Unemployment looms

Unemployment looms


 Thousands of Batswana have added to the 17 percent national unemployment statistic after more than ten companies shut down in 2014 alone. With more retrenchments looming this year, analysts are predicting that unemployment figures will shoot over the roof, write KEABETSWE NEWEL and BOITSHEPO MAJUBE


What is disheartening, according to Thabelo Nemaorani, is the poor effort to create employment, especially in the public sector as the traditional major employer. Keith Jefferies’ staffer at Econsult Botswana says records show that 5000 jobs are created every year, which is far below demand.


“Over 20 000 graduates raise unemployment statistics every year, which creates a big variance between employment and unemployment figures,” Nemaorani says.


While on the campaign trail last year, President Ian Khama spoke considerably about employment creation, characterizing it as one of his top priorities post-election. While just over two months after the general elections is admittedly too early to evaluate Khama’s promise, it is worth noting that the Botswana Development Corporation (BDC), his government’s investment vehicle, retrenched over tens of employees last year in the name of financial stability.


“Over 20 000 graduates raise unemployment statistics every year.


But BDC is known to have invested billions of pula into projects that never materialized, the notorious Palapye Fengyue Glass Project being one example. Another BDC subsidiary, Lobatse Clay Works (LCW), retrenched 64 employees in 2014. The company experienced financial and management troubles, resulting in loss of market share despite its quality stock bricks.


Certain government’s policies have also been blameworthy for loss of employment, including Khama’s controversially puritanical views that were typified by imposition of a sweeping alcohol levy and restricted trading hours for alcohol outlets in 2008 and subsequent years. Botswana’s major brewer, Kgalagadi Breweries Limited  (KBL), was heavily impacted, resulting in retrenchment of at least 23 employees last year after government banned the sale of opaque beer in households (shebeens).


Many see thius as government shooting itself in the foot or, as the saying goes in Setswana, stabbing itself in the belly. This is because the government is a major shareholder in KBL through BDC.


Meanwhile, the government’s privatization policy is causing many Batswana to hold their breath for fear of massive retrenchments in the name of rationalization and profit maximization. Currently Botswana Telecommunications Corporation Limited (BTCL) is on the threshold of an initial public offering that has already had its victims in the form of 23 employees losing their jobs last year.


The private sector is faring no better in employment stakes. Towards the end of last year, Australian mining outfit Discovery Metals Limited (DML) made an announcement that will see hundreds dumped on the street.


Close to 400 employees DML’s 100 percent owned Boseto Copper Project will be retrenched in May this year. This follows the Australian miner’s announcement last year that it planned to be shut down the Boseto Copper Project. The announcement was made in the midst of financial woes that were so serious that no investor wanted to touch the outfit. Over time, the company’s share price has dwindled and it ran out of operating cash.


Meanwhile, the government’s privatization policy is causing many Batswana to hold their breath for fear of massive retrenchments in the name of rationalization and profit maximization.


According to DML Country Manager, Mokwena Morulane, only 42 of Boseto’s current staff complement of 422 will remain when the project is put under care and maintenance within the next six months. The Chairman of North West District Council, Reaboka Mbulawa, has told The Business Weekly & Review that the closure of the mine will have a negative impact on the economy of the region.


In the financial sector, leading bank, Standard Chartered Bank Botswana, will shed a substantial number of jobs by the end of this month, January. The company informed stakeholders December of this intention that those in the know say is influenced by plans to install a new operational strategy. Despite its rising profitability, the Botswana Stock Exchange quoted company is threatened by troubles like rising liquidity challenges in the banking sector, according to analyst Nemaorani.


Christmas was bitter time for all 133 employees of sweet maker Cadbury Botswana because the confectioner closed its doors in Botswana at the end of December. Lead Corporate & Government Affairs (for) Southern, Eastern and Central Africa, Navisha Bechan-Sewkuran, could not be drawn to state the reasons for the closure.


Journalists and their industry associates have not been spared the anguish of retrenchment. The Mmegi Group, a giant that owns newspapers Mmegi, The Monitor, Botswana Guardian and The Midweek Sun, and holds a stake in radio station Gabz FM, fired 42 people across its empire. The media group’s new owners, among them property magnate Sayeed Jamali, are said to be keen to restructure the company for profit maximization.


Meanwhile, against expectation, leading milk producer, Delta Dairies, is on the verge of liquidation after its owners Dr Howard Sigwele and crew won large tenders to the tune of P3 million from government. Coronation Botswana, whose operations were mainly supported by tenders from Botswana Public Officers Pension Fund (BPOPF), went to the wall just last year after BPOPF terminated its contracts with the company, leaving 10 employees in the lurch. Distell Trade Express, a unit of Africa’s largest beer distributer, Distell Group, also shut down last year, rendering 10 people jobless. A similar fate fell upon employees of Builders Merchants Botswana.

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Majube covers the economy and public finance. He also manages production. He has worked in various publications in the last ten years, Specialising in Business and Features. He has held the position of Desk Editor at the weekly the Echo, and most recently was part of the award winning Business team at Mmegi. In recent times Majube has covered the liquidity challenges of the financial sector as well as the Bank of Botswana’s oversight role in the banking sector.