In 2009 there were 17 284 work permit holders, fast track to 2016 – the number had drastically dropped to 5293. The latest labour report from Statistics Botswana indicates that in June 2017, a total of 12,166 (3.0 percent) employees were non-citizens. Out of this total, Private and Parastatal sectors recorded 11,009 employees. Construction industry was the major employer of non-citizens (19.3 percent), followed by Education industry (18.5 percent) and Manufacturing industry (14.7 percent).
To several observers from various industries this is what partly contributed to job losses in different industries because company owners were denied the right to recruit skilled personnel who could help keep companies operational hence they relocated or closed down. At the centre of the controversial decisions to decline work permits applications were former DISS Director General Isaac Kgosi and former Labour Minister, Edwin Batshu. They have since left the scene, will the situation be reversed?
Clearly President Mokgweetsi Masisi is busy overwriting some elements which were unpopular but synonymous with his predecessors’ legacy like the notable purging of former Immigration Minister Edwin Batshu and intelligence boss Isaac Kgosi-a move seen by many as a way to enhance Foreign Direct Investment (FDI) as the two were seen as bogeymen for foreign investors and expatriates.
A clear sign from Government Enclave and the Office of the President is that Masisi is pushing to be a ‘Jobs President’ and he would not allow anything to stand on his way. He has been seen to be going around calling in foreign investment and trying to find means for job creation.
In former president Ian Khama’s regime there was Kgosi, a former military man and a member of the BDF commando unit who was made a feared director general of the state intelligence unit, the Directorate of Intelligence and Security (DIS), which was responsible for vetting visas and residence and work permit applications.
Before Kgosi was fired, sources allege that work and residence permits approval, rejections stood at around 20 percent and the numbers had potential to grow. Since 2008 when Khama took over, a lot of foreigners were declared prohibited immigrants and there were many haste deportations.
Two years ago, former Botswana Investment and Trade Centre (BITC) CEO Letsebe Sejoe said FDI was mostly blocked by confusions, complications and delays associated with Visa and work permit applications. Sejoe’s sentiments were also echoed by former President Festus Mogae who said foreigners no longer find this country hospitable as they can be deported anytime without explanations.
BITC, an institute tasked with FDI facilitation and performance improvement took a nosedive three months before Masisi took power. According to the institution’s annual report released in January, BITC, a 16 % overall performance decline for their operational year 2016/17. BITC registered an overall performance of 74 percent compared to the 90 percent registered in the previous year. In the same report FDI registered only 948 jobs. As if that was not enough, Botswana also continues to perform dismally in ‘Doing Business’ Index. According to the World Bank, in 2017 Botswana was number 71 in the world and in the latest ratings, it dropped drastically to number 81.
Also, last year legislators across the political divide took advantage of the Appropriation Bill debate time for the Ministry of Nationality, Immigration and Gender Affairs and expressed concern at the manner in which the Khama regime was handling visa applications and residence and work permits. The legislators were mostly of the view that the rejections would not help Botswana FDI. The MPs said the foreigners were ill treated by security officers and this would not help Botswana economically.
The Minister of Environment, Natural Resources Conservation and Tourism, Tshekedi Khama also accused Kgosi’s brigade of scaring away tourists if not blocking them from entering through Botswana borders sometimes. However Batshu, a former chief of police, defended the DIS’s style of enforcing immigration laws saying it is within its mandate. The immigration laws of Botswana also give a minister to exercise his discretion in blocking visas and work permits of foreigners.
A pundit of Public Administration Kaelo Molefhe said he hopes that the removal of Batshu and Kgosi is not just changing of furniture, as practical decisions have to be taken. Molefhe said, so far, Masisi looks exemplary as he is meeting other leaders internationally and in the region-possibly it could mean he has seen the need to improve the country’s FDI. “He has shown much and seems to be departing from tradition and the past administration,” said Molefhe.
President Masisi has so far squeezed 7500 jobs in the civil service and FDI reception will mean more jobs from the private sector too. According to business news publication Bloomberg, on Tuesday Masisi said he is “dead determined” to produce more jobs. Jobs are top of Masisi’s campaign card as he will be leading the ruling party to next year’s elections.
He has even met new Anglo American top shareholder, Indian billionaire Anil Agarwal twice to discuss about him making sure more diamonds be cut and polished in Botswana, according to Bloomberg. Anglo American owns 85% of De Beers which owns Debswana, a diamond company partly owned by the Botswana government. Masisi said there should be a way of achieving a win-win for both where De-Beers cuts diamonds in Botswana and there are jobs created.
Labour activist Johnson Motshwarakgole encourages Masisi’s move of trying to address the concerns of the people. He said he applauds Masisi, who seems to be going around looking for investors and making sure the country competes for investors. Motshwarakgole said Batshu and Kgosi should not be blamed alone as they were acting on the orders of a dictator of a president.
The labor activist also wants Masisi to make sure he improves the minimum wage and makes the salaries of young people cutting diamonds precious like the stones they sort. He said in the past diamonds workers had been paid poorly. “So far Masisi is doing many things right and should be applauded,” said Motshwarakgole.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”