Economist shoots down UDC's ambitious targets
Chakalisa Dube | Friday April 26, 2019 13:02
The UDC, a combined opposition is expected to give the BDP strong competition at the 2019 general elections. Its campaign message revolves around employment creation and economic empowerment of Batswana. The UDC has also pledged to increase the minimum wage to P3,000 in order for it to tally with the cost of living among Batswana. The party has said that this will also be done within the first 12 months of its new government post October 2019 elections something which has been dismissed by the local economist.
In response to the UDC’s ambitious targets, Dr Keith Jefferies former academic and deputy Governor of the Bank of Botswana said that the party should forget about attaining that target owing to the country’s current economic status. Jefferies is also the founder of Econsult Botswana, a company that specialises in research, economic commentary and policy-related analysis in a variety of fields. “In the short term it is not realistic to create 100,000 jobs. That is if we are talking about productive and competitive jobs. On the other hand, if we are talking about creating a sizeable number of jobs in the public sector it is not possible because the government budget will be stretched beyond limit,” he said. He added, “The formal private sector currently employs around 200,000 people, which is why I believe it is not realistic to create an additional 100,000 or a sizeable number of jobs in the short term”. “It (the country’s private sector) does not have the capacity to directly and indirectly create 100,000 jobs or a very sizeable number of jobs in 12 months,” he explained. The renowned economist further warned that should the minimum wage be pushed to P3,000 in 12 months it would lead to a rise in unemployment and other firms closing. “Not many firms in Botswana can afford the P3,000 proposed by the UDC. We are likely to see those that will not afford the prescribed minimum wage closing down. Some firms might even dramatically shed jobs in a bid to afford the minimum wage. This will lead to a rise in unemployment,” he said.
However Jefferies said that the UDC’s ambitious targets (on the minimum wage and creating 100,000 jobs) could only be fully achieved in the medium to long-term. “If the targets are for medium to long term they can be achieved because there will be sufficient time for planning and putting structures in place for various sectors of the economy to support such ambitions. It will not be easy to implement radical economic transitional reforms just after obtaining power,” he said.
Many critics have also in the past warned that it will not be easy for the UDC to create 100,000 jobs in 12 months, as it will take time to stymie some existing unproductive economic programmes before introducing new ones deemed to be effective.
Still, the UDC believes that creating 100,000 jobs is a modest and achievable number. Its president Duma Boko has argued that the 100,000-job creation does not only talk about formal employment.
According to him it means allowing the informal sector to grow by removing unnecessary regulatory barriers to make doing business easy, adding that this would be inclusive as everyone would be participating in the realisation of creating the 100,000 jobs.
The Alliance for Progressives (AP), which will be participating in the general elections for the first time, has pledged to reduce unemployment from 20% to 10% in six years if it is elected into power. The party also said its aim is to double the country’s economic growth to 10% per annum after taking power.
The party has also said that it will use research to revise and implement the minimum wage. The party said that it do not want a blanket figure (as minimum wage) that covers all sectors. It noted that a blanket figure could kill small medium enterprises that are mostly owned by Batswana. However, it is the UDC that stirred much debate with its 12 months timeframe for achieving its target on employment creation and revising the minimum wage.