Thursday, May 30, 2024

Botswana’s economic structure needs a reality check

Sometime next month, the minister of Finance, Thapelo Matsheka will deliver his first ever budget speech since ascending following General Election in October last year.The nation awaits to hear what he has that is different from the boilerplate speeches that over time have been quite correctly downgraded by the public who view them as pointless rituals.

The budget speech comes at a time when Batswana have become very worried, very skeptical and even cynical about their economic prospects.That there is a need for a total rethink is no longer refuted.The hope is that Dr Matsheka will provide a fresh perspective.This will require innovation and imagination on his part.

He has to design fresher armouries to tackle the newly emerging but persistent difficulties.The country needs to show ambition in the back of adversity.He has to set and open new paths and new parameters.It is important for politicians to take charge of the direction that they want to send the country.This would mean politicians wrestling back the enormous power that they have delegated to civil servants and technocrats literally to run this country.

For far too long, Botswana’s economic direction has been outsourced to civil servants and technocrats.This has made them too powerful and often bellicose, indignant and even defiant against politicians and the public who are really their masters.Early indications are that the budget deficit will continue to grow.We await news from the minister on how he intends to tackle the deficit.

Options remain open to him to either allow it to grow with the hope of addressing it later down the road, or to contain it by restraining any further expenditure.In the campaign trail last year, President Mokgweetsi Masisi who will also have a stake in preparing the budget did not make a single hint on cancelling any major development projects.

Yet we now see a string of projects being cancelled across the country.The budget speech should provide the much-needed clarity on this.We urge on government not to shrug off its responsibilities.Government through its spending should shoulder responsibility in the face of a weakening economy.

Hastening to cancel the projects, especially in the face of need and also broken-down public infrastructure often smacks of a raise to the bottom.Admittedly, Botswana today is very low on ammunitions to use than was say the case in 2008 when the global economy slid down.

Reserves are no longer strong as was the case.Diamond receipts no longer as buoyant. Productivity has not showed any discernible growth.Outside of diamonds, mining has had challenges since the closure of BCL.

This year’s budget speech will be instructive.For the speech to be successful it has to be an economic letter but also a political statement.Batswana need both, if the gloom draping them is to be removed.

Batswana need a confidence booster.The budget speech can achieve just that.Overall no amount of economic panel beating will be successful unless it is premised on employment creation.Higher government spending really looks like by far the biggest bet this year given that all other avenues are for now closed.Dr Matsheka’s brief as he approaches the D-Day should include reasserting the economy, increasing its dynamism, making it more inclusive and above all giving meat and meaning to the current talk of “knowledge economy.”


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