Gaborone, Jan 31 Businesses in Botswana have warned that the dramatic increase proposed by the new government in minimum wages could lead to higher inflation and unemployment.
The government wants to more than double the monthly minimum wages, from the current level of about 1,500 pula (about 108.30 US dollars) to 4,000 pula (about 288.80 USD).
Mpaphi Tsholofelo, head of policy and research at Business Botswana, said a recent survey by the non-profit organisation of some 2,000 companies showed that 28.5 per cent of companies stated they would probably increase prices to cover the higher costs, while 66 per cent reported they lacked the financial resources.
He told a symposium on minimum wages in Gaborone, the capital of Botswana, that "35.1 per cent of respondents reported it as the most important to consider anticipating layoffs to manage costs, while 64.4 per cent of respondents anticipate a reduction in workforce level due to financial constraints; 5.5 per cent said they will consider cutting employee benefits, and 4.4 per cent are considering cutting employee working hours."
The majority of respondents to the study on local businesses' awareness, acceptability, and readiness for the proposed minimum wage increase preferred a phased implementation to an immediate one.
Minister of Labour and Home Affairs Pius Mokgware said low salaries are a contributing factor to the country's high rate of crimes, including commercial theft.
He urged large companies that have the capacity to pay higher wages to stop hiding behind small businesses, insisting that the majority of companies across different sectors can afford to pay the proposed minimum wages.
Mokgware noted that a one-size-fits-all strategy will not work for smaller companies and that it is critical to strike a balance between ensuring the profitability of businesses and ensuring fair wages for employees.
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