The United Nations (UN) this week tore apart Botswana’s national budget saying it is failing to address a list of priorities among them high levels of employment and inequality.
In its updated Common Country Analysis (CCA) for Botswana, the UN did not have kind words for the country’s development budget saying it is “surprising that the current development budget does not lay greater emphasis on reducing unemployment, especially given the persistently high levels of unemployment.”
The UN noted that unemployment among women is even higher. “For example, skills development, school to work transition, further strengthening the TVET system, as well as investing in employment intensive sectors do not come out clearly as priorities in the budget,” it says. The UN also noted that “Given Botswana’s relatively small population (2.3 million), the absolute number of unemployed is not an unsurmountable challenge even though in percentage terms the unemployment figure is high.”
According to the UN’s report, “The proposed budget does not adequately mainstream gender and is therefore unlikely to address socio-economic gender disparities effectively.” It says while women are mentioned in the context of the Wealth Creation Programme, details are scant.” It says in order to address persistent gender inequalities while catalyzing sustainable development, there is a pressing need for gender budgeting and the adoption of special measures to address the economic exclusion of women that leads to disproportionate levels of poverty amongst women, women’s limited access to land and housing, and low levels of participation in economic development projects.
The report also notes that; “Well-planned, sequenced, and structured steps to address the unemployment issue are currently missing among the list of priorities” adding that “Even a longer-term plan for greater investment toward preprimary and primary education is missing.”
It says in the current budget (2023-24) pre-primary and primary education remain largely underfunded being allocated a meagre 0.2% (P39 million) of the Ministry of Education and Skills Development total budget.
The UN says an upper middle-income country shouldn’t typically have such high levels of unemployment and poverty. “For all intents and purposes Botswana development performance and status is more akin to lower middle-income and low-income countries even though the average per capita GNI propels it to the UMIC Upper Middle Income Countries category,” said UN. Therefore, it said, Botswana’s quest for attaining high income status should be supplemented by an equally strong emphasis on reducing inequalities, and improving performance against a range of development indicators/goals.
“The UMIC status in Botswana’s case questions the value of using a country’s income-status as a yardstick for development,” the UN said adding that “ Botswana is not the only country in the UMIC category where development levels fall far below what one would expect from a UMIC.”
For Botswana, the UN said, employment/labour related outcomes (i.e. wage differentials, occupation types, skills, etc.) and demographics are the primary contributors to income inequality, contributing 36% and 28% respectively to overall inequality.
“In the labour market, differences in skills play a critical role in determining wage levels. Given the limited number of skilled workers, returns to post- secondary education are high, which in turn increase wage disparities,” the UN said. It noted that the gender wage gap is also substantial. “A closer look at the economic life cycle reveals significant differences in wages between genders, substantially favouring men at virtually all ages except for those under the age of 30. Male labour income increases tenfold to by age 25,” the UN said. It said by age 35, male labour income is nearly one-quarter (23.4 per cent) higher than peak labour income for women. The UN said educational attainment is another major contributor to inequality, accounting for 24% of overall inequality.
“Those with post-secondary or tertiary diplomas earn significantly more than the others. A child born in Botswana in 2020 would on average reach only 41% of its potential productivity as an adult.36 Geographical location plays a role as well, accounting for about 11% of inequality,” the report noted. It further indicated that “Those living outside urban centers and are born in less affluent households are at a disadvantage as they lack opportunity, especially to avail better services (health, education, infrastructure, etc.)” The UN’s report further stated that this inequality in opportunity affects outcomes later in life and perpetuates inter-generational poverty and inequality.
Saying Botswana is at a critical juncture in its development trajectory, the UN said “Having recently weathered the negative economic shock of the pandemic and the knock-on effects of high inflation and interest rates, robust policies and programmes need to inform the next national development plan.
It said identifying priorities, by definition, means that some issues will be left out. Nonetheless, addressing Botswana’s toxic mix of very high inequality (social and economic), high unemployment, especially among women, and relatively high poverty rate (with disproportionate poverty levels affecting women) should be high on the policy agenda.