The Nature of Household Poverty in Botswana
In Botswana, poverty is mainly a structural problem that arises from the pattern of economic growth. This [study] is a contribution to the understanding of the nature of poverty in Botswana. The analysis is at two levels – the policy level and household level. While it is not wrong to base the success of poverty reduction initiatives on private sector development, the stark reality is that little has been achieved to date. In addition to the policy environment, this [study] examined household characteristics that contribute to poverty in Botswana. A logistic regression model was estimated using urban food security baseline survey data from Gaborone to examine demographic, social, and economic factors that determine household poverty. The estimation results showed a positive and significant relationship between household size, total household consumption expenditure, and household poverty status. These results also carry significant information relating to the design of specific programmes targeted at addressing poverty at this level. [This 2012 study serves to provide a background to Botswana’s poverty challenges which national policymakers including the government, are actively tackling - EDITOR]?
While Botswana has been hailed as a beacon of economic management compared to most African states, unemployment, and poverty. African states, unemployment, poverty, and inequality have remained major policy challenges. Prior to the recent global economic downturn, which resulted in an unprecedented loss of diamond revenues, Botswana was considered one of the best performing economies, with an estimated per capita income of US$6,000 as at the end of 2009 (Bank of Botswana, 2009). For many households, however, these macroeconomic indicators disguise the harsh realities they have to contend with. This is because while Botswana has won many accolades for economic management over the years, for a large section of the population, unemployment, poverty, and inequality define their harsh reality at the household level, with poverty incidence estimated at 30.6% at the national level (Republic of Botswana, 2008).
Poverty is especially rampant in rural areas, where poverty incidence, gap and severity are all estimated to be significantly?higher than in other areas. Development economics literature identifies employment as the principal link between economic growth and poverty reduction (Hull 2009, Dollar and Kray 2002, Ravallion 2001). Hull (2009) argues that the growth of the economy, especially in one sector, does not automatically translate into benefits for the poor. Poverty reduction depends on the profile of growth, and its employment and productivity intensity, the sectoral location of the poor as well as the extent of mobility across the sectors.?Despite the high rates of economic growth, in Botswana, these are unfortunately attributed to one sector, diamond mining, which is highly capital intensive. This has meant a very low number of jobs created within the sector?(Malema).
The non-mining sectors have also tended to lag behind in terms of growth and contribution to total economic output and employment creation. The manufacturing sector, which has high employment and productivity, and in spite of the policy support it has received from the Government over the years, contributes only marginally to total economic output, and moderately to employment.?The structural nature of the economy, hugely dependent on mining, and with minimal activity outside this dominant sector, has resulted in limited employment opportunities for a large section of the population, with significant consequences on income generation and poverty at the household level.
According to the 2005/06 Labour Force Survey, overall unemployment was?estimated at 17.6%, with the youth being the most affected by unemployment. Preliminary results of the Core Welfare Indicators Survey 2009/10 show a marginal increase in the rate of unemployment to 17.8%. This translates to 126,349 unemployed persons out of a total labour force of 710,600 during the survey period (Republic of Botswana, 2011). Consistent with the labour force survey, the Core Welfare Indicators Survey estimates unemployment to be higher among the youth compared to other age groups (41.4% for age group 15-19 and 34.0% for age group 20-24). This is a result of the narrow economic base and the consequently limited employment opportunities which have led to relatively high levels of poverty (30.6% of the population).
This [study] seeks to understand the nature of poverty in Botswana. In addition to a review of the policy environment, the study uses Urban Food Security Baseline Survey data (2008) for Gaborone to accomplish this objective. The National Strategy for Poverty Reduction (NSPR) is the key policy document guiding intervention regarding poverty. The strategy seeks to link and harmonize the various sectoral initiatives relating to poverty. Before the strategy was adopted in 2003, poverty reduction initiatives were somewhat fragmented, without a clear and concise policy framework or guidelines for addressing poverty.
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The result was uncoordinated interventions which yielded insignificant results in terms of reducing poverty. The NSPR was thus devised as a strategy to provide people with opportunities for sustainable livelihoods. The objective was to expand employment opportunities through broad-based economic growth, in terms of sectoral and geographic spread. At the micro-level, the strategy sought to enhance access to social investment by the poor, with a view to promoting their capabilities to work and earn an income.
The strategy recognised that there were sections of the population who might be unable to take advantage of the opportunities afforded by expanded employment opportunities.?For this section, the Government would continue to use targeted social safety nets aimed at preventing them from falling into abject poverty (Republic of Botswana, 2003). While the NSPR is a welcome development in terms of providing overall guidance on addressing poverty, there is little cause for optimism in terms of achieving the desired results, primarily because the objectives of the policy depend on the successes recorded in complementary policies, especially those aimed at developing a viable private sector.?
Key among these are the Industrial Development?Policy (IDP) and the Policy on Small, Medium and Micro Enterprises (SMMEs).?The aim of these two policies is to facilitate an enabling environment for private sector development and growth. However, while the government clearly has the desire or intent to diversify the economy, to date little has been achieved. The private sector remains narrow and shallow, with weak inter-sectoral diversity?and production links.
Questions continue to be asked why the private sector continues to falter despite the policy support from Government. The key to unlocking the paradox surrounding private sector development in Botswana is making the private sector to perform as per the policy support; otherwise the objectives spelt out in the NSPR are less than likely to be achieved, at least in the foreseeable future. The challenge remains with policy makers, private sector and all other institutions, including researchers, to find workable solutions to diversifying the economy.?In addition to the recent economic drive (EDD) initiatives, it is hoped that privatization,?which has been somewhat slow to take off, will provide the much needed boost for meaningful private sector participation and development in Botswana.?
[The trio held the above respective positions during the time they undertook this research, a two part series whose second installment will be published in the second edition - EDITOR]?
Study extracted from The Resposible Citizen Magazine, December 2016 issue