The Botswana Confederation of Commerce, Industry and Manpower this week pleaded with the Finance Minister to come up with pro-private sector strategies in the 2011/12 national budget as the sector’s life is dependent on increased government expenditure.
But, all indications from pundits are that there might be large expenditure cuts as treasury moves to balance the budget in two years.
However, BOCCIM has suggested that the speech to be read by Kenneth Matambo tomorrow, come up with measures that supports SMMEs, a sector which employs thousands of Batswana outside government.
The organisation headed by Maria Machailo-Elis stated that as a way of promoting the private sector, government should continue investing in economic diversifying strategies that will help the economy reduce dependence on diamonds.
“The general expectation of the budget from the private sector still stands on improved infrastructure, poverty alleviation, improved health & education facilities and creating an auspicious economic climate for sustained economic growth, together with fiscal stimulus packages for employment creation and economic diversification,” it said on Thursday.
The organisation, which represents around 2, 000 employers, also expects the budget speech that allocates more funds to infrastructural development and hence support for SMMEs, which make up the majority of business operations in Botswana.
“Stimulus recovery packages are anticipated towards micro and SMME’s, as many have still not recovered from the economic downturn,” says BOCCIM.
“The private sector also looks forward to fiscal and macroeconomic policies aimed at benefiting micro to large businesses and export led diversification.”
It is also hoped that infrastructural development will prove to be supportive of small business as there was a concern in 2010 that the sector was sidelined as public expenditure was focused on construction of public works projects, which have minimum impact on SMMEs.
BOCCIM fears that if the development budget is reduced, it is inevitable that smaller companies, especially citizen owned, will close shop.
The advise that the private sector gives to the minister is to finance small projects or unbundle mega projects to allow for participation amongst smaller firms.
However, it says standards should not be compromised, adding that ‘quality, high standard delivery, transfer of skills, and efficiency should be a key priority in the government procurement selection’.
“In supporting the private sector, government needs to reconsider their payment procedures; there are still delays of payments by government,” BOCCIM advises.
“This has a negative effect on SMMEs as it has implications on cash flow and operational processes.”
However, it is likely that government will want to curtail expenditure, both recurrent and development in a bid to fight consistent deficits.
In its 4th quarter briefing for 2010, Bifm suggested that the government budget will remain tight, with little or no increase in overall spending and a possible scaling down of development spending.
The asset manager also believed there is unlikely to be an across-the-board public sector pay rise in 2011.
BOCCIM was last year part of the non state actors players that took part in the budget consultations and it expects Matambo to incorporate some of the suggestion made by the industry.
The forum was conducted with the belief that private public dialogue will contribute to the economic development, especially through policy and tax reforms and to be included in the implementation processes for national development initiatives and programs.
The organisation, which represents around 2000 employers around the country, hopes the budget will talk more about electricity problems and diversification programme as the economy is still dependent on mining.
“Power supply issues continue to be an encumbrance for businesses. Government needs to inject more capital into power projects, especially alternative, green energy solutions. This will enable Botswana to be self sufficient and less dependent on other countries for energy consumption.”
On the diversification drive, tourism and agriculture and are two sectors they hope government will focus on in the budget.
