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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

The Taiwan Question: China ramps up military exercises to rebuff US provocations

18th August 2022

US House Speaker Nancy Pelosi’s visit to Taiwan has violated the One-China policy, and caused the escalation of tensions across the Taiwan Strait. Experts and political observers across the spectra agree that Pelosi’s actions and subsequent pronouncements by US President Joe Biden gave impetus to an already simmering tension in the Taiwan Strait, provoking China to strengthen its legitimate hold on the Taiwan Strait waters, which the US and Taiwan deem as ‘international waters’.

Pelosi’s visit to China’s Taiwan region has been heavily criticised across the globe, with China arguing that this is a serious violation of the one-China principle and the provisions of the three China-US Joint Communiqués.  In response to this reckless move which seriously undermined China’s sovereignty, and interfered in China’s internal affairs, the expectation is for China to give a firm response. Pelosi visit violated the commitments made by the U.S. side, and seriously jeopardized peace and stability across the Taiwan Strait.

To give context to China’s position over Taiwan region, the history behind gives us perspective. It is also important to note that the history between China and Taiwan is well documented and the US has always recognized it.

The People’s Republic of China recognises Taiwan as its territory. It has always been  the case even before the Nationalist Republic of China government fled to the previously Japanese-ruled Island after losing the civil war on the mainland in 1949. According to literature that threat was contained for decades — first with a military alliance between the US and the ROC on Taiwan, and after Washington switched diplomatic recognition to the PRC in 1979 by the US One China policy, which acknowledges Beijing’s position that Taiwan is part of One China. Effectively, Taiwan’s administration was transferred to the Republic of China from Japan after the Second World War in 1945, along with the split between the People’s Republic of China (PRC) and the Republic of China (ROC) as a consequence of the Chinese Civil War. Disregarding this history, as the US is attempting to do, will surely initiate some defence reaction on the side of China to affirm its sovereignty.

However, this history was undermined since Taiwan claimed to democratise in the 1990s and China has grown ever more belligerent. Furthermore, it is well documented that the Biden administration, following the Trump presidency, has made subtle changes in the way it deals with Taipei, such as loosening restrictions on US officials meeting Taiwanese officials – this should make China uneasy. And while the White House continues to say it does not support Taiwanese independence, Biden’s words and actions are parallel to this pledge because he has warned China that the US would intervene militarily if China attacked Taiwan – another statement that has provoked China.

Pelosi, in her private space, would know that her actions amount to provocation of China. This act of aggression by the USA seriously undermines the virtues of sovereignty and territorial integrity which has a huge potential to destabilize not only the Taiwan Strait but the whole of the Asia- Pacific region.  The Americans know very well that their provocative behavior is deliberately invoking the spirit of separatism masqueraded as “Taiwan independence”.  The US is misled to think that by supporting separatism of Taiwan from China that would give them an edge over China in a geopolitics. This is what one Chinese diplomat said this week: “The critical point is if every country put their One-China policy into practice with sincerity, with no compromise, is going to guarantee the peace and stability across the Taiwan Strait.”  Therefore, it was in the wake of US House speaker Nancy Pelosi’s visit to Taiwan, that China, in a natural response revealed plans for unprecedented military exercises near the island, prompting fears of a crisis in the Taiwan Strait and the entire Asia-Pacific region. The world community must promote and foster peace, this may be achieved when international laws are respected. It may also happen when nations respect the sovereignty of another. China may be in a better space because it is well capacitated to stake its territorial integrity, what about a small nation, if this happens to it?

As to why military exercises by Beijing; it is an expected response because China was provoked by the actions of Pelosi. To fortify this position, Chinese President, Xi signed a legal basis for China’s People’s Liberation Army to “safeguard China’s national sovereignty, security and development interests”. The legal basis will also allow military missions around disaster relief, humanitarian aid and peacekeeping. In addition the legal changes would allow troops to “prevent spillover effects of regional instabilities from affecting China, secure vital transport routes for strategic materials like oil, or safeguard China’s overseas investments, projects and personnel.  It then follows that President Xi’s administration cannot afford to look weak under a US provocation. President Xi must protector China’s sovereignty and territorial integrity, of which Taiwan is a central part.” Beijing is very clear on One-China Policy, and expects all world players to recognize and respect it.

The People’s Liberation Army has made it clear that it has firepower that covers all of Taiwan, and it can strike wherever it wants. This sentiments have been attributed to Zhang Junshe, a researcher at the PLA Navy Research Institute. Zheng further said, “We got really close to Taiwan. We encircled Taiwan. And we demonstrated that we can effectively stop intervention by foreign forces.” This is a strong reaction from China to warn the US against provocation and violation of the One-China Policy.

Beijing’s military exercises will certainly shake Taiwan’s confidence in the sources of its economic and political survival. The potential for an effective blockade threatens the air and shipping routes that support Taiwan’s central role in global technology supply chains. Should a humanitarian situation arise in Taiwan, the blame would squarely be on the US.

As China’s military exercises along the Taiwan Strait progress and grow, it remains that the decision by Nancy Pelosi to visit China’s Taiwan region gravely undermined peace and stability across the Taiwan Strait, and sent a wrong signal to “Taiwan independence” separatist forces. This then speaks to international conventions, as the UN Secretary-General António Guterres explicitly stressed that the UN remains committed to the UN General Assembly Resolution 2758. The centerpiece is the one-China principle, namely, there is but one China in the world, the government of the People’s Republic of China is the sole legal government representing the whole of China, and Taiwan is a part of China. It must be noted that the US and the US-led NATO countries have selectively applied international law, this has been going on unabated. There is a plethora of actions that have collapsed several states after they were attacked under the pretext of the so-called possession of weapons of mass destruction illuminating them as threats – and sometimes even without any valid reason. to blatantly launch military strikes and even unleash wars on sovereign countrie

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Opinions

Internal party-democracy under pressure

21st June 2022

British novelist, W. Somerset Maugham once opined: “If a nation values anything more than freedom, it will lose its freedom; and the irony of it is that if it is comfort or money that it values more, it will lose that too.”

The truism in these words cannot be underestimated, especially when contextualizing against the political developments in Botswana. We have become a nation that does not value democracy, yet nothing represent freedom more than democracy. In fact, we desire, and value winning power or clinging to power more than anything else, even if it harms the democratic credentials of our political institutions. This is happening across political parties — ruling and opposition.

As far as democracy is concerned, we are regressing. We are becoming worse-off than we were in the past. If not arrested, Botswana will lose its status as among few democratic nations in the Africa. Ironically, Botswana was the first country in Africa to embrace democracy, and has held elections every five years without fail since independence.

We were once viewed as the shining example of Africa. Those accolades are not worth it any more. Young democracies such as South Africa, with strong institutions, deserves to be exalted. Botswana has lost faith in democracy, and we will pay a price for it. It is a slippery slope to dictatorship, which will bring among other excess, assault on civil liberties and human rights violations.

Former President, Festus Mogae once stated that Botswana’s democracy will only become authentic, when a different party, other than the Botswana Democratic Party (BDP) wins elections, and when the President of such party is not from Serowe.

Although many may not publicly care to admit, Mogae’s assertion is true. BDP has over the years projected itself as a dyed-in-the-wool proponent of democracy, but the moment its stay in power became threatened and uncertain, it started behaving in a manner that is at variance with democratic values.  This has been happening over the years now, and the situation is getting worse by the day.

Recently, the BDP party leadership has been preaching compromise and consensus candidates for 2024 general elections. Essentially, the leadership has lost faith in the Bulela Ditswe dispensation, which has been used to selected party candidates for council and parliament since 2003. The leadership is discouraging democracy because they believe primary elections threaten party unity. It is a strange assertion indeed.

Bulela Ditswe was an enrichment of internal party democracy in the sense that it replaced the previous method of selection of candidates known as Committee of 18, in which a branch committee made of 18 people endorsed the representatives. While it is true that political contest can divide, the ruling party should be investing in political education and strengthening in its primary elections processes. Democracy does not come cheap or easy, but it is valuable.

Any unity that we desire so much at the expense of democracy is not true unity. Like W. Somerset Maugham said, democracy would be lost in the process, and ultimately, even the unity that was desired would eventually be lost too. Any solution that sacrifice democracy would not bring any results in the long run, except misery.

We have seen that also in opposition ranks. The Umbrella for Democratic Change (UDC) recently indicated that its incumbent Members of Parliament (MPs) should not be challenged for their seats. While BDP is sacrificing democracy to stay in power, UDC is sacrificing democracy to win power. It is a scary reality given the fact that both parties – ruling and opposition — have embraced this position and believe democracy is the hindrance to their political ambitions.

These current reality points to one thing; our political parties have lost faith in democracy. They desire power more than, the purpose of power itself. It is also a crisis of leadership across the political divide, where we have seen dissenting views being met with persecution. We have seen perverting of political process endorsed by those in echelons of power to manipulate political outcomes in their favour.

Democracy should not be optional, it should be mandatory. Any leader proposing curtailing of democracy should be viewed with suspicion, and his adventures should be rejected before it is too late. Members of political parties, as subscribers of democracy, should collectively rise to the occasion to save their democracy from self-interest that is becoming prevalent among Botswana political parties.

The so-called compromise candidates, only benefits the leadership because it creates comforts for them. But for members, and for the nation, it is causing damage by reversing the gains that have been made over the years. We should reject leaders who only preach democracy in word, but are hesitant to practice it.

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Opinions

The Big Deal About Piracy

21st June 2022
piracy

Piracy of all kinds continues to have a massive impact on the global creative industry and the economies of the countries where it thrives.

One of the biggest misconceptions around piracy is that an individual consumer’s piracy activities, especially in a market the size of Botswana’s, is only a drop in the pool of potential losses to the different sectors of the economy piracy affects.

When someone sitting in Gaborone, Botswana logs onto an illegal site to download King Richard online, they don’t imagine that their one download will do anything to the production house’s pocket or make a dent in the actors’ net worth. At best, the sensitivity towards this illegal pirating activity likely only exists when contemplating going about pirating a local musician’s music or a short film produced locally.

The ripple effects of piracy at whatever scale reach far beyond what the average consumer could ever imagine. Figures released by software security and media technology company, Irdeto, show that users in five major African territories made approximately 17,4 million total visits to the top 10 identified piracy sites on the internet.

The economic impact of this on the creative industry alone soars to between 40 and 97.1 billion dollars, according a 2022 Dataprot study. In addition, they estimate that “illegally streamed copyrighted content consumes 24% of global bandwidth”.

As Botswana’s creative industry remains relatively slight on the scale of comparison to industries such as Nollywood and Nilewood where the creative industry contributes a huge proportion to West and East Africa’s respective GDPs, that does not imply that piracy activities in Botswana do not have a similar impact on our economy and the ability of our creative industry to grow.

When individuals make decisions to illegally consume content via internet streaming sites they believe they are saving money for themselves in the name of enjoying content they desire to consume. Although this is a personal choice that remains the prerogative of the consumer, looking beyond the fact that streaming on illegal content sites is piracy, the ripple effect of this decision also has an endless trail of impact where funds which could be used to grow the local creative industry through increased consumption, and revenue which would otherwise be fed back into Botswana’s economy are being diverted.

“Why can’t our local creative industry grow?” “Why don’t we see more home-grown films and shows in Botswana?” are questions constantly posed by those who consume television content in Botswana. The answer to this lies largely in the fact that Botswana’s local content needs an audience in order for it to grow. It needs support from government and entities which are in a position to fund and help the industry scale greater heights.

Any organisational body willing to support and grow the local creative industry needs to exist and operate in an economy which can support its mandates. Content piracy is a cycle that can only be alleviated when consumers make wiser decisions around what they consume and how.

This goes beyond eradicating piracy activities in so far as television content is concerned. This extends to the importation and trade in counterfeit goods, resale of goods and services not intended for resale across the border, outside its jurisdiction, and more. All of these activities stunt the growth of an economy and make it nearly impossible for industries and sectors to propel themselves to places where they can positively impact society and reinvest into the country’s economy.

So what can be done to turn the tide here in Botswana in order to see our local production houses gain the momentum required to produce more, license more and expand their horizons? While those who enforce the law continue to work towards minimizing piracy activities, it’s imperative that as consumers we work to make their efforts easier by being mindful of how our individual actions play a role in preventing the success of our local creative networks and our economy’s growth.

Whether you are pirating a Hollywood Blockbuster, illegally streaming a popular Motswana artist’s music, or smuggling in an illegal decoder to view content restricted to South Africa only, your actions have an impact on how we as a nation will make our mark on the global landscape with local creative productions. Thembi Legwaila is Corporate Affairs Manager, MultiChoice Botswana

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