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Local economy can’t create 2000 jobs a year

Public Service salaries suffocate developments

FILE PIC: Low developments will result in an increase in poverty.

 

BAME PIET

Despite numerous initiatives put in place, the economy is struggling to create 2000 formal jobs a year and the trend started five years ago, and in some instances there was zero growth in job creation.

This is far below the approximately 20,000 graduates who enter the job market every year.

According to the National Development Plan 11 Mid Term Review draft document, job creation has been a challenge for a while.

“The growth rate of formal employment has been disappointing in recent years, with several years when growth has been barely above zero, and one year of negative growth following closure of the BCL mine. Over the five years from 2013 to 2018, the average annual growth rate of formal employment rate was less than 0.5 per cent a year,” says the draft document which was shared with the public last week. 

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However, the informal sector seems to be growing especially with the introduction of short term government interventions such as the Ipelegeng programme, household employment and subsistence farming.

The government has attributed the slow growth in formal employment to a sharp reduction of work permits for foreign investors and workers.

“This reflects the close positive relationship between immigration of workers with necessary skills and job creation for Batswana, and supports the long standing claim by the private sector that unduly restricting immigration has adverse implications for the economy and for jobs,” reads the document.

Meanwhile, it has also been established that salaries for civil servants are competing with development funding and that the latter is losing.

Initially, NDP 11 had projected a P122.1 billion expenditure on civil servants salaries but the figure has gone up to P150.5 billion due to public sector salaries increase.

“There are also large increases in grants and subventions (transfers to parastatals and local authorities, student bursaries). In order to contain total spending, this is offset to some projected development spending. The original NDP 11 development programme totalled P101.4 billion, this has now been cut P81.9 billion. Essentially, lower development spending is the price that has to be paid for higher public sector salaries,” the draft document says.

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