Sunday, October 17, 2021

Unemployment poses Quandary to Botswana’s economy

Last week Monday at the Central Bank’s economic briefing of business journalists, the bank reported that unemployment ‘have reached critical proportions’ and has consequently blighted the growth record that the country trailed. 

Based on the BoB annual report and other past publications on employment figures, it is fair to say that lack of sustainable jobs has stolen the peace of the country. 

However, without causing alarm and avoiding the same cynical description that has repeated itself in media reports, public and closed door discussions, it seems fair to take stock of the progression, regression and challenges that presently reflect the state of unemployment in Botswana. 

It would seem however that from the era of post independence at the cusp of the 80’s the Central Bank, according to a research paper by T. C Matsheka & M. Z. Botlhomilwe, described the period as one of unparalleled economic growth in the economic history of Botswana. 

“The rate of economic growth during the period 1965 to 1980 and 1980 to 1989 was 13.9 percent and 11.3 percent respectively,” cites the report. Botswana was at the time counted among the fastest growing countries in the world. But from a research paper by Noman M. Hiza on youth unemployment: an analysis of the problem and possible solutions in Tanzania, Kenya and Botswana, a cold reality erases this unimpressive track record. 

“Despite its economic and demographic advantages, Botswana is faced with an unemployment problem of similar proportions to that of Kenya and Tanzania,” cites Hiza. It is clear that the problem of unemployment exists but what is not clear on the other hand, as was indicated by Matthew Wright Deputy Director under Research at Bank of Botswana is the informed analysis and response to unemployment. Wright admitted to the problem of unavailability of data on unemployment, but however hastened to argue that it does not imply that the available data is not accurate. “It is not a matter of integrity, but that data is not produced in the amount of detail required,” he contended. 

Taking into consideration solutions that have been suggested, it seems the extent of the problem further assumes a vague state. Manufacturing, for example, has been looked upon as a sector with significant potential to provide jobs given its labour intensive nature. The challenge however is that the existing policy and legislative framework within the sector does not harness the potential. Despite the funding boost that government has insistently committed to the sector, the results still do not show. The latest boost, under the Economic Stimulus Program (ESP) doesn’t also promise to overturn the challenges. In a previous interview with the Botswana Exporters and Manufacturers Association (BEMA) President Nkosi Mwaba put it clearly that a stimulus on its own will not work. “It needs to come alongside policy reforms. If the policy mechanism reacts quickly enough to go along with the ESP then it will be ideal. Under the current circumstances that local producers are operating in, the ESP on its own will have a lot of challenges. It can only work if it comes with reforms that are more pro-local development, pro-industrialisation and pro-diversification,” said Mwaba. 

Another example is Foreign Direct Investment (FDI) which has often been described as evasive and unresponsive. It is a fact that Botswana’s competitiveness is fraught with a mix of complex hindrances. A research paper by Dr. Moffat and Mavis Moalosi-Kolobe questions the manner in which the term ‘competitiveness’ is loosely used. The paper brings to the fore the misuse of the term, “competitiveness” as it is defined by the global competitiveness report, versus what investors perceive as attractive to business and market opportunities that lure them to a particular region. “If Botswana is to attract the FDI it requires, more attention needs to be paid to the cost of doing business, and not just improving the business climate and competitiveness. Competitiveness reports do not measure competitiveness in terms of whether Botswana firms can produce goods and services at a lower cost than firms in other countries,” argues the paper.  

A much broader suggested solution points to the private sector. Jobs, as it has been clearly pronounced will come from the private sector. However the private sector contends that government is yet to introduce reforms to the business environment that will allow it to function as it should: a significant contributor of growth. In a previous interview with local economist Keith Jefferies a concern was raised regarding government’s approach to job creation. “My concern is that not enough is being done to improve the business environment because that’s where jobs are going to come from. There’s a limited amount that government can do,” he said.

The obvious question now is where the solutions will come from. A 2015 research survey by Latang Sechele that conducted focus groups with unemployed young people, two in Gaborone and two in Mogoditshane, presents a strong argument that “over a long period of time, children and youth have been presented as objects rather than subjects in studies that affect them. Consequently in youth policy designs, it has always been the ideas and voices of adults, officials and experts that are often projected (Barker & Weller, 2003; Sechele, 2015).” It posits that because unemployment largely affects young people they should as a result be given a voice in tackling the problem.  Titled In their own words: Unemployed young people on tackling youth labour market entry constraints in Botswana; the paper captured the perceptions of young people regarding what constituted the constraints to labour market entry that they faced in which they suggested how such constraints could be addressed. 

One of the suggested solutions, formation of an Unemployed youth organisation, a young female person is captured saying “Sometimes we just talk…but we do not let the policy makers know about it. Our ideas and suggestions must be implemented by those who are in a position to do so. We need to form a group as young people to make sure this is done.” 

Another possible solution regarding enforcement of minimum wage, young people raised the lack of enforcement of minimum wage legislation and the fact that some activities are not covered. 

A young person voiced that “Also if a minimum wage limit could be set and implemented seriously, I take it that at the moment the minimum wage is about P800; but it is not being followed at all and this discourages many of us. If this was followed up and implemented, I could actually go and look for a job as a house maid because I think P800 is something I can work for. But this law is not implemented at all. When you get a job as a maid you get paid only P300 by employers which are not adequate to meet our needs.” 

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