05/08/2025
Yesterday the MP for Kanye West, Victor Phologolo made deliberations in form of questions to minister Finance who is also the Vice President of the Republic of Botswana.
๐ฃ๐๐ฅ๐๐๐๐ ๐๐ก๐ง๐๐ฅ๐ฌ ๐ค๐จ๐๐ฆ๐ง๐๐ข๐ก & ๐๐ก๐ฆ๐ช๐๐ฅ
๐ข๐ฅ๐๐๐ฅ ๐ฃ๐๐ฃ๐๐ฅ (๐ ๐ข๐ก๐๐๐ฌ ๐ฐ๐ง๐ ๐๐จ๐๐จ๐ฆ๐ง, ๐ฎ๐ฌ๐ฎ๐ฑ)
๐ค๐๐ฒ๐๐๐ถ๐ผ๐ป ๐ก๐ผ: (๐ฐ๐ฑ๐ต) ๐ญ
๐๐๐ธ๐ฒ๐ฑ ๐ผ๐ป ๐๐: ๐ ๐ฅ. ๐ฉ. ๐. ๐ฃ๐๐ข๐๐ข๐๐ข๐๐ข, ๐ ๐ฃ. (๐๐๐ก๐ฌ๐ ๐ช๐๐ฆ๐ง): To ask the Minister of Finance to update this Honourable House on:
(๐ถ) the staggered salary payments of civil servants and if it will remain in place for the foreseeable future; and
(๐ถ๐ถ) whether the payment schedule is favourable to small businesses such as the taxi industry. (๐ฐ๐ฑ๐ต)
๐๐ก๐ฆ๐ช๐๐ฅ:
Mr. Speaker, the Ministry of Finance through Office of the Accountant General has with effect from the 1 April 2022, revised the Government payroll schedule from the monthly payment of salaries to a weekly pay schedule. It was part of government's initiative to support local businesses by ensuring continuous
economic activity through equitable distribution of money throughout the month. Moreover, it was intended to reduce overcrowding at business places and shopping malls during and post COVID19 era.
Mr. Speaker, the Government payroll consists of Ministries, Departments and Agencies (MDAs), making a total of twentyยญ nine (29) entities divided into three (3) pay groups. Previously, government employees were paid from the third week of the month with a three-day gap between the pay groups. The new payroll schedule pays each group monthly, one week apart. Pay Group one (1), which consists of eighteen (18) government institutions, is paid in the first week of the month. Pay Group two (2), with six (6) government institutions, is paid in the second week. Pay Group three (3), with two (2) government institutions, is paid in the third week. Group 3 is the small group, but it includes the Botswana Defence Force and the Teaching Service Management, which are the two largest organisations.
Mr. Speaker, the private sector, which has been paying salaries in the last week of the month, continues to do so, thus taking care of the last week of the month in terms of ensuring continued economic activity. The objective of the revised Payroll Schedule is to ensure equitable distribution of money throughout the month, thus promoting continuous economic activity. While the COVID19 pandemic has eased, initially it was anticipated that this will contribute to reduction of COVID19 spread since the pay days ensure that business places and shopping malls are not overcrowded. This arrangement continues to play a critical role in reducing the spread rate of communicable diseases.
Mr. Speaker, the weekly payroll system is not without challenges, and the main one is the heightened level of risk that comes with payment of salary in advance. The international and common practice is that salary is paid in arrears. Payment of salary in advance poses a risk of overpayments due to death, retirements and resignations which occur before the end of the month or before one completes the work days per month cycle.
Furthermore, recovery of these salary overpayments may at times be difficult due to various factors such as an officer having insufficient funds to cover the liability. These in turn translate into loss for Government.
Mr. Speaker, my Ministry has put in place internal controls to reduce the likelihood and impact of salary overpayments. These amongst others include payroll verification by various Ministries before final payroll processing. This activity serves to provide reasonable assurance on the accuracy of the payroll on monthly basis.
Mr. Speaker, we strongly believe that the primary objective of this initiative which is to ensure equitable distribution of money throughout the month, thus promoting economic activity, has been achieved to a certain extent. We have noted the apparent improved performance of the local businesses, including SMMEs, (Small Medium and Micro Enterprises) in which the taxi industry form part of. In order to validate our view, the Ministry of Finance conducted a perception survey/study in the month of January 2023, on the economic impact that this new pay structure has brought about. The results were positive in terms of the spreading of economic activities throughout the month and reduction of overcrowding in places of business. The results are based on seven sectors of the economy, both government and private sector. Specifically, the sectors included Financial Institutions, Non-Bank Financial Institutions, Small Medium & Micro Enterprises, Telecommunications, Entertainment, Retail businesses and Government employees.
Mr. Speaker, the overall response rate of the questionnaire was 90%, which is above the 60% acceptable response rate. In this regard the results can be used to inform policy analysis. The results show that the new payroll schedule meets its objectives of spreading economic activity throughout the month and reducing overcrowding in malls and service areas. The results reveal that more than 50% of the sectors would oppose Government reverting to the old system. In addition, majority of the sectors indicated that they have not incurred any additional cost implications and are experiencing positive results from the change.
Mr. Speaker, it should be noted that the scope of the study was limited to Gaborone and surrounding areas due to limitation of both financial and human resources, thus there is need to increase the coverage so that the results are sufficiently representative. The Ministry has put together a plan to embark on nationwide study with the assistance of Statistics Botswana, however this has been put on hold due to the current economic situation. Thus said, a more comprehensive study would be conducted, funds permitting to assess the overall effectiveness of this initiative. Thereafter, periodic assessment would be conducted to determine the relevance of this initiative and look into ways of improving its delivery.
I thank you Mr, Speaker.
