Business Botswana has pushed back hard against the proposed P4,000 minimum wage, warning that its immediate implementation could cripple businesses, trigger job losses, and force many to shut down.
The organization that represents about 2,500 businesses across the country, has urged the Minister of Labour and Home Affairs, Major General Pius Mokgware, to reconsider the timeline for the wage hike.
Following a February summit in Gaborone, Business Botswana’s research arm revealed that only 32% of businesses support the immediate implementation of the P4000 minimum wage, with the majority, particularly small and medium-sized enterprises (SMMEs), strongly opposing it.
“Respondents expressed significant worries about rising operational costs and the potential for inflationary pressures if businesses are forced to increase prices to accommodate higher wages. Additionally, fear of job losses were prevalent, particularly among SMMEs that may struggle to absorb these increased costs,” the resolutions read in part.
The business representatives say that operations of businesses across various sectors, such as manufacturing and agriculture and warned that “there are notable issues costs and risks with implementation, too important to ignore”.
Businesses warned that sectors like manufacturing and agriculture, which rely heavily on low-wage labour, would face severe challenges.
“The government should introduce the minimum wage increase in phases over a specified period of four years – year 1 – P2500, year 2 – P3000.00, year 3 – P3,500.00, year 4 – P4,000.00 to enable to gradually adjust their budgets and pricing strategies,” read the recommendations to the minister.
The business community added that there should be an implementation strategy in place to accommodate the needs of each sector and for those that are heavily reliant on low-wage labour such as agriculture and retail.
The businesses also want the government to conduct comprehensive research on the economic effects of the minimum wage increase, including its impact on employment levels, business sustainability, and consumer prices. They said data from research is critical in decision-making and policy design.
The business community warned that higher minimum wages can increase costs of production for employers, leading to reduced employment unless there is a corresponding increase motivation and in productivity.
Representatives of the manufacturing sector stated that they are competing with cheap products from other countries, and therefore they will be at a disadvantage.
There are also warnings that some businesses might adopt technologies to replace humans, something that will contribute to unemployment which currently stands at over 34%, most affected being the youth.
Meanwhile, when contributing to the Budget Speech debates recently, Minister for technology and innovation, David Tshere, sparked controversy when he said that businesses that cannot afford the P4000.00 minimum wage should shut down.
And this rich maniacs are so ready ro make profit out of the sweat of their employees and send their kids to expensive schools and still not ready to pay those who make those riches for them