The Botswana Confederation of Commerce and Industry (BOCCIM) furiously attacked Finance and Development Planning┬áMinister’s spending plan on Tuesday saying the minister’s plan failed to provide long term solutions┬áthat would see the country through the current global economic crisis.
Finance Minister, Baledzi Gaolathe, unveiled a P 10.56 billion ‘stimulus’ budget Monday targeted at┬á bolstering agricultural activities, creating┬á jobs, ensuring that the country is energy┬á and water self-sufficient┬á but added that it would result in a P 13 billion deficit that would be financed through borrowing and drawing from the foreign┬á exchange reserves.
“Precaution┬áis essential when tapping into the government’s accumulated reserves,” BOCCIM said in a statement released on Tuesday afternoon. “These reserves are intended for securing a future source of income, and cushion the economy in difficult times, when revenue from the mineral sector has depleted.”
The government, it said, should ensure that deficits are┬ásustainable┬áand can be financed, adding that accessing reserves should be done strategically as┬áeconomic recovery may be a relatively slow process.
The diamond rich southern African nation has accumulated huge┬á foreign exchange reserves, which, according to government, were worth around P 72 billion by November last year. However, diamonds, the country’s major foreign exchange earner, have been badly hit by the ongoing┬áglobal┬ácredit crunch as the┬ábiggest diamond consumer market, the United States of America’s economy is badly bruised by the crisis.
Revenue from diamond miningÔÇöa sector that contributes 33 percent to the GDP ÔÇô is expected to slouch-down by┬áas much as 50 percent while prices are┬á estimated to fall by 15 percent during the 2009/10 fiscal year. Government fiscal year starts at the beginning of April.
“We agree that confidence in the country must be evident by continued infrastructure development and┬á investment; however, prioritization of projects is imperative at achieving the required growth rate of 7.5 percent for reaching the (national) Vision 2016 goals.
“Quality education, knowledge, skills ┬áand capacity building are ┬ácrucial for economic invigoration; however BOCCIM feels that projects, such as the development of schools in the education sector and rural roads developments, can be a phase process; prudence needs to be applied in these development areas.
“Value added a productive labour intensive projects that can contribute to employment creation and stimulation of the economy, such as IT infrastructure development and power projects, should be given priority,” BOCCIM said.
BOCCIM further said government needs to engage the private sector in seeking areas that need priority, singling out tourism as one sector that is expected to benefit from the 2010 World Cup, which will be staged in South Africa.