- 41.3% youth unemployed, not in school, not in training - Govt should make bold job projections – Prof Siphambe
The new Umbrella for Democratic Change (UDC) government, is a government at crossroads.
Its greatest challenge is to create a balance between fiscal tightening and business growth as demonstrated by increased taxes in the just-delivered budget speech, while at the same time promoting social protection for the most vulnerable in society.
Senior Portfolio Manager at 5th Quarter Investment Managers, Nlume Modise says the P22 million deficit is worrisome as it pits the new administration between a rock and a hard place to either increase revenue or decrease expenditure, as well as to borrow or tap into savings to keep the economy in motion.
“This is worrisome and cannot be maintained. It is not sustainable,” he said.
Modise said on Wednesday morning during the Business Botswana Post Budget Analysis that, that is why there is critical need for Botswana to broaden revenue by diversifying the economy.
His view is that the current threats remain; the continued challenges regarding diamond sales, government’s cash flow management practices that negatively affects, among others, Small, Medium Micro Enterprises through delayed payments for services rendered.
He is relieved however, that government is looking at addressing inefficiencies that have crippled service delivery. He is further pleased that government has expressed through Finance Minister Ndaba Gaolathe’s budget speech, the desire to address inefficiencies, and seem to know what to do.
However, what remains a major challenge is the “how” to achieve optimum performance of the economy. “Maybe with a fresh set of eyes and energy, we will see some delivery,” Modise said.
Professor of Economics at the University of Botswana, Prof Happy Siphambe echoes the same “how” as Modise. He says currently, the labour market is characterised by low labour demand, low labour productivity and poor work ethic, as well as challenges on the supply side.
Critical figures remain a thorn - unemployment now reaches heights of 27.6 percent for more than 15 years, and extended unemployment is at 32 percent. The most-scary statistic, according to Prof, is that of Youth Not In Employment, Not in Education, Not in Training, which is estimated to be at 41.3 percent.
“This basically says we have young people who are not employed, not in school and not trained. It is everybody’s guess what these young people are doing!” Dr Siphambe says.
The other major statistic that is often not reported is the under employed. According to Prof Siphambe, there is a lot of under employment of approximately eight percent in the labour force.
“This is the grim picture that the new government finds itself in, coming into the budget with an economy that is not growing as fast as it used to do in the past.
“In fact, the new administration is projecting a recovery economy, coming from an economy that was in a recession, cannot be easy.”
He believes that though the Finance Minister’s proposals, are looking very optimistic, the big thing that is missing is the “how.” The “what” and the “why” look like they are in the right direction, although there is still a lot of structural planning to be done.
In terms of employment proposals, Prof Siphambe is happy that some sectors are clearly articulated as those that will produce the much-needed jobs. For example, Minister Gaolathe stated that the expansion of the Khoemacua copper mine in the North West District, is estimated to increase the labour force from the current 2000 jobs to 4000 jobs.
Another, is the Menzi Battery Metals which has been granted a mining licence to exploit battery grade Manganese at Kgwakgwe Hills near Kanye. The project is expected to employ 300 people. In addition, the Selebi Phikwe Citrus project is projected to raise employment levels from the current 294 to 600 employees.
Prof Siphambe said all in all, the budget speech was a continuation of the past in terms of how the labour market is treated.
“We anticipate that somehow jobs will emanate from what we are proposing, without necessarily saying how many jobs we want to create and by when.
“One would have expected the UDC government to take that line because in their Manifesto, they put targets already, to say we will create 4000, 5000 jobs in five years.
“And you expect them to explain how they will achieve this. For example, how many of the 4000/5000 jobs they will create in the first year,” Prof Siphambe said, adding that the budget speech was largely the usual talking.
“We are very comfortable talking about what is going to happen in the output market, major projections about growth, and about inflation.
“Let us not shy away from making bold projections about employment,” he emphasises. This, he believes will get government to be intentional about creating jobs.
Prof Siphambe strongly believes that without targets, a lot will not be achieved. He has also observed that jobs are likely to come from mega projects, digital space, reforms in Agriculture, hemp production, reforms in doing business-though not new, incentives and subsidies.
“Generally, there is an affirmation that jobs will be created in the private sector, as well as from development budget that is huge especially on infrastructure”.
According to Prof Siphambe, the budget continues to prioritise human capital development. He said one issue that is clearly articulated in the budget is the focus on TVET to make it more attractive and appealing to young people.
However, what is missing is information on whether the current government has done their homework to find out what the major problem is with TVET.
“We currently have a lot of TVET graduates that are unemployed. You can’t without doing any changes just pour in resources. Are there any jobs that should absorb them, what are we doing in terms of improving quality?”
He also worries about the labour market information system housed in the Human Resource Development Council (HRDC), which should be linking those who are looking for jobs and those looking for workers, however, it is not working as it should.
He attributes the system’s failure to the fact that people look for jobs in other ways, but not though the labour market information system.
“These should be looked into to make the labour market much more efficient, just like we do with other markets.”
Its greatest challenge is to create a balance between fiscal tightening and business growth as demonstrated by increased taxes in the just-delivered budget speech, while at the same time promoting social protection for the most vulnerable in society.
Senior Portfolio Manager at 5th Quarter Investment Managers, Nlume Modise says the P22 million deficit is worrisome as it pits the new administration between a rock and a hard place to either increase revenue or decrease expenditure, as well as to borrow or tap into savings to keep the economy in motion.
“This is worrisome and cannot be maintained. It is not sustainable,” he said.
Modise said on Wednesday morning during the Business Botswana Post Budget Analysis that, that is why there is critical need for Botswana to broaden revenue by diversifying the economy.
His view is that the current threats remain; the continued challenges regarding diamond sales, government’s cash flow management practices that negatively affects, among others, Small, Medium Micro Enterprises through delayed payments for services rendered.
He is relieved however, that government is looking at addressing inefficiencies that have crippled service delivery. He is further pleased that government has expressed through Finance Minister Ndaba Gaolathe’s budget speech, the desire to address inefficiencies, and seem to know what to do.
However, what remains a major challenge is the “how” to achieve optimum performance of the economy. “Maybe with a fresh set of eyes and energy, we will see some delivery,” Modise said.
Professor of Economics at the University of Botswana, Prof Happy Siphambe echoes the same “how” as Modise. He says currently, the labour market is characterised by low labour demand, low labour productivity and poor work ethic, as well as challenges on the supply side.
Critical figures remain a thorn - unemployment now reaches heights of 27.6 percent for more than 15 years, and extended unemployment is at 32 percent. The most-scary statistic, according to Prof, is that of Youth Not In Employment, Not in Education, Not in Training, which is estimated to be at 41.3 percent.
“This basically says we have young people who are not employed, not in school and not trained. It is everybody’s guess what these young people are doing!” Dr Siphambe says.
The other major statistic that is often not reported is the under employed. According to Prof Siphambe, there is a lot of under employment of approximately eight percent in the labour force.
“This is the grim picture that the new government finds itself in, coming into the budget with an economy that is not growing as fast as it used to do in the past.
“In fact, the new administration is projecting a recovery economy, coming from an economy that was in a recession, cannot be easy.”
He believes that though the Finance Minister’s proposals, are looking very optimistic, the big thing that is missing is the “how.” The “what” and the “why” look like they are in the right direction, although there is still a lot of structural planning to be done.
In terms of employment proposals, Prof Siphambe is happy that some sectors are clearly articulated as those that will produce the much-needed jobs. For example, Minister Gaolathe stated that the expansion of the Khoemacua copper mine in the North West District, is estimated to increase the labour force from the current 2000 jobs to 4000 jobs.
Another, is the Menzi Battery Metals which has been granted a mining licence to exploit battery grade Manganese at Kgwakgwe Hills near Kanye. The project is expected to employ 300 people. In addition, the Selebi Phikwe Citrus project is projected to raise employment levels from the current 294 to 600 employees.
Prof Siphambe said all in all, the budget speech was a continuation of the past in terms of how the labour market is treated.
“We anticipate that somehow jobs will emanate from what we are proposing, without necessarily saying how many jobs we want to create and by when.
“One would have expected the UDC government to take that line because in their Manifesto, they put targets already, to say we will create 4000, 5000 jobs in five years.
“And you expect them to explain how they will achieve this. For example, how many of the 4000/5000 jobs they will create in the first year,” Prof Siphambe said, adding that the budget speech was largely the usual talking.
“We are very comfortable talking about what is going to happen in the output market, major projections about growth, and about inflation.
“Let us not shy away from making bold projections about employment,” he emphasises. This, he believes will get government to be intentional about creating jobs.
Prof Siphambe strongly believes that without targets, a lot will not be achieved. He has also observed that jobs are likely to come from mega projects, digital space, reforms in Agriculture, hemp production, reforms in doing business-though not new, incentives and subsidies.
“Generally, there is an affirmation that jobs will be created in the private sector, as well as from development budget that is huge especially on infrastructure”.
According to Prof Siphambe, the budget continues to prioritise human capital development. He said one issue that is clearly articulated in the budget is the focus on TVET to make it more attractive and appealing to young people.
However, what is missing is information on whether the current government has done their homework to find out what the major problem is with TVET.
“We currently have a lot of TVET graduates that are unemployed. You can’t without doing any changes just pour in resources. Are there any jobs that should absorb them, what are we doing in terms of improving quality?”
He also worries about the labour market information system housed in the Human Resource Development Council (HRDC), which should be linking those who are looking for jobs and those looking for workers, however, it is not working as it should.
He attributes the system’s failure to the fact that people look for jobs in other ways, but not though the labour market information system.
“These should be looked into to make the labour market much more efficient, just like we do with other markets.”
