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Of Public Investments and Unemployment

When the rest of the world went into a recession in 2008 and subsequently recovered from it, President Ian Khama lauded his administration for remaining steadfast in the face of calamity. This only tells part of the story. As the economy improved after the recession, our success in withstanding the storm was measured by non- job losses and return to economic growth due to increase in mining output. But the other part of the story is more sinister, the growth has been slow and the level of unemployment has been staggeringly high. According to the latest statistics, unemployment rate stands at 19.8 percent.


What we currently have in Botswana is a clear case of structural unemployment, a situation where at a given wage, the quantity of labour supplied exceeds the quantity of labour demanded due to the mismatch of the number of people who want to work and the number of jobs that are available. There is no easier way out of structural unemployment. It is a problem that is large in magnitude and painstakingly hard to solve. The end results of unemployment are not pretty at all: despair and dejection, social costs, economic losses, political and budgetary pressures.


Policymakers in Botswana are faced with challenges on how to formulate policies that create work for those who want to work in a country that currently has little to offer. And by creating jobs, we mean decent and meaningful jobs that bring dignity to the worker.

Surprisingly, the policymakers know what needs to be done, in fact it appears they have all the conventional ingredients: stimulate economic growth, improve education and skills transfer, embrace technology and innovation, deal with barriers to market entries, boost public investment, grow the private sector, promote citizen empowerment and entrepreneurship. So one is inclined to ask that despite all these efforts why is the Botswana economy faltering, more importantly, why they haven’t decisively dealt with the growing unemployment rate. 

The answer may lie with the lackadaisical approach of the government and how they determine the rate of return on investments. Quite often, the government will talk about how much they have spent and little on what was achieved on that money spent. This could be solved by instituting strong structural reforms.


The most obvious structural reform that the government has to undertake is to build effective and sound institutions. Such institutions should be able to enforce good governance, transparency and accountability. If they are able to do that, the quality of supervision and monitoring will ensure the government gets a good return on its investments.

Consider this, if the government had sound institutions, it wouldn’t have lost hundredths of millions through corruption, project delays and cost overruns. And not only that, heads would have rolled for those responsible for the mess. In the absence of effective institutions, some people have acted with impunity: after all it’s only the government money they are wasting.   But this is money that could have been put for better use and the purpose it was intended for, including curbing the unemployment rate.


Indeed much of the government’s failures can be largely blamed on poor implementation. To be sure, the Botswana government has some good policies that have set it apart from other African countries. This is the government that has spent lots of money on public investment, think of the free education and health. But the country has been caught wanting in terms of policy implementation, as we speak the country’s education is in crisis. The problem is much deeper as it was long in the making: putting emphasis on government expenditure and little on the returns on investments.

For example, over the years the government has largely focused on quantity rather than quality in the education sector. The end result has been proliferation of graduates with half baked degrees which have led to employers shunning them for their lack of skills. While this has contributed to the rising number of unemployed graduates, it has been manna from heaven to the profit oriented private schools that have benefitted from the government expenditure on education yet delivered so little.

A quick survey of the private institutions (particularly tertiary education providers) reveals that majority of the owners and lecturers are foreigners.  This clearly shows that public investment is not sufficiently enough if it’s not properly monitored and evaluated. There is a need for a culture of transparency and accountability so as to ensure that everyone benefits from public investments as well as prevent any potential abuse by greedy business people.


Granted, the government of Botswana cannot alone create jobs for the unemployed. A robust private sector could prove to be a critical tool in helping the government deal with the unemployment rate. Without proper structural reforms that encourage private investment and entrepreneurship, the government would continue carrying the burden and on top of that having to deal with the ever increasing wage bill that has made it difficult for the government to adjust salaries.

While the government has some existing policies that could help grow the private sector, such as citizen empowerment schemes and other financing institutions (Citizen Entrepreneurial Development Agency, Botswana Development Corporation etc), the returns and benefits have not been forthcoming. Once again I will fault the government for not enforcing quality supervision and stricter monitoring.

The government needs to deal with problems facing start-up companies, in case policymakers are not aware, these problems transcends beyond the usual capital problems. What the government must do is confront large enterprises (monopolies, oligopolies etc) blocking fair competition from small medium enterprises (SMEs).

While at it, the government is best advised to ensure that it has effective tax systems for these huge enterprises. The most recent report from Global Financial Integrity (see http://www.gfintegrity.org/) has pointed to illicit financial outflows; such acts together with tax evasion are not good for the economy.


Furthermore the private sector and entrepreneurship in Botswana is built on sand. Their business operations are heavily dependent on doing business with the government. This is hardly surprising given the population (market size) and the fact that the government is the biggest spender. But in the long run this is unsustainable, especially when the government is looking at belt tightening measures. The government tenders have given birth to the wrong kind of entrepreneurs, entrepreneurs who lack good work ethics and productivity. Such entrepreneurs lack the innovation needed to grow the private sector.

These entrepreneurs (now popularly referred to as tenderpreneurs) have poor savings rate, weak human capital and zero plans for further expansion or diversification of their businesses. It does not help the situation that the tendering process in Botswana has been fraught with errors and given rise to corruption (bribery, inside trading etc). What the economy of Botswana needs is businesses that will not only add value to the economy (think industries like manufacturing which are exports oriented) but actually hire unemployed people.

It’s disheartening how a company which employs less than 20 people can win multimillion tenders. What is the government getting in return? While other than inflated prices they pay for doing business with the private sector, the government is not getting much in return. Growing the private sector should not equate to doling out tenders, the government must ensure that it does business with companies that have vested interest in growing the economy of the country, not companies that want to line their pockets. In addition the government should look at the supply chain and determine if citizens are benefitting from the tenders it gives out, it should also ask itself if there are any skills being transferred to citizens.


Any person with a decent grasp of economics will tell you the significance of statistics in dealing with the unemployment problem. Besides structural reforms, the government should look more into labour market policies. Such policies should be focused on relevant statistics: collecting the data which is needed in determining which skills are needed in the labour market, the required training and workplace flexibility.

This approach will have two aspects to it. Firstly it will ensure that students make well informed decisions on what to study and which skills to gain in order to improve their employment opportunities. Secondly labour market data will ensure policy makers are in tandem with education providers as well as employers on which fields to invest money in hence closing the gap between skills mismatch.

The labour market data could also be used to gauge the progress the country has made in terms of the localisation of certain job positions, how many citizens sit on executive management positions and more importantly if employers engage on training and transferring expertise skills to citizens. The national internship program is a welcome development despite the justified criticism.

The purpose of the program is to facilitate the integration of inexperienced workers into the workforce, while helping to correct skills mismatch and skills transfer from experienced workers. But the successes of the program lies in the government monitoring the progress to ensure that interns are gaining valuable knowledge as well as ensuring they are not being exploited as a form of cheap labour.


Implementing structural reforms and a renewed policy momentum remains integral to any successful growth strategy. Like anything else they will be challenges. Some of these challenges emanate from political posturing, when politicians with short term visions cannot get a clear picture of the economy, this happens when self interests precedes national interests. There will also be resistance from big companies and individuals that prefer the status quo because it benefits them. But should these challenges be ignored, the unemployment problem will deepen resulting in immense social, economic and political costs: increase in inequality, poverty, corruption and potential for political backlash.


To solve a problem, it is not enough to know what to do. You actually have to implement the solution and be willing to change course if it turns out that you did not know quite as much as you thought. Not only that, the government should be serious about return on their investments, and that starts with effective institutions that can properly supervise and monitor projects. On that regard, the government of Botswana has some fantastic policies but they require concerted efforts during implementation and evaluation stages.

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Opinions

Accounting Officers are out of touch with reality

19th October 2020

Parliament, the second arm of State through its parliamentary committees are one of Botswana’s most powerful mechanisms to ensure that government is held accountable at all times. The Accounting Officers are mostly Permanent Secretaries across government Ministries and Chief Executive Officers, Director Generals, Managing Directors of parastatals, state owned enterprises and Civil Society.

So parliament plays its oversight authority via the legislators sitting on a parliamentary committee and Accounting Officers sitting in the hot chair.  When left with no proper checks and balances, the Executive is prone to abuse the arrangement and so systematic oversight of the executive is usually carried out by parliamentary committees.  They track the work of various government departments and ministries, and conduct scrutiny into important aspects of their policy, direction and administration.

It is not rocket science that effective oversight requires that committees be totally independent and able to set their own agendas and have the power to summon ministers and top civil servants to appear and answer questions. Naturally, Accounting Officers are the highest ranking officials in the government hierarchy apart from cabinet Ministers and as such wield much power and influence in the performance of government.  To illustrate further, government performance is largely owed to the strategic and policy direction of top technocrats in various Ministries.

It is disheartening to point out that the recent parliament committees — as has been the case all over the years — has laid bare the incompetency, inadequacy and ineptitude of people bestowed with great responsibilities in public offices. To say that they are ineffective and inefficient sounds as an understatement. Some appear useless and hopeless when it comes to running the government despite the huge responsibility they possess.

If we were uncertain about the degree at which the Accounting Officers are incompetent, the ongoing parliament committees provide a glaring answer.  It is not an exaggeration to say that ordinary people on the streets have been held ransom by these technocrats who enjoy their air conditioned offices and relish being chauffeured around in luxurious BX SUV’s while the rest of the citizenry continue to suffer. Because of such high life the Accounting Officers seem to have, with time, they have gotten out of touch with the people they are supposed to serve.

An example; when appearing before the recent Public Accounts Committee (PAC), Office of the President Permanent Secretary, Thuso Ramodimoosi, looked reluctant to admit misuse of public funds. Although it is clear funds were misused, he looked unbothered when committee members grilled him over the P80 million Orapa House building that has since morphed into a white elephant for close to 10 successive years. To him, it seems it did not matter much and PAC members were worried for nothing.

On a separate day, another Accounting officer, Director of Public Service Management (DPSM), Naledi Mosalakatane, was not shy to reveal to PAC upon cross-examination that there exist more than 6 000 vacancies in government. Whatever reasons she gave as an excuse, they were not convincing and the committee looked sceptical too. She was faltering and seemed not to have a sense of urgency over the matter no matter how critical it is to the populace.

Botswana’s unemployment rate hoovers around 18 percent in a country where majority of the population is the youth, and the most affected by unemployment. It is still unclear why DPSM could underplay such a critical matter that may threaten the peace and stability of the country.
Accounting Officers clearly appear out of touch with the reality out there – if the PAC examinations are anything to go by.

Ideally the DPSM Director could be dropping the vacancy post digits while sourcing funds and setting timelines for the spaces to be filled as a matter of urgency so that the citizens get employed to feed their families and get out of unemployment and poverty ravaging the country.
The country should thank parliamentary committees such as PAC to expose these abnormalities and the behaviour of our leaders when in public office. How can a full Accounting Officer downplay the magnitude of the landless problem in Botswana and fail to come with direct solutions tailor made to provide Batswana with the land they desperately need?

Land is a life and death matter for some citizens, as we would know.

When Bonolo Khumotaka, the Accounting Officer in the Ministry of Land Management, Water and Sanitation Services, whom as a top official probably with a lucrative pay too appears to be lacking sense of urgency as she is failing on her key mandate of working around the clock to award the citizens with land especially those who need it most like the marginalised.  If government purports they need P94 billion to service land to address the land crisis what is plan B for government? Are we going to accept it the way it is?

Government should wake up from its slumber and intervene to avoid the 30 years unnecessary waiting period in State land and 13 years in Tribal land.  Accounting Officers are custodians of government policy, they should ensure it is effective and serve its purpose. What we have been doing over the years, has proved that it is not effective, and clearly there is a need for change of direction.

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Opinions

Is it possible to make people part of your business resilience planning after the State of Public Emergency?

12th October 2020

THABO MAJOLA

His Excellency Dr Mokgweetsi EK Masisi, the President of the Republic of Botswana found it appropriate to invoke Section 17 (1) of the Constitution of the Republic of Botswana, using the powers vested in him to declare a State of Public Emergency starting from the 2nd April 2020 at midnight.

The constitutional provision under Section 17 (2b) only provided that such a declaration could be up to a maximum of 21 days. His Excellency further invoked Section 93 (1) to convene an extra- ordinary meeting of Parliament to have the opportunity to consult members of parliament on measures that have been put in place to address the spread and transmission of the virus. At this meeting Members of Parliament passed a resolution on the legal instruments and regulations governing the period of the state of emergency, and extended its duration by six (6) months.

The passing of the State of Emergency is considered as a very crucial step in fighting the near apocalyptic potential of the Novel COVID-19 virus. One of the interesting initiatives that was developed and extended to the business community was a 3-month wage subsidy that came with a condition that no businesses would retrench for the duration of the State of Public Emergency. This has potentially saved many people’s jobs as most companies would have been extremely quick to reduce expenses by downsizing. Self-preservation as some would call it.

Most organisations would have tried to reduce costs by letting go of people, retreated and tried their best to live long enough to fight another day. In my view there is silver lining that we need to look at and consider. The fact that organisations are not allowed to retrench has forced certain companies to look at the people with a long-term view.

Most leaders have probably had to wonder how they are going to ensure that their people are resilient. Do they have team members who innovate and add value to the organisation during these testing times? Do they even have resilient people or are they just waiting for the inevitable end? Can they really train people and make them resilient? How can your team members be part of your recovery plan? What can they do to avoid losing the capabilities they need to operate meaningfully for the duration of the State of Public Emergency and beyond?

The above questions have forced companies to reimagine the future of work. The truth is that no organisation can operate to its full potential without resilient people. In the normal business cycle, new teams come on board; new business streams open, operations or production sites launch or close; new markets develop, and technology is introduced. All of this provides fresh opportunities – and risks.

The best analogy I have seen of people-focused resilience planning reframes employees as your organisation’s immune system, ready and prepared to anticipate risks and ensure they can tackle challenges, fend off illness and bounce back more quickly.  So, how do you supercharge your organizational immune system to become resilient?

COVID-19 has helped many organisations realize they were not as prepared as they believed themselves to be. Now is the time to take stock and reset for the future. All the strategies and plans prior to COVID-19 arriving in Botswana need to be thrown out of the window and you need to develop a new plan today. There is no room for tweaking or reframing. Botswana has been disrupted and we need to accept and embrace the change. What we initially anticipated as a disease that would take a short term is turning out to be something we are going to have to live with for a much longer time. It is going to be a marathon and therefore businesses need to have a plan to complete this marathon.

Start planning. Planning for change can help reduce employee stress, anxiety, and overall fear, boosting the confidence of staff and stakeholders. Think about conducting and then regularly refreshing a strategic business impact analysis, look at your employee engagement scores, dig into your customer metrics and explore the way people work alongside your behaviours and culture. This research will help to identify what you really want to protect, the risks that you need to plan for and what you need to survive during disruption. Don’t forget to ask your team members for their input. In many cases they are closest to critical business areas and already have ideas to make processes and systems more robust.

Revisit your organisational purpose. Purpose, values and principles are powerful tools. By putting your organisation’s purpose and values front and center, you provide clear decision-making guidelines for yourself and your organisation. There are very tough and interesting decisions to make which have to be made fast; so having guiding principles on which the business believes in will help and assist all decision makers with sanity checking the choices that are in front of them. One noticeable characteristic of companies that adapt well during change is that they have a strong sense of identity. Leaders and employees have a shared sense of purpose and a common performance culture; they know what the company stands for beyond shareholder value and how to get things done right.

Revisit your purpose and values. Understand if they have been internalised and are proving useful. If so, find ways to increase their use. If not, adapt them as necessities, to help inspire and guide people while immunizing yourself against future disruption. Design your employee experience. The most resilient, adaptive and high performing companies are made up of people who know each other, like each other, and support each other.

Adaptability requires us to teach other, speak up and discuss problems, and have a collective sense of belonging. Listening to your team members is a powerful and disruptive thing to do. It has the potential to transform the way you manage your organisation. Enlisting employees to help shape employee experience, motivates better performance, increases employee retention and helps you spot issues and risks sooner. More importantly, it gives employees a voice so you can get active and constructive suggestions to make your business more robust by adopting an inclusive approach.

Leaders need to show they care. If you want to build resilience, you must build on a basis of trust. And this means leaders should listen, care, and respond. It’s time to build the entire business model around trust and empathy. Many of the employees will be working under extreme pressure due to the looming question around what will happen when companies have to retrench. As a leader of a company transparency and open communication are the most critical aspects that need to be illustrated.

Take your team member into confidence because if you do have to go through the dreaded excise of retrenchment you have to remember that those people the company retains will judge you based on the process you follow. If you illustrate that the business or organization has no regard for loyalty and commitment, they will never commit to the long-term plans of the organisation which will leave you worse off in the end. Its an absolutely delicate balance but it must all be done in good faith. Hopefully, your organization will avoid this!

This is the best time to revisit your identify and train your people to encourage qualities that build strong, empathetic leadership; self-awareness and control, communication, kindness and psychological safety.  Resilience is the glue that binds functional silos and integrates partners, improves communications, helps you prepare, listen and understand. Most importantly, people-focused resilience helps individuals and teams to think collectively and with empathy – helping you respond and recover faster.

Article written by Thabo Majola, a brand communications expert with a wealth of experience in the field and is Managing Director of Incepta Communications.

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Opinions

Elected officials should guard against personal interest

23rd September 2020

Parliament was this week once again seized with matters that concern them and borders on conflict of interest and abuse of privilege.

The two matters are; review of MPs benefits as well as President Mokgweetsi Masisi’s participation in the bidding for Banyana Farms. For the latter, it should not come as a surprise that President Masisi succeeded in bid.

The President’s business interests have also been in the forefront. While President Masisi is entitled as a citizen to participate in a various businesses in the country or abroad, it is morally deficient for him to participate in a bidding process that is handled by the government he leads. By the virtue of his presidency, Masisi is the head of government and head of State.

Not long ago, former President Festus Mogae suggested that elected officials should consider using blind trust to manage their business interests once they are elected to public office. Though blind trusts are expensive, they are the best way of ensuring confidence in those that serve in public office.

A blind trust is a trust established by the owner (or trustor) giving another party (the trustee) full control of the trust. Blind trusts are often established in situations where individuals want to avoid conflicts of interest between their employment and investments.

The trustee has full discretion over the assets and investments while being charged with managing the assets and any income generated in the trust.

The trustor can terminate the trust, but otherwise exercises no control over the actions taken within the trust and receives no reports from the trustees while the blind trust is in force.

Botswana Democratic Party (BDP) Secretary General, Mpho Balopi, has defended President Masisi’s participation in business and in the Banyana Farms bidding. His contention is that, the practise even obtained during the administration of previous presidents.

The President is the most influential figure in the country. His role is representative and he enjoys a plethora of privileges. He is not an ordinary citizen. The President should therefore be mindful of this fact.

We should as a nation continue to thrive for improvement of our laws with the viewing of enhancing good governance. We should accept perpetuation of certain practices on the bases that they are a norm. MPs are custodians of good governance and they should measure up to the demands of their responsibility.

Parliament should not be spared for its role in countenancing these developments. Parliament is charged with the mandate of making laws and providing oversight, but for them to make laws that are meant solely for their benefits as MPs is unethical and from a governance point of view, wrong.

There have been debates in parliament, some dating from past years, about the benefits of MPs including pension benefits. It is of course self-serving for MPs to be deliberating on their compensation and other benefits.

In the past, we have also contended that MPs are not the right people to discuss their own compensation and there has to be Special Committee set for the purpose. This is a practice in advanced democracies.

By suggesting this, we are not suggesting that MP benefits are in anyway lucrative, but we are saying, an independent body may figure out the best way of handling such issues, and even offer MPs better benefits.

In the United Kingdom for example; since 2009 following a scandal relating to abuse of office, set-up Independent Parliamentary Standards Authority (IPSA)

IPSA is responsible for: setting the level of and paying MPs’ annual salaries; paying the salaries of MPs’ staff; drawing up, reviewing, and administering an MP’s allowance scheme; providing MPs with publicly available and information relating to taxation issues; and determining the procedures for investigations and complaints relating to MPs.

Owing to what has happened in the Parliament of Botswana recently, we now need to have a way of limiting what MPs can do especially when it comes to laws that concern them. We cannot be too trusting as a nation.

MPs can abuse office for their own agendas. There is need to act swiftly to deal with the inherent conflict of interest that arise as a result of our legislative setup. A voice of reason should emerge from Parliament to address this unpleasant situation. This cannot be business as usual.

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