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Botswana Vision 2036 a pipeline dream – World Bank

Realising a ‘prosperity for all’ goal by 2036 could be another wild-goose chase for opulence like Vision 2016 if the latest publication by the World Bank is anything to go by.

The World Bank’s biennial “Poverty and Shared Prosperity Report; Piecing Together the Poverty Puzzle” has forecasted that by 2030 Sub-Sahara Africa including Botswana will still be struggling to wipe out poverty-this is six years before Botswana’s Vision of 2036 where this country is set to achieve the “Prosperity for All” status. According to economists, social commentators and politicians, Botswana failed to achieve its previous goal of Vision 2016-the World Bank paints a gloomy picture for the Vision 2036 goal.

World Bank indicates that by 2030, the world is expected to have wiped out extreme poverty except for Sub-Saharan Africa—where over 25 percent of the population will be living on less than $1.90 a day. Despite forecasting that extreme poverty would still be in double digits in Sub-Saharan Africa by 2030, the forecasts indicate that the world would need to grow at an unusual strong pace in order to meet the 3 percent target.

The World Bank also advises that the target would be met if all countries grow at an average annual rate of 6 percent and the income of the bottom 40 grows 2 percentage points faster than the average. Alternatively, the landmark could be reached if all countries grow at an average pace of 8 percent according to the World Bank.

The World Bank Group has set two goals for the world to achieve by 2030: To end extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3 percent and to remote shared prosperity by fostering the income growth of the bottom 40 percent for every country. These goals coincides with Botswana’s Vision 2036 where Botswana is expected to achieve a high income economy and where they will be ‘prosperity for all.’

When adding his comment on the “Piecing Together the Poverty Puzzle,” the World Bank Group President Jim Yong Kim said: “Poverty is on the rise in several countries in Sub-Saharan Africa, as well as in fragile and conflict-affected states. In many countries, the bottom 40 percent of the population is getting left behind; in some countries, the living standard of the poorest 40 percent is actually declining. To reach our goal of bringing extreme poverty below 3 percent by 2030, the world’s poorest countries must grow at a rate that far surpasses their historical experience.

There is no room for complacency. We must intensify the effort to promote economic growth in the lagging countries and ensure that the poorest 40 percent of the population benefits more from economic progress.” A startling revelation from the latest World Bank publication is that 3.4 billion people still struggles to meet basic needs-living on less than $5.50 a day. The World Bank has concluded that nearly half the population lives on less than $5.50 a day.  

According to the World Bank, living on less than $3.20 per day reflects poverty lines in lower-middle-income countries, while $5.50 a day reflects standards in upper-middle-income countries. The World Bank has a commitment to achieve the goal of ending extreme poverty, defined as living on less than $1.90 a day, by 2030.  “Over 1.9 billion people, or 26.2 percent of the world’s population, were living on less than $3.20 per day in 2015. Close to 46 percent of the world’s population was living on less than $5.50 a day,” the World Bank said.

According to the 2015 Botswana Poverty Assessment report by World Bank, Batswana are living in extreme poverty and nearly half of them are children. Most of them remain poor or at risk for falling back into poverty, according to the World Bank report. On a high note, the 2015 Botswana Poverty Assessment also found that poverty declined from 30.6% to 19.4% between 2002-2010, particularly in rural areas, due to increased labour and agriculture-related incomes and more opportunities for the poor. This resulted in 180,000 people being lifted from poverty, 87 percent of which live in rural areas, the report says.

Other research from the World Economic Forum shows that Botswana is among the most unequal countries in the world, contributing to scepticism on attaining its Vision. In this year’s Global Competitiveness Report Botswana scored 60.5 in Income Gini. The Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality.  Currently Botswana is the fourth most unequal in the world after Haiti, Namibia and South Africa.

According to the World Bank, Botswana and other Sub-Saharan countries Africa now account for most of the world’s poor, and unlike most of the rest of the world the total number of poor there is increasing.  The World Bank says this is due to conflict and weak institutions, and a lack of success in channelling growth into poverty reduction.  The World Bank further states that extreme poverty is increasingly becoming a Sub-Saharan African problem.

African countries have struggled partly because of their high reliance on extractive industries that have weaker ties to the incomes of the poor, the prevalence of conflict, and their vulnerability to natural disasters such as droughts, according to World Bank. The 2016 Macro poverty outlook for Botswana by the World Bank highlighted this country’s risks and challenges sees Botswana as heavily dependent on commodity exports and public sector activity and will remain exposed to external shocks.

This country is highly reliant on extractive industries, especially diamond mining. “Therefore, a key risk facing the economic outlook arises from potentially slower than expected recovery of global demand for commodities including diamonds. For example, a slowdown in major economies, would further constrain diamond and other commodity production, with spill over effects across government revenues and exports. In the medium-term, structural reforms remain critical for managing volatility and sustainability risks such as reforms in the water and energy sectors, as well as policies that address labour market distortions,” said the World Bank report on Botswana.

Sub-Saharan countries like Botswana are also said to be grappled by weak institutions according to the World Bank. In Botswana’s case it should be weak parastatals or state owned companies. The 2018 Competitiveness Report released last week saw Botswana placed at 104 out of 140 countries in the category of ‘Reliability of Water Supply.’

This means Water Utilities Corporation is failing as a nation’s water supply. The utility also bears the mandate of providing safe water but the same Global Competitiveness Report finds that Botswana is susceptible to production of unsafe water, putting it on a worst rate of 102 on the ‘Exposure to unsafe drinking water’ mini index. 

In this mini index, Botswana is better than 38 countries when it comes to production of safe water. Another weak institution which could have caught the eye of the World Bank is the Botswana Power Corporation which is mostly the reason for this country scoring number 117 out of 140 countries in the mini-index of Electrification Rate according to the recent Global Competitiveness Report. The World Bank provides analysis and advice for developing countries like Botswana. It is a source of financial and technical assistance to developing countries around the world in order to work on poverty eradication.

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Government sitting on 4 400 vacant posts

14th September 2020
(DPSM) Director Goitseone Naledi Mosalakatane

Government is currently sitting on 4 400 vacant posts that remain unfilled in the civil service. This is notwithstanding the high unemployment rate in Botswana which has been exacerbated by the recent outbreak of the deadly COVID-19 pandemic.

Just before the burst of COVID-19, official data released by Statistics Botswana in January 2020, indicate that unemployment in Botswana has increased from 17.6 percent three years ago to 20.7 percent. “Unemployment rate went up by 3.1 percentage between the two periods, from 17.6 to 20.7 percent,” statistics point out.

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FNBB projects deeper 50 basis point cut for Q4 2020

14th September 2020
Steven Bogatsu

Leading commercial bank, First National Bank Botswana (FNBB), expects the central bank to sharpen its monetary policy knife and cut the Bank Rate twice in the last quarter of 2020.

The bank expects a 25 basis point (bps) in the beginning of the last quarter, which is next month, and another shed by the same bps in December, making a total of 50 bps cut in the last quarter.  According to the bank’s researchers, the central bank is now holding on to 4.25 percent for the time being pending for more informed data on the economic climate.

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Food suppliers give Gov’t headache – report

14th September 2020
Food suppliers give Gov’t headache

An audit of the accounts and records for the supply of food rations to the institutions in the Northern Region for the financial year-ended 31 March 2019 was carried out. According to Auditor General’s report and observations, there are weaknesses and shortcomings that were somehow addressed to the Accounting Officer for comments.

Auditor General, Pulane Letebele indicated on the report that, across all depots in the region that there had been instances where food items were short for periods ranging from 1 to 7 months in the institutions for a variety of reasons, including absence of regular contracts and supplier failures. The success of this programme is dependent on regular and reliable availability of the supplies to achieve its objective, the report said.

There would be instances where food items were returned from the feeding centers to the depots for reasons of spoilage or any other cause. In these cases, instances had been noted where these returns were not supported by any documentation, which could lead to these items being lost without trace.

The report further stressed that large quantities of various food items valued at over P772 thousand from different depots were damaged by rodents, and written off.Included in the write off were 13 538 (340ml) cartons of milk valued at P75 745. In this connection, the Auditor General says it is important that the warehouses be maintained to a standard where they would not be infested by rodents and other pests.

Still in the Northern region, the report noted that there is an outstanding matter relating to the supply of stewed steak (283×3.1kg cans) to the Maun depot which was allegedly defective. The steak had been supplied by Botswana Meat Commission to the depot in November 2016.

In March 2017 part of the consignment was reported to the supplier as defective, and was to be replaced. Even as there was no agreement reached between the parties regarding replacement, in 51 October 2018 the items in question were disposed of by destruction. This disposal represented a loss as the whole consignment had been paid for, according to the report.

“In my view, the loss resulted directly from failure by the depot managers to deal with the matter immediately upon receipt of the consignment and detection of the defects. Audit inspections during visits to Selibe Phikwe, Maun, Shakawe, Ghanzi and Francistown depots had raised a number of observations on points of detail related to the maintenance of records, reconciliations of stocks and related matters, which I drew to the attention of the Accounting Officer for comments,” Letebele said in her report.

In the Southern region, a scrutiny of the records for the control of stocks of food items in the Southern Region had indicated intermittent shortages of the various items, principally Tsabana, Malutu, Sunflower Oil and Milk which was mainly due to absence of subsisting contracts for the supply of these items.

“The contract for the supply of Tsabana to all depots expired in September 2018 and was not replaced by a substantive contract. The supplier contracts for these stocks should be so managed that the expiry of one contract is immediately followed by the commencement of the next.”

Suppliers who had been contracted to supply foodstuffs had failed to do so and no timely action had been taken to redress the situation to ensure continuity of supply of the food items, the report noted.

In one case, the report highlighted that the supplier was to manufacture and supply 1 136 metric tonnes of Malutu for a 4-months period from March 2019 to June 2019, but had been unable to honour the obligation. The situation was relieved by inter-depot transfers, at additional cost in transportation and subsistence expenses.

In another case, the contract was for the supply of Sunflower Oil to Mabutsane, where the supplier had also failed to deliver. Examination of the Molepolole depot Food Issues Register had indicated a number of instances where food items consigned to the various feeding centres had been returned for a variety of reasons, including food item available; no storage space; and in other cases the whole consignments were returned, and reasons not stated.

This is an indication of lack of proper management and monitoring of the affairs of the depot, which could result in losses from frequent movements of the food items concerned.The maintenance of accounting records in the region, typically in Letlhakeng, Tsabong, and Mabutsane was less than satisfactory, according to Auditor General’s report.

In these depots a number of instances had been noted where receipts and issues had not been recorded over long periods, resulting in incorrect balances reflected in the accounting records. This is a serious weakness which could lead to or result in losses without trace or detection, and is a contravention of Supplies Regulations and Procedures, Letebele said.

Similarly, consignments of a total of 892 bags of Malutu and 3 bags of beans from Tsabong depot to different feeding centres had not been received in those centres, and are considered lost. These are also not reflected in the Statement of Losses in the Annual Statements of Accounts for the same periods.

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