Inequality defines Botswana

Staff Writer
Various studies have shown that Botswana is one of the most unequal countries in the world. For instance, two such studies are the Mid-Term Review of National Development Plan (NDP) 10 Draft Report and the International Monetary Fund (IMF) Country Report on Botswana.

Both recently released, the reports are in agreement that unless the gap between Botswana's rich and poor is addressed, the national goal of ending poverty will remain a mirage. The government announcement last week that it will award a three percent salary adjustment to public servants who fall outside the bargaining process is not likely to change the situation.

At present, the highest paid senior public servant is the Permanent Secretary to the President (PSP), Eric Molale, who earns P47,380 per month. With the three percent increase, Molale will earn about P48,801.40. Permanent Secretaries currently earn P41,200 per month. With the three percent salary increase, they will smile all the way to the bank to rake in P42,436.

This is in contrast to what the lowest paid public workers are remunerated. If these workers are lucky to get the three percent, they will have only P41 more than what they have been earning. At present, these workers earn about P1,351.67. With the increment, their earnings will total P1,392.67.

However, all these public service remunerations are a joke compared to what chief executive officers (CEOs) are earning in the private sector and parastatals. A look at one parastatal that is subject to government remuneration reveals nothing short of a bed of roses.

This is because the government has given parastatals more flexibility in determining remuneration levels, especially after the adoption of the Revised Incomes Policy.  In order to comply with the provisions of the Revised Incomes Policy, the CEO of the National Development Bank earns about P1,172.608 per annum or about P97,717.333 per month. However, according to a Job Evaluation and Remuneration Review that was conducted by a human resources consultancy, as a state owned enterprise, NDB cannot compete with commercial banks at management level, nor can it pay the level of bonuses which accrue to top executives in the financial sector.

It was

reported earlier this year that two executive directors at Choppies earned P11 million while former president Festus Mogae - who is the company's chairman and non-executive director - pocketed half a million Pula in salaries and bonuses for the year ended June 30, 2011.

The company's prospectus showed that the deputy chairperson of the Choppies Group, Farouk Ismail, raked in P5,057,000 in salaries and bonuses and a further P628,000 in benefits and bonuses, all of which total P5,685,000. Choppies director Ramachandran Ottaphathu pocketed P5,354,000 while former president Mogae was paid P529,000 in what is characterised as fees. This must be the basis for the IMF Country Report on Botswana's conclusion that poverty and inequality remain high. The shortcomings of the country's labour market policies are evident in the current unemployment rate of 18 percent.

"Botswana's income inequality, with a Gini Index in excess of 0.5, is one of the highest in the world, especially when compared with other high middle-income countries. Despite a sharp decline in poverty, income inequality remains high in Botswana," says the report.

It quotes the latest two Household Income and Expenditure Surveys (HIES) that said Botswana's Gini coefficient was 0.54 in 1985/86 and 0.61 in 1993/94, placing the country among the highest levels of inequality in sub-Saharan Africa and in the world, along with a few countries in Latin America.

Meanwhile, the government's Mid-Term Review says Botswana continues to face challenges of high and persistent levels of unemployment, particularly amongst the youth. The review says this is mainly the result of an increasing labour force against few employment opportunities being created in the economy.

According to the Botswana Core Welfare Indicators (Poverty) Survey (BCWIS) of 2009/10 that was released in December 2011, the overall unemployment rate was estimated at 17.8 percent of the total labour force, compared with 17.5 percent recorded by a 2005/06 Labour Force Survey.



One million Pula for toilet? Are you crazy?

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