DISCUSS THE NATURE AND MAGNITUDE OF PROBLEMOF UNEMPOYMENT IN BOSTWANA.ANALSE THE POSSIBLE SOLUTIONS TO REDUCE UNEMPLOYMENT IN BOTSWANA
ECO 463 TERM PAPER
06770076Student NAMES AND ID’S:
MERLYN PAULINE TUMISANG
(TEAM LEADER) CELL:77036018
TAWANA PRECIOUS MASENA
LECTURER: DR MOTLALENG
SUBMISSION DATE: 15 NOVEMBER 2018
00Student NAMES AND ID’S:
MERLYN PAULINE TUMISANG
(TEAM LEADER) CELL:77036018
TAWANA PRECIOUS MASENA
LECTURER: DR MOTLALENG
SUBMISSION DATE: 15 NOVEMBER 2018
The research is made to understand the nature and magnitude of unemployment in Botswana together with possible solutions to reduce unemployment in Botswana. The research is considered important in the present context of stubbornly high unemployment in Botswana. The paper further indicated that unemployment in Botswana is largely structural and that the high unemployment rate is attributed to the youth and gender wise females exhibit higher rates. The paper also looks at possible ways to reduce unemployment; some of the possible measures mentioned in the paper include review of the retirement age and encouraging entrepreneurship training particularly for the youth.
Botswana is a success story in terms of economic growth. This is characterised by rapid GDP growth making the country one of the fastest growing economies in the world (Hope S. K., 1996) coupled with transformation from an Agriculture led economy and high reliance on foreign aid at the time of independence to a mineral export led economy with barely significant to government budget (Lewin, 2011). Botswana also boasts of general growth in social welfare making significant progress in health, education and infrastructure development. Despite resource risk, good governance and prudent policies have been key maintaining stability and staying clear of adverse effects of the resource curse. (Barclay, 2009).
However despite this fascinating growth Botswana troubling concerns in the form of high poverty, distorted income distribution and unemployment with the latter being the lead anchor on which the other problems lie. (Kemiso & Kolawole, 2017). (Ajilore & Yinusa, 2011) considers the growth to be “jobless growth”, where even with sufficient growth, unemployment remains obstinately high. This hindrance to economic development is a great concern that threatens the success of this nation. First we shall address the nature and the magnitude of unemployment along with what the opinions of different scholars. Analysis of the possible solutions will follow and lastly the conclusion.
REVIEW OF LITERATURE
NATURE AND MAGNITUDE OF UNEMPLOYMENT
This paper will define unemployment as individuals aged 15 and above and actively seeking employment as per described by (Statistics Botswana, 2017).
In 2015/16, (Statistics Botswana, 2017) estimated unemployment rate at 17.7% with female and male unemployment standing at 19.1% and 16.3% respectively. Youth unemployment rate was at 25.2% with female and male youth estimated at 26.9% and 23.6% respectively. The most affected class according to training or education level was of persons with Junior Secondary School Certificate at 39.4% closely followed by that of Senior Secondary Education at 22.8%. Unemployment in University level individual was estimated at 11.4%. The survey highlights that at each level, unemployment rate was higher for females than it was for males. Finally, (Malema, 2015) estimates the unemployment rate to have higher prevalence in rural areas 78.47% than in the urban areas 21.53% with the participation by either male or female split near even in rural areas and higher for women in urban areas than for men.
During the early 1980’s, the unemployment rate has fluctuated between 10% and 25% and declined through the late 80’s to 13.9% in 1991 before a general rise to 21% by 1994 (Hope, 1996), (Siphambe, 2003), (Malema, 2015). From 2000, unemployment rate fluctuated steadily between a low of 17% to a high of 26% through to the year 2015/16 (Statistics Botswana, 2017).
From the data, Batswana men are more educated than the females. Despite similar unemployment rates, there is higher unemployment for females with Secondary School qualification or higher hence females face certain degree of barrier to labour force entry. More so that even in the women that are employed, there is less representation of them in the formal sector unlike in the informal sector (Hope, 1996). (Siphambe, 2003) produces a probit analysis that supports this and determines that Botswana’s Labour market is less likely to employ women than men and attributes to prior occupational segregation. This supposedly leaves very little for the market to offer in terms of ‘women jobs’.
The transformation that saw migration of majority of labour force move from rural sub agricultural sector led to a decline in the sector employment. (Siphambe, 2003) considers this unemployment could have been ZERO had the migration not taken place. However (Malema, 2015) counters that “this belief defies all manner of economic understanding and is not in consonance with the dynamics of economic progress.” Rapid economic growth did not ensure a lower unemployment rate, but that this decline in the traditional agriculture sector had but adverse consequences both in terms of income generation and job creation (Jefferis ; Kelly, 2007).
In addition, Labour market problems in Botswana lie beyond open unemployment; underemployment also plays a significant role in worsening the problem. The 1995/96 Labours Survey describes underemployment as work that is put in by individuals that amounts to less than 35 hours in the reference survey week for an economic reasons (Siphambe, 2003). This is supported by (World Bank, 2015) which expresses concern over the level of underemployment lack of quality jobs in the informal sector and (Kuhlmann, 2018) who speak on the challenges faced by Batswana youth in attempts to find decent employment. Graduate underemployment and exploitation have surfaced as some key issues to the problem of unemployment (Mupedziswa, 2018)
(Kemiso ; Kolawole, 2017) focuses on youth underemployment as a major concern, Botswana comprises of a very youthful population and yet statistics indicate it is this youth is most emerged into unemployment. Major problems will arise should this zestful, “energetic but jobless youth” convert the positive energy to focus on illegitimate goods (Kemiso ; Kolawole, 2017).
The rural youth unemployment, which is mostly presents itself in the form of structural unemployment, and is also a serious issue since there are more people living in rural areas than in urban areas. Therefore there is particular necessity to place framework that encourages fluid participation of major stakeholders in rural development activities. (Kemiso ; Kolawole, 2017)
Some literatures identify the mismatch between demands and supply of labour markets. Limited scholarships and the actual teaching in schools may be the cause of widened gap between theoretical knowledge acquired and practical skill henceforth creating the large youth unemployment rate (Boikhutso ; Molosiwa, 2016). Another observation by (Benya, 2007) notes that universities fall short of imparting the necessary employability skills targeted to suite labour market requirements to school leavers rendering then inadequate for employment opportunities.
Literature goes on to distinguish between voluntary and involuntary unemployment, the former exits where individuals choose to decline most opportunities due to the exploitive or inadequate nature of the employment usually in the form of unreasonably low wages. Social welfare systems are readily accused of encouraging voluntary youth unemployment (Nthomang ; Diraditsile, 2016). Also, commonly resulting from the poor coordination between industries and universities, the latter occur where the able and qualified individuals fail to get jobs at prevailing wage rates (Jubenkanda, 2003). In other words, their skillset is not enough to earn them employment .ANALYSIS OF POSSIBLE SOLUTIONS
A variety of strategies have been devised to control unemployment across the world. The Youth Unemployment Insurance in Canada is remedy to the seasonal unemployment. It gives employers incentive to keep labour force employed in the face of temporary productive downturn and as such minimises a lot of recruiting and training costs that would ultimately come about should production return to normal. Another strategy is the provision of allowances to organisations that employ youth with no prior experience thus creating opportunities for fresh graduates.
Other countries have introduced wage subsidies of which some subsidise the payrolls where certain classes are targeted by the subsidy or by incentives to employers to hire more individuals in the form of tax rebates. These subsidies minimise costs to an employer while improving the wage an employee receives. They also encourage employers to employ individuals even when they lack required field experience, enabling them to acquire that skill (Mogomotsi ; Madigele, 2017).
Another suggested solution is the reconfiguration of the education system (Mogomotsi ; Madigele, 2017). This is intended to address the mismatch and bridge the gap between theoretical knowledge from school and training institutions and the practical skill required in the field. Specialised training programmes should be introduced in order to align skills in the labour force with demand in the labour market.
Some instruments have been formed locally to address the problem of unemployment locally. Youth Policy of 1996 (Revised 2010) aims to improve and strengthen network of institutions towards youth development, this policy was initiated to identify and target the special need of the unemployed and devise strategies and form programs to cater to them. The implementation of the revised policy is ongoing and has made huge strides in its funding objectives towards youth empowerment programmes however no results have yet been revised. (Nthomang ; Diraditsile, 2016).
The Youth Employment Scheme is another exciting initiative intended to aid youth to attain the necessary skill through mentorship to guide them into entrepreneurship success. The program also aims to expose the youth to practical skills through community development (Bakwena ; Sebudubudu, 2016). The Youth Development Fund looks encourage active involvement in socioeconomic development through generating sustainable yet competitive youth owned projects. Over 7300 projects have been funded since 2009. However the fund has yet been evaluated and its impact cannot be determined due to unavailability of data based on its results (Nthomang ; Diraditsile, 2016).
On the views of (Bogale, 2014) the unemployment problem in Botswana can be eradicated by entrepreneurship, as entrepreneurship allows for job creations and financial independence. Entrepreneurship is highly likely to produce best results for employment creation thus there is high need for development of entrepreneurship in Botswana especially among the youth, as this is highly like to enable the youth to break away from poverty. Bogale further encourages the government to incorporate entrepreneurship training in student syllabuses.
(Sechele, 2015) Made a suggestion that it is high time the retirement age is reviewed such that it is made earlier that it currently is. This will be a good initiative to curb unemployment as it will allow for sharing of rare job opportunities with the elders making way for the youth. This will assume perfect substitutability between the elderly and young workers. Furthermore (Mogomotsi G. E., 2017) brought forth a view that the government of Botswana should make the education curriculum in such a way that it allows for graduates to be exported into the global labour market especially in other African countries.
This paper noted that the nature of unemployment in Botswana is largely structural and that Botswana also experiences disguised unemployment. It further discussed the magnitude and dimensions of unemployment, where it made note that unemployment in Botswana is relatively high, with youth unemployment being the leading major national concern. It further made note of the imbalance in the unemployment rate among gender, it made mention that across most age groups females have higher unemployment rates.
It submitted possible ways that the government of Botswana should put into place in order to reduce the problem of unemployment. Ways brought forward include reviewing of the national retirement age; the retirement age should be reduced in order to allow for creation of vacancies for the young. The restructuring of study curriculums by government particularly in universities such they support international standards so that it allows for Batswana graduate to be absorbed in the international labour market. Furthermore the paper made note that government should encourage entrepreneurship particularly among the youth
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