HIV/AIDS IN BOTSWANA: FRANCISTOWN BUSINESSMEN

UNCLAS GABORONE 000953

SIPDIS


AF/S FOR MALONEY

E.O. 12958: N/A
TAGS: KHIV ECON ELAB BC HIV AIDS ECON
SUBJECT: HIV/AIDS IN BOTSWANA: FRANCISTOWN BUSINESSMEN
DESCRIBE ECONOMIC IMPACT

REFERENCE: GABORONE 879


1. SUMMARY: HIV/AIDS is decreasing productivity and
reducing economic growth in Botswana. According to
members of the business community in Francistown,
Botswana's second largest city where some of the highest
HIV/AIDS infection rates in the country are found, the
costs of AIDS-related leave taking, higher dependency
ratios, and the loss of skilled workers continues to
outweigh the benefits of the GOB's free anti-retroviral
treatment program. Mission will continue to engage the
Botswana Confederation of Commerce, Industry and Manpower
(BOCCIM) and the Botswana Business Council on AIDS (BBCA)
to encourage a coordinated and proactive private sector
response to the challenge of maintaining economic growth
in an HIV/AIDS era. END SUMMARY

PROFITABILITY VERSUS SOCIAL RESPONSIBILITY


2. Mr. Sharif, a senior manager at the hundred-year old
hardware dealer Haskins, told PolOff on June 28 that in
the past two years he and his management colleagues at
other firms had begun to see the dramatic effects of
HIV/AIDS on the private sector. He reported that eight
out of 250 Haskins employees had died in 2004. He had
seen multiple instances in which an employee whose health
was fast deteriorating suddenly improved thanks to anti-
retroviral treatment. Nonetheless, workers still called
in sick at a much higher rate than before. Some
employees came to work too ill to perform their duties.
Those who showed no symptoms often bore the burden of
anxiety for sick loved ones, which resulted in slower,
lower quality work, he said.


3. Not only did workers worry about their relatives,
many had to help meet the cost of their medical care.
Mr. Sharif estimated that one-third of his staff had
taken financial responsibility for a least one additional
person in the last two years. This increase in
dependents occurred while the value of wages fell due to
inflation and devaluation. As a result, the number of
applications for salary advances had dramatically
increased, placing employees in financially vulnerable
situations.


4. Mr. Sharif described certain traditional practices as
exacerbating the economic impacts of the disease.
Management at Haskins, for example, had wrestled with
whether or not to grant salary advances on the basis of a
medical emergency when the employee intended to use the
funds to pay a traditional healer. Mr. Sharif reported
that many of his staff, including middle managers, turned
to these "witch doctors" even though they charged as much
as three times the cost of a private medical doctor.


5. Haskins employees were spending so much on funerals
that the company decided to institute a funeral benefit.
Haskins paid the enrolment fee and both the company and
the employee made monthly contributions to an account
with a funeral parlour to provide some form of insurance
to cover death expenses. Not only are funerals quite
expensive, he said, the social obligation to attend a
funeral extends even to distant relatives and
acquaintances. As a result, workers frequently requested
leave to attend funerals.


6. Naturally, these dynamics affected Haskins' customers
and their staff as well, which meant decreased revenue.
Mr. Sharif told PolOff that the previous day one of his
best customers, a general contractor, had lost to
HIV/AIDS his most reliable and highest skilled employee.
As a result, the contractor will need more time to
complete his jobs, reducing the amount of supplies he
orders from Haskins. Other customers, he said, had
purchased goods on credit but then encountered difficulty
paying their balances because unexpected medical and
funeral costs had cropped up. The company had shown
patience in such circumstances, but he was not sure how
much more lenience it could afford.

DOWNSIZING TO REDUCE LABOR COSTS


7. Mr. Pule, owner of a security company in Francistown,
told PolOff that he planned to reduce his work force from
over one hundred to only fifteen in 2006 due largely to
escalating labor costs. Although only two percent of his
employees had died in 2004, Mr. Pule had found that
drastically increased leave taking had fundamentally
altered the profitability of his business. He said it


was not unusual for an HIV positive guard to be away from
work for two to three weeks at a time when he or she gets
sick. Added to these prolonged absences from work are
the frequent funerals. Consequently, he planned to scale
back his staff by 85 percent and shift away from labor-
intensive security services to focus on selling security
technology such as surveillance systems.

NEEDED: SKILLED AND SEMI-SKILLED WORKERS


8. Like Mr. Pule, George Wirth, manager of a small
furniture-manufacturing firm in Francistown, had
witnessed HIV/AIDS undermine productivity and
profitability in his business. He indicated that
HIV/AIDS was diminishing the already small pool of
skilled and semi-skilled laborers. Two out of twenty of
his employees had died in 2004. One had just finished a
training course paid for entirely by the company - a lost
investment. Unlike Mr. Pule, however, Mr. Wirth could
not replace workers with more advanced technology and had
to sink additional costs into finding qualified
replacements.


9. Recognizing the impact this had on his bottom line,
Wirth had engaged his workers over the issue of HIV/AIDS.
He pleaded with those who had not tested to do so and, if
they were positive, to get treatment. Employees who had
started ARV therapy he encouraged to take their
medications regularly and to avoid lifestyle choices that
would undermine the benefit of their treatment - like
smoking and excessive drinking. Like Mr. Sharif and Mr.
Pule, he complained that traditional healers were
undermining efforts to treat those infected with HIV,
thereby not only shortening their lives but shrinking the
labor force as well.

COMMENT


10. Although these interlocutors agreed with PolOff on
the value of establishing firm-level policies on HIV/AIDS
and on keeping statistics on deaths, leave taking, etc.,
they said that BOCCIM had done little to promote such
strategies. Mission will continue to encourage BOCCIM to
play a greater leadership role in developing a proactive
and coordinated private sector response to the challenge
of maintaining a healthy economy in the face of the
HIV/AIDS epidemic. The Embassy will continue to work
with the BBCA in promoting an HIV/AIDS in the workplace
policy and work with the Ministries of Labor and Home
Affairs, Trade and Industry and Health on this important
issue.

HUGGINS


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