As the National Budget Speech date is fast approaching, BIDPA’s Grace Tabengwa opines the main principle that will guide its prioritisation process for are the challenges that are currently prevailing in the economy. This entails fall in revenue and disappointing performance by the economy’s utility sectors.
At the same juncture, the general view is that Botswana’s growth remains under risk given the decelerating performance of the mining sector which has been witnessed in recent times..
In an interview with Sunday Standard this past Friday, Dr Tabengwa stated that one would thus expect the growth strategy for the upcoming budget to continue with support for strategies to boost growth particularly in the non-mining sector. She added that in this context, the expectations are for emphasis on promotion of the private sector economy.
Tabengwa emphasised that there will be a need for support on promoting productivity growth and competitiveness. She said a number of factors have been identified as issues that impact business productivity. She further noted poor work ethics, bureaucracy and red tape, labour market and work permit procedures, mismatches between the labour market needs and the inadequacy of skills as some of the problems affecting business productivity..
“Infrastructure, transport, lack of water and power have negatively affected production and the overall growth pattern and these are priority areas that are expected to attract budget support as to enhance the growth process,” she stated.
She believes that water, power and infrastructure are crucial since growth rates are projected at just above 2.5 percent in Botswana adding that this would no doubt impact job creation prospects and overall private sector growth.
According to Dr Tabengwa, the budget unfolds in a year when the Vision 2016 is coming to an end, NDP 10, MDGs where there is a need to wind up ongoing projects that were to facilitate the realisation of a number of crucial goals set out. She said the prioritisation process is thus a mammoth task, given the decline in growth and commodity prices.
“One expects the budget to be focused on the prioritisation and allocation of resources to boost performance and growth.”
At the same time there are expectations on funding for infrastructure development and its maintenance, completion of ongoing projects in view of the NDP 10 conclusion.
“Cognisance is also in view of the thematic areas identified as focus areas given economic challenges that were identified in the BSP being: promoting inclusive growth; macroeconomic and microeconomic balance: improving productivity; appropriate skills development,” said Dr Tabengwa.
The budget strategy paper delivered in September 2015 also set the areas for priority focus for the upcoming budget which includes project implementation and maintenance of existing infrastructure according to Dr Tabengwa.
Dr Tabengwa believes that the government’s planned Economic Stimulus Programme (ESP) is appropriately timed given the risks for growth in the context of Botswana.
“One would thus expect the focus of the ESP to allow for the completion of ongoing projects, boosting growth in the key sectors of the economy to support the diversification process. The ESP is crucial to ameliorate growth risks with a view to ensuring that even higher positive growth rates are realised given the emerging current growth risks,” she stated.
Dr Tabengwa is of the view that the emphasis for the budget should be on the support for growth processes. She said efficiency gains for budget outcomes would be realised with mindset change across all stakeholders: private, government sector and individuals. She further added that the budget by government must be recognised as supportive and facilitative and that transformation would be achieved if all stakeholders utilise the support to effectively and efficiently deliver.