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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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Woman swindled out of P62 000 by fake CID officers

17th June 2021
Motube

Botswana Police Service (BPS) has indicated concern about the ongoing trend where the general public falls victim to criminals purporting to be police officers.

According to BPS Assistant Commissioner, Dipheko Motube, the criminals target individuals at shopping malls and Automated Teller Machines (ATMs) where upon approaching the unsuspecting individual the criminals would pretend to have picked a substantial amount of money and they would make a proposal to the victims that the money is counted and shared in an isolated place.

“On the way, as they stop at the isolated place, they would start to count and sharing of the money, a criminal syndicate claiming to be Criminal Investigation Department (CID) officer investigating a case of stolen money will approach them,” said Motube in a statement.

The Commissioner indicated that the fake police officers would instruct the victims to hand over all the cash they have in their possession, including bank cards and Personal Identification Number (PIN), the perpetrators would then proceed to withdraw money from the victim’s bank account.

Motube also revealed that they are also investigating a case in which a 69 year old Motswana woman from Molepolole- who is a victim of the scam- lost over P62 000 last week Friday to the said perpetrators.

“The Criminal syndicate introduced themselves as CID officers investigating a case of robbery where a man accompanying the woman was the suspect.’’

They subsequently went to the woman’s place and took cash amounting to over P12 000 and further swindled amount of P50 000 from the woman’s bank account under the pretext of the further investigations.

In addition, Motube said they are currently investigating the matter and therefore warned the public to be vigilant of such characters and further reminds the public that no police officer would ask for bank cards and PINs during the investigations.

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BCP walks out of UDC meeting

15th June 2021
Boko and Saleshando

Botswana Congress Party (BCP) leadership walked out of Umbrella for Democratic Change (UDC) National Executive Committee (NEC) meeting this week on account of being targeted by other cooperating partners.

UDC meet for the first time since 2020 after previous futile attempts, but the meeting turned into a circus after other members of the executive pushed for BCP to explain its role in media statements that disparate either UDC and/or contracting parties.

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Katlholo wins against DPP

15th June 2021
DCEC DIRECTOR: Tymon Katlholo

The Director General of the Directorate on Corruption and Economic Crimes (DCEC), Tymon Katlholo’s spirited fight against the contentious transfers of his management team has forced the Office of the President to rescind the controversial decision. However, some insiders suggest that the reversal of the transfers may have left some interested parties with bruised egos and nursing red wounds.

The transfers were seen by observers as a badly calculated move to emasculate the DCEC which is seen as defiant against certain objectionable objectives by certain law enforcement agencies – who are proven decisionists with very little regard for the law and principle.

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