COMMENTARY: Job creation should be an urgent national priority

SHARE   |   Monday, 09 May 2016   |   By Staff Writer
COMMENTARY: Job creation should be an urgent national priority

Though the year has started somewhat in a positive trajectory for diamond sales, nothing much has changed with regard to other commodity prices. The result has been the downgrading of Botswana’s economic outlook by Standard and Poor’s (S&P) Rating Services from stable to a negative. Though diamonds sales have been on a reasonable growth path from January to March, other commodities have continued to struggle, meaning that Botswana will take longer to recover from such. This is further explained by the ongoing retrenchments at the mines whose commodity prices are down. Copper and nickel being one of such, Botswana’s largest copper miner BCL is currently undertaking a retrenchment exercises that is expected to leave thousands jobless. Though unions are protesting the planned job cuts, it is unlikely that such will lead to the halting of the exercise. Mines have, simply, run out of alternatives. Local economists under the Econsult stable have equally decried that since the start of the year there have been more bad news for the economy than good ones.

Econsult acknowledges the effect of depressed commodity prices and even more worrying for them is that the rate of job creation is being overwhelmed the number of people entering the market every year. They are surprised that Government does not appear to have a plan of dealing with this surge in numbers of people looking for work. They argue that the 0.7 percent employment growth rate between 2013 and 2015 does not really translate into any telling job creation. According to the Econsult report, information from Statistics Botswana shows that 2,207 jobs were created between the two years whereas over that time there were probably over 40,000 net new entrants into the labour market from school and college leavers. “Given this dismal experience with job creation, it is surprising that government policy is not focused more on resolving the problems that lie behind lack of job creation,” they regret. It is of necessity that creation of sustainable employment becomes an immediate and urgent priority of Government.

Unless this is done, the country will continue to churn out unemployed youth from its education system which will ultimately lead to a surge in crime rate. Government should give a serious push to rebuilding the manufacturing sector from textile to various forms of production to absorb the different skills at its disposals. There are vast opportunities in this area particularly looking at the fact that the available AGOA market is far from being satisfied. In a disappointing case for Botswana while other countries like Lesotho have grown their profits from AGOA trade the country’s returns has been on constant decline since 2010 with profits have fallen from a high of USD70 million per annum in 2010/11 to just USD9 million in 2014. Since inception in May 2000, only one local company – Carapparel Botswana – has accessed AGOA, despite the availability of over 6 400 products for duty-free export to the US. Botswana exports to the US stood at $7.5 million in 2015, down from $9 million in 2014.

This is an indictment on Government which has to lead in ensuring sustainable job creation. Government must step up from its slumber and show demonstrated commitment to job creation. Though Government supported a Job Summit last year, the outcome of that is yet to be felt. Government should diversify economy and where possible instead of pursuing adoption of machinery in production, efforts must be placed on encouraging the employment of people.  We know as the economy transforms that more of our people are being pushed out of jobs by adoption of new technology. This should be done at the last resort and retrenchment in this kind of scenario should be discouraged as much as possible.