More economic woes in Botswana

…should government fails to take advantage of bulging workforce-Study

A recent study by the World Bank has warned that Botswana could find itself in a vicious cycle of low economic growth and poverty if government does not change its policies to take advantage of the projected bulging working-age population in the country.
Statistics show that the working-age population in Botswana is increasing and is projected to have expanded by 29 percent between now and 2050 due to changes in the structure of the population.
In a new study the World Bank has revealed that while the increase in working-age population in Botswana is inevitable, a positive dividend from it is not and recommended that the country will have to act now and implement key policy reforms to allow current and future generations to harness the bulging workforce.
The study has raised concerns that Botswana’s economy is not taking advantage of the growing workforce and noted that other countries’ experience has shown that, if productively employed, a large workforce can trigger an increase in GDP and output per capita. “The realization of GDP growth and increase per capita requires that people of working age find jobs. Botswana’s economic strategy, however, does not currently rely on labor as the main factor of production. Thus, the potential gains from the demographic opportunity can be severely constrained, as the link between GDP growth and employment is weak. Given the current economic structure and limited employment opportunities, the bulging workforce alone will likely add little to growth.”
According to the study, Botswana and other countries in the region need to rebalance social assistance policies and programs. The study stated that Botswana and other countries in the region have generous and comprehensive social assistance systems and fiscal resources allocated to these programs are high in comparison with most emerging economies. “Social assistance is heavily geared towards supporting the elderly: For example resources per individual in the 65- plus age group are four and a half times higher than those available to people aged 0-19 in Botswana. The policies will increasingly need to shift to serve a dual objective of protecting the poor and vulnerable from shocks and promote the human development of the population,” states the study.
The report from the study has added that a growing, well-educated labour force that is supported by efficient policies during all stages in life can set Botswana and other Southern Africa countries on an inclusive and sustained growth path. “But if policies fail to change, a poorly skilled and unemployed workforce will likely be left to perpetuate the vicious cycle of poverty and inequality.”
The report has indicated that having majority of the working-age group out of the workforce hinders economic growth, equity, and poverty reduction as the economy is underutilizing a valuable resource which is labour while at the same time it needs to provide for a large number of dependents.  “And unemployment among youth means a double loss. The economy is forgoing not only the economic benefit of more workers, but the benefit of the very cohort that has achieved historically high levels of education.  If unaddressed, this unemployment will soon turn into a full-fledged jobs crisis with long-lasting consequences,” warned the report. It also stated that if the youth do not find stable and well-paid employment, they will not be able to provide for themselves and their families. “They will be unable to save for old age. And they will likely pass their precarious conditions on to their children, generating a vicious intergenerational cycle of poverty and vulnerability.”
The World Bank has suggested that young people who  have completed their education, Active Labor Market Policies (ALMP), such as job intermediation and retraining services, should be introduced to facilitate school-to-work transitions and ensure a better match between what workers can offer and what employers are looking for. “For youth with gaps in technical expertise and “soft skills” initiatives such as working within a group, dedicated training and job insertion programs can make a crucial difference,” the Bank suggested.