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Local economy can’t create 2000 jobs a year

Public Service salaries suffocate developments

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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. 

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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Business

Lack of certifcates plague SME’s

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Lack of certifcates plague SME’s

Majority of local SMEs not certified to International quality and standards

Botswana’s Small Medium Enterprises (SMEs) have been found lacking when it comes to quality performance.

A study conducted by the International Trade Centre (ITC) in partnership with Local Enterprise Authority (LEA) on 616 local SMEs, discovered only a small number are certified.

The study, whose results were released this week, further scored the majority of SMEs low in terms of meeting quality requirements for buyers.

Indeed, 77 percent of the firms surveyed indicated they are not certified to any quality, sustainability or other standard.

The majority of those certified are reported to hold schemes such as International Safety Certificates offered by Botswana Bureau of Standards (BOBS). Others hold certificates such as the Public Procurement and Asset Disposal Board (PPADB) Certificates and Horticultural Guidelines.

In terms of sectors, certification is much higher in the services sector compared to the agricultural sector.

This trend is reportedly in contrast with other countries, where certification is generally more widespread among agricultural companies.

The report found that just five percent of the interviewed agricultural enterprises were certified to international quality, safety and sustainability standards. This is said to be enough evidence to prove that Botswana farms lack the certificates increasingly required by international buyers.

Furthermore, the report states that importers of Botswana beef may prefer quality characteristics that differ from Batswana preferences such as meat tenderness, storage and safety procedures, packaging and certification.

Farmers who were interviewed for the survey reportedly indicated that water shortages prevented them from being able to meet the quality required by the market.

However, although few local firms are certified, it is believed they maybe following quality practices and communicating them to buyers in other ways.

“Some 70 percent of surveyed firms said they produced according to buyer requirements. This indicates that buyers are telling their Botswana suppliers about their market requirements, and Botswana companies are adjusting their production processes accordingly,” the report says.

This is backed up by the fact that 62 percent of the interviewed companies said they compete primarily by offering high quality products and services.

The report further notes that although most firms are seemingly aware of the quality requirements of the market and are thought to be responding to the current buyers’ requirements, their failure to adopt certification schemes means most are not signaling their quality to potential new buyers.

In light of this, the report by ITC, which is a joint agency of the World Trade Organization (WTO) and United Nations, says support for certification could help improve the quality competitiveness of Botswana SMEs for international trade.

Email:kabelo@thevoicebw.com
Twitter:@Kabelo_Adamson

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Business

BDC registers P277 million in profits

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BDC registers P277 million in profits

Government investment arm, Botswana Development Corporation (BDC) has announced a 40 percent increase in profits.

Presenting the financial performance to stakeholders recently, the Corporation’s Acting Managing Director, MoatlhodiLakaukau revealed the bulk of the P277 millionprofit came from interest income.

He explainedthis reflectsa positive shift in asset structure, from equity-based assets to more debt-based assets.

In yet another milestone, BDC saw its net worth grow by P700 million to reach P2.1 billion for the first time in 49 years.

Both the Corporation’s total assets and net worth recorded a 12 percent year-on-year growth, primarily due to an increase in investment assets.

During the 2019 financial year, BDC disbursed a total of P742 million to new project venturing, beating the P704 million the corporation had targeted.

During the same period, BDC concluded the first major international transaction, while 1, 700 jobs were reportedly created.

Lekaukau, who was appointed the Acting MD early this year following the departure of BashiGaetsaloe, says BDC will continue to explore both the local and international markets to facilitate requisite long-term funding requirements and strategic targets.

The corporation says its strategic ambition is to explore ventures which further build and enhance Botswana industries that transform the economy and make high returns contributing towards the country’s Vision 2036 ambition ofrealising a high-income status.

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Business

Surviving on the streets of Maun

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Surviving on the streets of Maun

Making Ends Meet

As the economy sags with the decreasing number of tourists in Maun due to the long dry spell, hawkers and street vendors are feeling the pinch.

Taking to the streets of this tourist town, which is a gateway to the Okavango Delta, Voice Money finds out how the ordinary Ngamilander battles on a daily basis to keep bread on the table.

On a ‘very good day’, all five vendors say they can make up to P500.

Surviving on the streets of Maun
THEBES FOR MY TSWII: Ngongorego Kapwe

I am in the business of selling twii, a native food of people living in the north western parts of Botswana.

I started my business in 2013 and I have been able to sustain myself since then.

Despite being able to make ends meet, the business is not as profitable as before.

Since the river dried up I now buy tswii from Shakawe unlike before where I went into the river to harvest it myself.

Tswii together with Mapakiwa are my means of putting food on the table!

Surviving on the streets of Maun
CRAFTING A LIVING: Kurika Diakuwa

I make a living from selling Art crafts. I started the business in 2016, taking over from my parents.

Most of the crafts that I sell are handmade by my wife and I.

I have been able to sustain myself and my family through this business.

The only challenge is that there is no proper wood for carving in Maun so I travel to my home village, Etsha 6, to get the raw material which is costly.

Recently, the business has not been doing that well due to the decline in the number of tourists in the area.

The main target market of my business is tourists since local people are hardly interested.

Surviving on the streets of Maun
GOLDEN OLDIE: Josephine Nlhabano

Rather than staying at home doing nothing, as an old age pensioner I believe self-sufficiency is key.

I originate from Mabudzwane village near Francistown and make a living out of dress-making.

I have been in the business since 1995 and I was able to send my kids to school and sustain myself as well as the business.

I buy cloth and sew dresses to sell.

My only challenge is that some dresses can take a long time in the stall without a buyer.

Surviving on the streets of Maun
DREAM TEAM: Livefon Maphindu and Adrien Moyo

We are partners. The two of us are in the art crafts business.

We do batik, screen panting, potato printing, metal works and wood curving to mention a few.

We started operating in 2003 and according to us the business is not doing well like previous years.

We believe that the decline in the number of tourists is the cause of our ordeal.

Ever since the river dried up, the number of tourists dropped due to the fact that attractions like boat cruising, mokoro riding, fishing and others have been halted.

We are, however, hopeful that things will get better in the festive season as some people will be coming over for their holidays.

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