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Informal sector critical for employment creation

Unlike in other countries with high unemployment rates, workers in Botswana have not engaged in widespread self-employment despite a lack of wage employment opportunities in the country. In a review carried in the Bank of Botswana (BoB) Annual Report for 2015, the central bank has decried high unemployment rate citing the small informal sector among the causes.

Growth of the sector is said to be impeded by among others lack of access to infrastructure and services, insufficient skills, low entrepreneurial drive, and rigid trade and land use regulations.

A generous social and family support system was also named as a culprit as “it could also reduce incentives to engage in informal income earning activity.”
The review pointed to evidence from other countries which suggests that the informal sector can be a source of employment opportunities, and emphasized the need to accommodate growth of informal enterprises and recognize them as partners in development.

The banking regulator suggested the provision of an enabling environment by addressing the infrastructure deficit, creating markets, and increasing access to vocational training which includes financial literacy. The bank also proposed the formulation of a comprehensive informal sector policy citing that it would balance the need for regulation with promoting economic activity and expansion of income earning opportunities.

An informal sector survey conducted in 2015 estimates that the informal sector in Botswana employs 191 000 people as of March 2015, which constitutes approximately 31% of total employment. The sector contributes an estimated 5.3% to the country’s Gross Domestic Product (GDP)

Similar sentiments are echoed by David Menyah in a PhD thesis titled The Informal Sector Revisited: Botswana’s Developmental State and Micro Enterprise Development.  The study focused on enterprises in Gaborone and found that the sector serves as an important livelihood strategy for the many engaged in it through income and employment generation.

The informal sector in Gaborone is dominated by retail, service and manufacturing respectively. Menyah observed that manufacturing was the most difficult to participate in due to constraints such as lack of suitable premises and lack of prerequisite skills and finance. The enterprises also used low levels of technology. He also observed that while over two thirds of sampled enterprises indicated that they had grown, with manufacturing recording the highest incidence of growth, their employment characteristics indicated low potentiality for growth. Most, he says, are owner operated with no permanent employees. “Less than 5% had plans to employ workers,” he asserts.

Menyah recommends that since most enterprises are owner operated, other forms of ownership like partnerships or cooperatives should be encouraged for purposes of a collective effort to ensure synergies and sharing of ideas. He suggests that government’s procurement processes and requirement should be revisited to make it easy for the informal sector enterprises to access government market. He proposes that permanent structures should be made available for the enterprises to operate from. He suggests upgrading and modernisation of technology used as poor technology and equipment compromises productivity. Finally, he recommends formulation of a comprehensive informal sector development policy.

The relationship between government and the informal sector has been other than cordial.  In Gaborone, police often fine vendors and confiscate their wares if they fail to pay.

The Thusanang Bagwebi Association (TBA), an association representing street vendors in the city, has handed petitions to successive mayors over what they termed “harassment by council officials.” Last year, 20 vendors operating in the Francistown bus rank stormed Francistown East constituency offices seeking the intervention of Member of Parliament (MP), Buti Billy. The vendors asked the parliamentarian to rein in council officials whom they said were harassing them and interfering with their small businesses.

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Hunt for new Ombudsman ongoing

17th August 2022

The Minister of Justice, Machana Shamukuni says the search to appoint the Ombudsman and other critical heads of department is currently ongoing and the process is expected to be completed before end of the year.

The Ombudsman position fell vacant almost five months ago after Augustine Makgonatsotlhe was removed from the office and appointed as Ambassador to Kuwait.

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Two Batswana detained in Zim for illegal trade in mercury

17th August 2022

Two Batswana nationals have been arrested in Zimbabwe for illegal trade in mercury. The duo is being held together with a Zimbabwean national who is being questioned by the Zimbabwe Republic Police (ZRP).

This publication understands that the suspects who are aged between 39 and 56 years hail from Tutume and Selebi-Phikwe. At the time of the arrest, they were found in possession of a pistol, bomb motor and four live rounds. It is understood that the suspects told investigators during interrogation that the deadly substance has a lucrative market in Far East countries, where the demand is high. It is further reported that the suspects claimed that the mercury can be easily accessed in mines through middleman.

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No end in sight for Botswana/ Namibia looming border row

17th August 2022

The Namibian Lives Matter Movement has weighed in on the looming border dispute between their country and Botswana.

Commenting on reports that the Namibian Parliament has dispatched a committee along the border between the two countries on fact finding mission, the group commended“the National Assembly’s Standing Committee on Foreign Affairs, De-fence and Security that will engage community members living along the Namibia Botswana Border in conducting public hearings into acts of aggression and brutality by Botswana Defence (BDF) Force against innocent and unarmed Namibians.” 

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