already applied.

“Where and how can I get employees? Local employees are a problem and have poor work ethics…..for me to have ten of them will be a disaster,” Motshabi told Sunday Standard on the sidelines of the Ministry’s Consultative Forum.

She said she has only hired two workers and reaching the expected 10 employees will be a long process. She lamented that this programme would also harbour an unskilled labour force with poor work ethics.


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