08 Dec 2019

Government will not consider making pension compulsory in Botswana as it may negatively affect the facilitation ease of doing business.

Minister of Finance and Economic Development Dr Thapelo Matsheka told Parliament that administrative and compliance costs to compulsory pension legislation would no doubt be erroneous and could reduce job creation opportunities and increase the cost of creating sustainable jobs.He said employment in the private sector was sometimes seasonal while some employees were highly mobile, especially in the informal sector. 

He said this would create challenges of payment of contributions during the unemployment phase. Dr Matsheka said a framework was already in place for private employers wishing to contribute towards the financial welfare of their employees during retirement. He said they could set up pension funds for their employees or join existing employers’ funds. He said personal pension plans were also available in the market wherein individuals could save for their retirement.

Dr Matsheka explained that government had put in place an old-age pension scheme to which no contributions were made for the benefit of all qualifying Batswana. 

He said one of the top priorities of government was to facilitate job creation through the private sector. He said government had put in place several initiatives to facilitate the ease of doing business in Botswana, which would translate into the much needed sustainable jobs. 

He said the scheme would continue to be reviewed in line with other national priorities.

He was responding to a question from Kanye South MP Mr Thapelo Letsholo, who wanted to know if government would consider making pensions compulsory in Botswana to reduce dependence on government by retired citizens, particularly from private companies. The minister was also to state what prevented the ministry from introducing it. He also wanted to know what it would take to implement it and how long it would take. ends