23/11/2021
ECONOMY RISES FROM ASHES
The Botswana economy is projected to grow over the next two financial years following the 2020 COVID-19 pandemic induced economic contraction.
Minister of Finance and Economic Development Ms Peggy Serame revealed this yesterday in her introductory remarks to the third budget pitso session for MPs.
She said after the 8.5 per cent negative growth recorded in 2020, the economy was expected to rebound this year with GDP projected to reach 9.7 per cent and by just over four per cent in both 2022 and 2023.
Ms Serame said the Economic Recovery and Transformation Plan and the Reset Agenda would guide the budgetary structure and priorities over the two years.
Saying resource decentralization was critical for smoother delivery of development projects, Minister Serame said there was need to outsource some local authorities tasks to the private sector.
She pledged an increase in public private partnership (PPP) model projects next financial year.
Explaining the budget process, Ms Serame said the ministry monitored economic performance as well as budgetary expenditure and made a forecast around June and July.
βThereafter, in August, a budget strategy paper is developed containing projections and the priorities for the next financial year. In October we had two Budget Pitso sessions with general stakeholders and local authorities to consult them on what they think of our Budget Strategy Paper, and to solicit their ideas on what should be priorities,β Ms Serame said.
Secretary in charge of the ministryβs economic and financial policy, Mr Kelapile Ndobano said with the budget projected to return to surplus, the ministry had realised the need to reduce the national debt and rebuild financial buffers including replenishing the General Investment Account.
He said most of the revenue was anticipated to come from customs and excise, mineral revenue, non-mineral revenue and value added tax (VAT).
After some tax and levy increases, Mr Ndobano said, inflation reached 8.8 per cent last month, up from 2.8 per cent in 2018 and 1.9 per cent in 2019.
However, inflation was expected to average five per cent next year which was within the Bank of Botswana three to six per cent objective range, he said.
The ministryβs permanent secretary, Dr Wilfred Mandlebe said Batswana needed to realise that government was run through taxes.
He implored MPs to sensitise their constituents on the need for the state to raise funds through various levies.
Commenting, Assistant Minister of Basic Education, Ms Nnaniki Makwinja expressed concern over the huge government expenditure with the bulk of it being personal emoluments which she said left ministries with little to spend on development projects.
Okavango legislator, Mr Kenny Kapinga said the country should invest heavily in infrastructure development.
Maun East MP, Mr Goretetse Kekgonegile said the Botswana economy was skewed towards creating jobs and wealth for other countries through the sale of raw commodities.
Instead, he said, there should be value addition through the creation of a strong domestic manufacturing base.
Bobonong MP Mr Taolo Lucas called for greater state intervention in the economy to create such industries.
He said over-reliance on the private sector for investment was an ideological stance that was not bearing fruit.
The consultation with MPs was the third and final Budget Pitso session ahead of the 2022-23 budget compilation. BOPA
