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Jobs Stats hoist red flags

This week President Dr Mokgweetsi Masisi admitted to job creation being one of his “greatest” struggle, saying the economy is failing to yield jobs as yet. The President further, through the local media midweek, addressed Batswana’s impatience on lack of jobs saying but the economy would not work that way.

Masisi who has been dubbed the “Jobs President” when taking over presidency in 2018 is already feeling the heat from his critics who are accusing him of being Janus-faced when addressing the unemployment issue. Masisi’s critics were up in arms after the president recently sounded to divert that which he made his top priority even when he took leadership of the ruling party in 2016, job creation.

Last month from the Masisi was accused of trying to divert his promise of creation of jobs to the private sector when coming from his World Economic Forum trip; this topic that even made a big national debate towards and after the Budget Speech of 2020. Leader of the private sector Gobusamang Keebine has said job creation should be led by government with policy and good governance.

"My duty as the president is to create environment for jobs to be created. I cannot open a brick manufacturing factory and employ people but i create conducive space for investors to do so and employ local people instead. I attend world summits to create space for jobs to be created,” this created a big uproar with some seeing the president to be speaking with a forked tongue in his jobs creation mandate.

Even though dishing out old statistics of the 2015/16 unemployment rate, finance minister during the Budget Speech admitted that “the unemployment rate has remained a cause for concern, at annual rate of 17.6 percent of the labour force in 2015/16.”  Opposition legislators after the budget speech were already saying Masisi is failing in job creation while some Mps from the ruling party kept the president’s stance that jobs would come with partnership with the private sector, allowing more capacity for economic activity.

Recent statistics from Statistics Botswana shows that the unemployment rate is increasing, the three months of July to September 2019 shows idleness rate of 20.7 percent for the third quarter of 2019. According to Quarterly Multi Topic Survey Labour Force Module Report- Q3 2019, the unemployed population is 194 990, with 93 190 men unemployed who are less than women who are jobless in Q3 2019 being 101 799. The unemployed population has grown by 32.5 percent in the quarter under review when compared to the preceding quarter in the Statistics Botswana records.

The unemployed population with disability increased by 7.3 percent in Q3 2019 from Q2 2019. Youth unemployment increased by 1.6 percent while youth not in education, not in employment or training rate increased by 4.7 percent. Statistics Botswana recently released its first ever quarterly labour force survey results for the three months of July to September 2019, which show an unemployment rate of 20.7 percent for that quarter.

Talking about the same sQ3 2019 results and bringing them closer to the concern of unemployment rate that seem not to be curbing according to statistics during the recent budget speech, Matsheka said the unemployment rate of 20.7 percent for the quarter cannot be directly compared with the 17.6 percent annual rate for 2015/2016. These results are for one quarter only and are subject to seasonal variations, he explained during the reading of the budget speech.

“….Successful economic diversification requires an economic growth rate that is high enough to generate sufficient jobs to address unemployment, raise household incomes and reduce poverty. This has not yet been achieved and the unemployment rate has remained a cause for concern, at annual rate of 17.6 percent of the labour force in 2015/16, according to data from Statistics Botswana. Therefore, accelerated growth, consistent with Vision 2036, will require a mix of policies that promote export diversification in goods and services to impact unemployment, especially among the youth,” said Matsheka.

 The working poor and disparities

Menial jobs or piece jobs took a larger population of the country’s employment, meaning a lot of Batswana were absorbed to work for ‘small jobs.’ The report says the largest proportion of jobs is found in the elementary occupations with 114,766 persons representing 23.7 percent of the entire labour force. This jobs were followed by occupations in the service/sales workers with 112,707 persons (23.3 percent) while professionals were at 12.7 percent or had 61,652 persons employed.

When the Statistics Botswana revealed the Q3 2019 monthly average cash by occupation it shows that monthly average cash earning by occupation professionals who were not the most employed in the population were the highest earners, recording P12 455 followed by managers and Technicians & Associate Professionals with P11,122 and P10,171.

With complaints still high that Botswana’s minimum wage is low to the benchmark, the rest of the population who are the most employed earn peanuts. Unlike their counterparts at professional level, the mostly employed in the population, elementary workers average earning is the lowest recording at P1 286.

And foreigners showed to be earning more than their Batswana counterparts with average earnings for non-citizens was estimated at P5, 117, P12, 794 and P5, 404 for all employees. The national records reveals that Fourth Quarter FSES monthly average cash earnings for Citizens was 6,206, while for 2019 QMTS was 5,117, for Non-Citizens was 20,374, from QMTS was 12,794, for all Employees was 6,533, while for QMTS was 5,404.

Foreigners got most jobs at the education sector recording 19.6 percent (3,546 persons), followed by Construction and Human Health and Social Work Activities with 17.8 (3,236 persons) and 14.1 percent (2,560 persons) respectively. In a case showing gender disparity, in almost all industries males earns more than females, this is an exception in industries like Real Estate Activities, Arts, Entertainment and Recreation, Health, Extraterritorial Organisation where women get better salaries than men.

According to Statistics Botswana, males recorded P6, 729 and for females was P4, 178 in total formal sector employment monthly average cash earnings. In total the third quarter 2019 (July to September 2019) estimated average cash earning from the 2019/20 QMTS Formal Sector Employment with the Fourth quarter 2018 Formal Sector Employment Survey (FSES) shows that there was a decrease in average earnings.

The national statistics has further seen that at industry level, Accommodation and Food Service Industry have employed more females, accounted for 70.5 percent of employees working in the industry, followed by Education with 65.7 percent. However construction and Mining & Quarrying were the two industries which have employed lowest proportion of females recording 11.3 percent and 19.3 percent of female employees.

 
Men mostly get jobs in cities and towns while their female counterparts are seen working at rural areas according to the latest statistics. But in urban areas like Gaborone and Francistown many women recorded a higher percentage in employment than males being at 51.7 percent for females as compared to 48.3 percent for males.

The capital city Gaborone recorded the highest number of people working in Formal Sector, recording 16.5 percent, followed by Kweneng East with 13.8 percent and Central Serowe with 6.2 percent and males were dominating in formal sector employment almost in all the cities according to statistics. Females were many in formal employment were recorded in all the district except Kgatleng, Ngamiland East, Kweneng East, Central Mahalapye and Kgalagadi South.

Education, skills match issue

Statistics Botswana refer to elementary jobs as “mostly unskilled” but this is also the national cry of even formal sector and businesses complaining in a report by the central bank to be receiving unskilled employees. According to Bank of Botswana’s recent Business Expectation Survey, unavailability of skilled labour was cited as the greatest challenge facing businesses in the fourth quarter of 2019, particularly in the manufacturing, trade, hotels, restaurants, transport and communications sectors3 , arising from the reported difficulties experienced in recruiting foreign skilled labour.

But do people go to school, get higher qualification and get easily hired? That is not the case in the national statistics as employers are mostly fishing in the less qualified pound. Higher education holders, higher certificates, diploma and degree holders are suffering to get jobs and it is recorded in the national statistics. Employment by education level shows that people who completed lower education or secondary school contributed 45.5 percent of the overall employment in the population.

Those who are regarded as fairly educated, the ones at university or tertiary level were at a lower percentage of the overall employment at only 15.9 percent. Primary qualifications holders were at 13.2 percent. Also when statistics reveals the issue from a sectorial perspective, the highest percentage (41.7 percent) of people in Formal Sector Employment have secondary school education. The statistics further states that these rates were followed by those with University and Primary school education with 21.5 and 10.6 percent respectively.

According to Statistics Botswana, a small percentage (0.5 percent) of people in Formal Sector Employment have apprenticeship. Statistics Botswana has shown in the same Q3 reports that youth not in education, not in employment or training rate increased by 4.7 percent.

According to Statistics Botswana, Formal Sector Employment by Industry shows that Public Administration had the largest portion of employment at 29.0 percent (140,280 persons), followed by Wholesale, Retail & Repair of Motor Vehicles with 13.5 percent (65,084 persons) and Education with 12.0 percent (58,034 persons) of total employment.

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Business

Banking on Your Terms: Exploring the World of Self-Service Banking

23rd February 2024

In today’s digital age, banking is no longer just about visiting a branch during business hours. It’s about putting you, the customer, in the driver’s seat of your financial journey. But what exactly is self-service banking, and how do you stand to benefit from it as a customer?

Self-service banking is all about giving you the power to manage your finances on your terms. Whether you want to check your account balance at midnight, transfer money while on vacation, or deposit cash without waiting in line, self-service banking makes it possible. It’s like having a virtual branch at your fingertips, ready to assist you 24/7.

This shift towards self-service banking was catalyzed by various factors but it became easily accessible and accepted during the COVID-19 pandemic. People of all ages found themselves turning to digital channels out of necessity, and they discovered the freedom and flexibility it offers.

Anyone with a bank account and access to the internet or a smartphone can now bank anywhere and anytime. Whether you’re a tech-savvy millennial or someone who’s less comfortable with technology, you as the customer have the opportunity to manage your finances independently through online banking portal or downloading your bank’s mobile app. These platforms are designed to be user-friendly, with features like biometric authentication to ensure your transactions are secure.

Speaking of security, you might wonder how safe self-service banking really is. Banks invest heavily in encryption and other security measures to protect your information. In addition to that, features like real-time fraud detection and AI-powered risk management add an extra layer of protection.

Now, you might be thinking, “What’s the catch? Does self-service banking come with a cost?” The good news is that for the most part, it’s free. Banks offer these digital services as part of their commitment to customer satisfaction. However, some transactions, like wire transfers or expedited bill payments, may incur a small service fee.

At Bank Gaborone, our electronic channels offer a plethora of services around the clock to cater to your banking requirements. This includes our Mobile App, which doesn’t require data access for Orange and Mascom users. We also have e-Pula Internet Banking portal, available at https://www.bankgaborone.co.bw as well as Tobetsa Mobile Banking which is accessible via *187*247#. Our ATMs also offer the flexibility of allowing you to deposit, withdraw cash, and more.

With self-service banking, you have the reins of your financial affairs, accessible from the comfort of your home, workplace, or while you’re on the move. So why wait? Take control of your finances today with self-service banking.

Duduetsang Chappelle-Molloy is Head: Marketing and Corporate Communication Services

 

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Business

Botswana records over P6 billion trade deficit

7th February 2024

Botswana has recently recorded a significant trade deficit of over P6 billion. This trade deficit, which occurred in November 2023, follows another deficit of P4.7 billion recorded in October of the same year. These figures, released by Statistics Botswana, highlight a decline in export revenues as the main cause of the trade deficit.

In November 2023, Botswana’s total export revenues amounted to P2.9 billion, a decrease of 24.3 percent from the previous month. Diamonds, a major contributor to Botswana’s exports, experienced a significant decline of 44.1 percent during this period. This decline in diamond exports played a significant role in the overall decrease in export revenues. However, diamonds still remained the leading export commodity group, contributing 44.2 percent to export revenues. Copper and Machinery & Electrical Equipment followed, contributing 25.8 percent and 10.1 percent, respectively.

Asia emerged as the leading export market for Botswana, receiving exports worth P1.18 billion in November 2023. The United Arab Emirates, China, and Hong Kong were the top destinations within Asia, receiving 18.6 percent, 14.2 percent, and 3.8 percent of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia.

The Southern African Customs Union (SACU) received Botswana’s exports worth P685.7 million, with South Africa being the main recipient within SACU. The European Union (EU) received exports worth P463.2 million, primarily through Belgium. Australia received exports worth P290 million, while the United States received exports valued at P69.6 million, mostly composed of diamonds.

On the import side, Botswana imported goods worth P9.5 billion in November 2023, representing an increase of 11.2 percent from the previous month. The increase in imports was mainly driven by a rise in Diamonds and Chemicals & Rubber Products imports. Diamonds contributed 23.3 percent to total imports, followed by Fuel and Food, Beverages & Tobacco at 19.4 percent and 15.0 percent, respectively.

The SACU region was the top supplier of imports to Botswana, accounting for 77.7 percent of total imports. South Africa contributed the largest share at 57.2 percent, followed by Namibia at 20.0 percent. Imports from Asia accounted for 9.8 percent of total imports, with Diamonds, Machinery & Electrical Equipment, and Chemicals & Rubber Products being the major commodity groups imported. The EU supplied Botswana with imports worth 3.2 percent of total imports, primarily in the form of Machinery & Electrical Equipment, Diamonds, and Chemicals & Rubber Products.

Botswana’s recent trade deficit of over P6 billion highlights a decline in export revenues, particularly in the diamond sector. While Asia remains the leading export market for Botswana, the country heavily relies on imports from the SACU region, particularly South Africa. Addressing the trade deficit will require diversification of export markets and sectors, as well as efforts to promote domestic industries and reduce reliance on imports.

 

 

 

 

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Business

Business sector optimistic about 2024

7th February 2024

The business sector in Botswana is optimistic about the year 2024, according to a recent survey conducted by the Bank of Botswana (BoB). The survey collected information from businesses in various sectors, including agriculture, mining, manufacturing, construction, and finance, among others. The results of the survey indicate that businesses expect trading conditions to improve in the first quarter of 2024 and remain favorable throughout the year.

The researchers found that firms anticipate improvements in investment, profitability, and goods and services exported in the fourth quarter of 2023 compared to the previous quarter. These expectations, combined with anticipated growth in all sectors except construction and real estate, contribute to the overall confidence in business conditions. Furthermore, businesses expect further improvements in the first quarter of 2024 and throughout the entire year.

Confidence among domestic market-oriented firms may decline slightly in the first quarter of 2024, but overall optimism is expected to improve throughout the year, consistent with the anticipated domestic economic recovery. Firms in sectors such as mining, retail, accommodation, transport, manufacturing, agriculture, and finance are driving this confidence. Export-oriented firms also show increased optimism in the first quarter of 2024 and for the entire year.

All sectors, except agriculture, which remains neutral, are optimistic about the first quarter of 2024 and the year ending in December 2024. This optimism is likely supported by government interventions to support economic activity, including the two-year Transitional National Development Plan (TNDP) and reforms aimed at improving the business environment. The anticipated improvement in profitability, goods and services exported, and business investment further contributes to the positive outlook.

Firms expect lending rates and borrowing volumes to increase in the 12-month period ending in December 2024. This increase in borrowing is consistent with the expected rise in investment, inventories, and goods and services exported. Firms anticipate that domestic economic performance will improve during this period. Domestic-oriented firms perceive access to credit from commercial banks in Botswana to be relaxed, while export-oriented firms prefer to borrow from South Africa.

During the fourth quarter of 2023, firms faced high cost pressures due to increased input costs, such as materials, utilities, and transport, resulting from supply constraints related to conflicts in Ukraine-Russia and Israel-Hamas. According to the survey report, the firms noted that cost pressures during the fourth quarter of 2023 were high, mainly attributable to increase in some input costs, such as materials, utilities, and transport arising from supply constraints related to the Ukraine-Russia and Israel-Hamas wars. “However, firms’ expectations about domestic inflation decreased, compared to the previous survey, and have remained within the Bank’s 3 – 6 percent objective range, averaging 5.4 percent for 2023 and 5.4 percent for 2024. This suggests that inflation expectations are well anchored, which is good for maintenance of price stability,” reads the survey report in part.

However, firms’ expectations about domestic inflation decreased compared to the previous survey, and inflation expectations remained within the Bank’s objective range of 3-6 percent. This suggests that inflation expectations are well anchored, which is beneficial for maintaining price stability.

In terms of challenges, most firms in the retail, accommodation, transport, manufacturing, construction, and finance sectors considered the exchange rate of the Pula to be unfavorable to their business operations. This is mainly because these firms import raw materials from South Africa and would prefer a stronger Pula against the South African rand. Additionally, firms in the retail, accommodation, transport, and mining sectors cited other challenges, including supply constraints from conflicts in Russia-Ukraine and Israel-Hamas, as well as new citizen economic empowerment policies that some firms considered unfavorable to foreign direct investment.

On the positive side, firms highlighted factors such as adequate water and electricity supply, a favorable political climate, an effective regulatory framework, the availability of skilled labor, and domestic and international demand as supportive to doing business in Botswana during the fourth quarter of 2023.

Overall, the business sector in Botswana is optimistic about the year 2024. The anticipated improvements in trading conditions, supported by government interventions and reforms, are expected to drive growth and profitability in various sectors. While challenges exist, businesses remain confident in the potential for economic recovery and expansion.

 

 

 

 

 

 

 

 

 

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