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.
Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.
In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.
The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.
With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.
Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.
BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.
During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.
BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.
As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.
In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.
BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.
The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.
BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.
Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.
According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).
With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.
In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.
Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.
The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.
The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.
The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.
In the latest June 2022 global economic prospects, released last week the World Bank has warned that low global economic growth and economic activity in global commodity markets such as China and Europe could negatively affect export revenues for Botswana and other Sub Saharan countries.
Recent data from Statistics Botswana show that Botswana’s exports destined to the global markets such as Asia and the European Union (EU) on monthly basis accounts for around 60.1 percent and 20.1 percent respectively.
The World Bank last week lowered its 2022 projections of global economic growth and indicated that the new forecasts could be bad news for countries like Botswana who are dependent on export mineral revenues. The Bank noted that just over two years after COVID-19 caused the deepest global recession since World War II, the world economy is again in danger and stated that this time it is facing high inflation and slow growth at the same time.
In the recent June projections, the bank lowered its forecast of global economic growth from the January 4.1 percent to 2.1 percent. “Our June forecasts reflect a sizable downgrade to the outlook: global growth is expected to slow sharply from 5.7 percent in 2021 to 2.9 percent this year. This also reflects a nearly one-third cut to our January 2022 forecast for this year of 4.1 percent,” a team of World Bank economists noted in the June 2022 Global Economic Prospects.
The World Bank indicated that exports from Botswana and other Sub Saharan countries could suffer from a substantial deceleration of activity in China and Europe. The Bank noted that exporters of industrial metals, crude oil, and ores such as Angola, Democratic Republic of Congo, Republic of Congo, South Africa, and Zambia could suffer from a substantial deceleration of activity in China.
On the other hand a sharp contraction of growth in the euro area could hurt exporters of agricultural products such as beef, coffee, tea, tobacco, cotton, and textiles from Botswana, Ethiopia, Madagascar and Malawi. “The faster-than-expected deceleration of the global economy and increased volatility of commodity prices could hurt many SSA commodity exporters,” said World Bank President David Malpass.
Malpass indicated that subdued growth in the global markets for Botswana and other Sub Saharan exports will likely persist throughout the decade because of weak investment in most of the world.
He noted that with inflation now running at multi-decade highs in many countries and supply expected to grow slowly, inflation could remain higher for longer than currently anticipated. “Even if a global recession is averted, the pain of stagflation could persist for several years— unless major supply increases are set in motion. Amid the war in Ukraine, surging inflation, and rising interest rates, global economic growth is expected to slump in 2022. Several years of above-average inflation and below-average growth are now likely,” said Malpass.