Friday, October 30, 2020

Who is lying, Gov’t or numbers…?

The government’s record of total number of jobs lost in the past five years has been disputed, forcing the minister to cast doubt on the figures as well, conceding that some companies do not all report looming job cuts.

Minister of Employment, Labour Productivity and Skills Development, Mpho Balopi, this week told parliament that 6,314 jobs were lost between 2014 and 2018 when 155 companies retrenched some workers. The minister explained that job losses occurred due to closure of businesses, completion of projects and lack of business and organisational restructuring. The most hard-hit sectors were mining, manufacturing and construction.

Balopi’s 6,314 job losses were quickly dismissed by legislators, who questioned the accuracy of the figures given past events in which massive job cuts were reported, and cited the closure of BCL mines in 2016, estimated to have shed over 6,000 jobs on its own. However, Balopi tried to stick to his numbers and in the process exposed the inconsistencies of facts from the government, giving new figures about job losses at BCL that were lower than prior official government records.

“Actually, in 2016 alone, a total of 3,752 employees were retrenched as a result of closure of BCL and Tati Nickel and we are speaking of 6,000. As such, whether I trust my feedback or not, it is guided by the statistics in front of me,” he said. “If you know any other, I can go back and investigate as to whether there is an omission in as far as statistics are concerned, but currently this is the information I have.”

Balopi’s BCL numbers were grossly understated based on what government officials said two years earlier. The ministry of Mineral Resources, Green Technology and Energy Security officials in 2017 had put job losses at BCL at 5,486, in addition to another 838 from Tati Nickel mine, bringing total job losses from the mine closure to 6,324, a figure which was revealed to parliament by former cabinet minister Nonofo Molefhi.

Given that BCL retrenchment on its own delivered job losses that were above the supposedly 6,314 jobs lost from 2014 to 2018, Balopi had to field tough questions from members of parliament who wanted to know about reported cases of job cuts from parastatals and other business establishments. Over a thousand jobs were slashed from struggling enterprises like Botswana Meat Commission (BMC), Air Botswana, Water Utilities, Local Enterprise Authority (LEA) and Botswana Power Corporation (BPC).

In a startling revelation, the minister stopped short of admitting that some companies might be in violation of the Employment Act which requires companies to notify the Commissioner of Labour when planning to cut jobs.

“There is a process of tracking retrenchments. When a company reports to the ministry about its intentions to retrench, we start the process of engaging them and the ultimate figures. There might be an omission in that some companies might not have reported their processes of retrenchment, which is a possibility,” Balopi said.

In what appears to be a case of smokes and mirrors, Balopi tried to downplay the actual job losses at BCL, suggesting that some of the people who were retrenched from BCL were redeployed and reemployed, as such that reduced the magnitude of the retrenchments.

“It is a matter of going beyond the question and say of those who were retrenched, how many were absorbed and by who? This is another question and it does not include the private sector,” the minister said.

Balopi’s explanation of the variation between his lower job figures at BCL against earlier records from government further embellished the truth. He said some job losses at BCL people were from private companies which were subcontracted by BCL and Tati Nickel, insinuating that the companies might have not notified the labour commissioner. The minister added that there are many issues they have to look into, and that will depend on whether legislators probe further, resulting in investigations going forward.

However, Balopi’s findings will likely bring him back to the answer given by Molefhi, which gave a breakdown of job lost from BCL contractors. From the 5,486 retrenchments at BCL, only 352 were contractors’ employees, and from the 838 dismissed employees at Tati Nickel, contractors accounted for 86 jobs lost.

Faced with a troubling rise in unemployment, the government has often fumbled and has become sly in how it presents its official figures, which are for the most time confusing, and at worst misleading. Recently, the minister of Finance and Economic Development, Dr Thapelo Matsheka, also tried to downplay the unemployment rate.

“Statistics Botswana recently released its first ever quarterly labour force survey results for the three months of July to September 2019, which show an unemployment rate of 20.7 percent for that quarter. These results are for one quarter only and are subject to seasonal variations. It is therefore important to note that the unemployment rate of 20.7 percent for the quarter cannot be directly compared with the 17.6 percent annual rate for 2015/2016,” the minister said as he read the budget speech.

The government’s unemployment data has been a subject of criticism over the years, blamed for its lack of quality caused by lags and inconsistencies. According to the Quarterly Multi-Topic Survey (QMTS): Labour Force Module Report for the third quarter of 2019, total number of people employed in Botswana was 745,556, representing nearly 80 percent of the economically active force. The number was also a 12.4 percent increase from the 2016 Multi-Topic Household Study which had estimated the labour force at 689,528.

Though these figures look huge, a close look at the figures reveal that the labour force might be inflated when you look at formal employment, which are jobs from registered companies that pay tax and have employed a minimum of five people, and keep formal accounts. The QMTS reports formal sector employment at 483,814, which is 65 percent of the total labour force (745,556), and this means that 35 percent of the supposedly employed people are in the informal sector.

If you take the formal sector employment figures against the number of economically active people (940,546), the formal sector employment only accounts for 50.1 percent of the workforce, leaving many working in unregulated environments or unemployed. Though the QMTS estimates unemployment at 20.7 percent, the rate has been sneered at by many observers, estimating the unemployment rate to be over 30 percent when you start factoring in discouraged job seekers that are usually excluded when computing the unemployment rate.

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