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Job creation: The BOPEU perspective

BOPEU’s Edward Tswaipe

An innovative use of pension and provident funds and innovative tax incentives to release capital for private and social investments, promotion of co-operatives, mainstreaming of youth bias in job creation, incentives for skills export to create high end job opportunities, job retention strategies and for employment intensive macro-economic policy framework are collectively, a panacea for making more and better jobs possible in Botswana, according to BOPEU.


Speaking on behalf of BOPEU President, Andrew Motsamai, BOPEU’s Edward Tswaipe told the just ended Annual Botswana Job Summit that government must abandon its conservative macro-economic policy and utilize a handsome portion of the P50 billion worth of pension funds held by Botswana Public Officers Fund (BPOPF) must be utilized locally through government borrowing to finance infrastructure and large scale investment projects to create decent jobs through deepening of the domestic capital markets.


Serious consideration could also be given to implementing the recommendations of the 2008 study conducted by Keith Jefferies for Finmark Trust that a statutory consolidation of private sector retirement industry funds would yield huge benefits to the economy in terms of expanding domestic financial markets, guaranteeing social protection for all; and reducing the burden of private insurance firms which are already contributing to private pension funds for their employees. The study further recommended that firms’ mandatory contributions to social insurance be diverted to a broad based pension scheme covering the whole private sector.


BOPEU is further advocating for mandatory workers’ insurance, compulsory pension funds and other mandatory employment benefits, such as maternity benefits that are to be consolidated into a National Social Security Fund (NSSF) contributed by employers, employees and government, which in 20 years could worth well over P100-P200 billion in pension and workers’ insurance fund.

The fund could also include paternity allowances and unemployment benefits.   Government was hypocritical by not borrowing funds from pension fund to finance infrastructural development and it was wrong for her to lead a Fund belonging to workers while denying them as rightful owners the right to influence investment decisions on how their money is used.


There was need for targeted and creative use of tax incentives and youth job subsidies to sentivitise youth employment creation since tax credits are increasingly being adopted  by most countries to promote both investment and entrepreneurship and at the same time tackle the challenges of unemployment and sluggish economic growth.

Two similar programmes (NIP and GVS) are wrongly conceptualized as youth empowerment schemes rather active labour market policies because they lack the tax element embedded in their design.

Youth wage subsidies and tax credits are used worldwide as a means to increase absorption of young people into the labour market and are supported by the ILO. However, there was a danger that such subsidies could be abused and suffer the disadvantage of becoming part of the labour market flexibility and vulnerability challenges. Employers tend to use young entrants as cheap labour to displace other workers and avoid associated mandatory labour costs.

Tax incentives are also demand driven and do not adequately address fundamental causes of structural unemployment such as poor skills, limited experience and so on and points to education as the only sustainable means to labour market absorption.

The problem of youth unemployment was structural and a function of the failure of the education system to produce adequate,  appropriate skills(supply) and insufficiency of labour demand due to low growth, high skills, productivity requirements and high wage expectations.


Similarly no consideration has been made to capitalise on non-Profit Organizations such as trade unions, co-operatives and NGOs as potential job creators and no comprehensive study with the exception of that of Kalusope (2013), was ever conducted on the financial and fixed asset holdings of trade unions.

Yet, the total trade union asset holding may be in excess of P300 million with possible monthly subscriptions of more than P10 million, excluding the income from their profit making investment arms.

Co-operatives also have a similar pattern of assets and income generation, especially the Savings and Credit Coops (SACCOS) but tend to remain stuck in marketing, multipurpose cops and SACCOS.  NGOs also handle massive donor funding which could be better managed and controlled.


BOPEU is advocating for a deliberate policy mainstreaming skills development in public investment contracts in the manner of the 1070s localization policy, youth bias in job creation in the way of affirmative action, deliberate massive investment in industry relevant TEVET programmes.

The rationale for this is that in the long run, a demand relevant TEVET programme would position young people competitively for sustainable absorption and recommend that programme design should go beyond youth empowerment schemes to into ALMPs linked to the education system. Sustainability would require integration into the overarching development strategy such as industrialization strategy and not in mere disbursement of funds.


Botswana should also look into exporting skills of its technicians and professionals where it is experience an excess in supply but who are in short supply in other countries because while there are shortages in some areas there are excess in others, rather than to retrain and accept misallocated employment and underemployment.

The strategy to create jobs without an accompanying strategy to retain them is an evidence of unsustainability and BOPEU recommends job retention as an innovation embedded and mainstreamed in all job creation strategies.

Retention should be about strengthening labour market regulation and integrating industrial relations into the job retention strategy. An issue of concern is job losses due to retrenchments where the Commissioner of Labour issues a certificate upon mere pleading of bankruptcy or weak financials.

Instead it should be that a company that seeks to retrench workers should be subjecting itself to further scrutiny to substantiate its claim. A law should create a Commission made up of industry and financial experts to investigate operational requirements and report to the Commissioner before any large scale redundancy could be considered.


Part of the job creation strategy should also entail reclaiming jobs being lost to other countries through hosting o management decisions and hubbing of activities where for instance, in the banking industry, a hub is created elsewhere  in places like Kenya, Zimbabwe or South Africa, yet the company would be making its biggest profits from Botswana.”Common sense dictates that the hub should be where the business is, unless there are compelling reasons otherwise”.

In the case of retailing, local managers are being subordinated to lower ranking supervisors in Johannesburg or Cape Town for the most mundane of decisions, while in the tourism industry, group bookings to the Okavango delta are made from Johannesburg or London and payments made into foreign accounts before accessing the service in Botswana.


BOPEU wants the review of employment intensity of growth and investment and recommend the dominance of bias in monetary and fiscal policy towards more and better jobs, where employment is the means to translate growth in a sustainable route out of poverty and inequality. A long delayed National Employment Policy (NEP) should be brought to parliament as promised with targets has to integrated into National Development Plans, with decent work as a cross cutting theme.      


Policy makers must jettison the misconception that to create jobs less attention should be paid to decent work and the quality of those jobs including tenure, decent wages, compliance with labour standards, social security, job retention,  minimum wages, collective bargaining, EPL and mandatory benefits  should be part of the equation.

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DIS blasted for cruelty – UN report

26th July 2022
DIS BOSS: Magosi

Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.

Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.

She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”

Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.

On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.

“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.

One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.

The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”

The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.

Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.

Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.

The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.

The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.

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Stan Chart halts civil servants property loan facility

26th July 2022
Stan-Chart

Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.

This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.

He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.

Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”

He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.

Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.

“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.

In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”

In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.

He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.”  Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.

Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.

He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”

Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.

“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.

“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said.  Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.

Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.

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Botswana ranked 129 in female MPs representation

26th July 2022
Minister of Finance & Economic Development Peggy Serame

The Global Gender Gap Index, a report published by the World Economic Forum annually, has indicated that Botswana is among countries that fare badly when it comes to representation of women in legislative bodies.

The latest Global Gender Gap Index, published last week, benchmarks the current state and evolution of gender parity across four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment). It is the longest-standing index which tracks progress towards closing these gaps over time since its inception in 2006.

This year, the Global Gender Gap Index benchmarked 146 countries. Of these, a subset of 102 countries have been represented in every edition of the index since 2006, further providing a large constant sample for time series analysis.

Botswana ranks number 66 overall (out of 146 countries), with good rankings in most of the pillars. Botswana ranks 1st in Health and Survival, 7th in the Economic Participation and Opportunity, 22nd in Educational Attainment, and 129th in Political Empowerment.

The Global Gender Gap Index measures scores on a 0 to 100 scale and scores can be interpreted as the distance covered towards parity (i.e. the percentage of the gender gap that has been closed). The cross-country comparisons aim to support the identification of the most effective policies to close gender gaps.

The Economic Participation and Opportunity sub-index contains three concepts: the participation gap, the remuneration gap and the advancement gap. The participation gap is captured using the difference between women and men in labour-force participation rates. The remuneration gap is captured through a hard data indicator (ratio of estimated female-to-male earned income) and a qualitative indicator gathered through the World Economic Forum’s annual Executive Opinion Survey (wage equality for similar work).

Finally, the gap between the advancement of women and men is captured through two hard data statistics (the ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers).

The Educational Attainment sub-index captures the gap between women’s and men’s current access to education through the enrolment ratios of women to men in primary-, secondary- and tertiary-level education. A longer-term view of the country’s ability to educate women and men in equal numbers is captured through the ratio of women’s literacy rate to men’s literacy rate.

Health and Survival sub-index provides an overview of the differences between women’s and men’s health using two indicators. The first is the sex ratio at birth, which aims specifically to capture the phenomenon of “missing women”, prevalent in countries with a strong son preference. Second, the index uses the gap between women’s and men’s healthy life expectancy.

This measure provides an estimate of the number of years that women and men can expect to live in good health by accounting for the years lost to violence, disease, malnutrition and other factors.
Political Empowerment sub-index measures the gap between men and women at the highest level of political decision-making through the ratio of women to men in ministerial positions and the ratio of women to men in parliamentary positions. In addition, the reported included the ratio of women to men in terms of years in executive office (prime minister or president) for the last 50 years.

In the last general elections, only three women won elections, compared to 54 males. The three women are; Nnaniki Makwinja (Lentsweletau-Mmopane), Talita Monnakgotla (Kgalagadi North), and Anna Mokgethi (Gaborone Bonnington North). Four women were elected through Specially Elected dispensation; Peggy Serame, Dr Unity Dow, Phildah Kereng and Beauty Manake. All female MPs — save Dow, who resigned — are members of the executive.

Overall, Botswana has 63 seats, all 57 elected by the electorates, and six elected by parliament. Early this year, Botswana Democratic Party (BDP) secretary general and Gaborone North MP, Mpho Balopi, successfully moved a motion in parliament calling for increment of elective seats from 57 to 61. Balopi contented that population growth demands the country respond by increasing the number of MPs.

In Africa, Botswana play second fiddle to countries like Rwanda, Namibia, South Africa, Burundi, and Zimbabwe who have better representation of women, with Rwanda being the only country with more than 50 percent of women in parliament.

The low number of women in parliament is attributed to Botswana’s current, electoral system, First-Past-the-Post. During the 9th parliament, then MP for Mahalapye East tabled a motion in parliament in which she sort to increase the number of Specially Elected MPs in parliament to augment female representation in the National Assembly.

The motion was opposed famously, by then Specially Elected MP, Botsalo Ntuane, who said the citizens were not in favour of such a move since it dilute democracy, instead suggesting the Botswana should switch to Proportional-Representation-System. Botswana is currently undergoing Constitutional Review process, with the commission, appointed in December, expected to deliver the report to President Mokgweetsi Masisi by September this year.

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