While various arguments have been advanced to explain rising unemployment figures, bad policies by the government have been identified as the major catalyst.
Analysing Covid-19, informal sector and unemployment on the recent Stanbic Bank Quarterly Economic Review, Dr. Onkokame Mothobi of the Department of Economics at the University of Botswana said the current evidence shows that youth unemployment is the outcome of bad policies.
“Several researchers have previously attributed the high unemployment among the youth to economy failure to generate jobs while some have argued that the youth have no job experience,’ said Dr. Mothobi.
However, Dr. Mothobi went on to note that despite clear evidence from recent economic growth patterns, which shows that the economy is not generating enough jobs to cater to the expanding number of people entering the labour market, policymakers have totally forgotten the informal sector.
This is despite the sector generating income for day-to-day consumption of the majority of the unemployed youths in Botswana, he explained.
Estimates from the International Labour Organisation (ILO) have suggested that as of April 2020, earnings in the informal sector declined by 60 percent, Dr. Mothobi noted.
“Despite Botswana slowly reopening the economy, most of the economic activities that support the informal sector have remained restricted since the initial lockdown, leaving the majority of those who are in the sector with no or less income,” said Dr. Mothibi, adding that even when policies to mitigate the effects of COVID-19 are developed; the informal sector in Botswana is largely overlooked.
According to Dr. Mothobi, the data gathered from the National SMME registration exercise has suggested that over half of the businesses in the informal sector recorded zero revenue during lockdowns with a quarter earning less than P1000 a month.
“The COVID-19 economic shocks, which include closure and reduced economic activities among sectors that support the informal sector has increased the informal sector vulnerability, extending it beyond the traditional youth entrepreneurs to include older economic participants,” explained the UB lecturer.
As a segment, Mothobi says the youth has experienced several economic hardships over the years from the inability of the economy to generate jobs even before the 2008/2009 global financial crisis.