Friday, December 3, 2021

Can gov’t please start telling the truth regarding ESP

The national budget has come and gone. Just like in previous years, little can be said about it. This is so despite the fact that the recently announced Economic Stimulus Programme (ESP) had created so much excitement in the buildup to the speech. In actual fact, had it not been for the ESP, we doubt if any of our ordinary people would have had interest in listening to this year’s budget speech.

This is so because over the past few years a majority of citizens have lost interest in the budget speech. They neither follow the speech nor bother to later read it to determine what is in it for them. The failure by the bargaining council to conclude negotiations for public service salaries made it difficult for the budget to include any wage adjustments, which further dented public interest in the budget speech.

From where we stand it seems many Batswana have disengaged because they have since classified the budget speech as a meaningless ritual. Many Batswana also feel that the Minister always sings the same song and hardly brings anything new to the table, as he only announced minor changes to highlight current economic data. All in all, the budget speech seems to be a repetition of the same thing over and over again as it normally comes out just like the previous ones.

Unlike the last two or three budgets, the 2016/17 speech was however highly anticipated. Primarily because the Minister responsible for Finance, Kenneth Matambo had in November 2015 hinted at his intentions to share detailed information on the Economic Stimulus Programme (ESP).  This is the programme that raised the hopes of many Batswana as they believed that finally their economic standing will be upgraded. But that was not to be, as on Monday Matambo said very little about the ESP in his 20 page speech. Despite the expectation that he will give a specific budget for the ESP, Matambo chose not to. Not just that, Matambo also chose not to state specific sources of funding for this programme. He would rather have the citizens guessing where the money will be coming from, between debt markets, Pula Fund and government investment account and any other available source of funding.

Apart from the lack of further details on the ESP since its first announcement, there was a lot of inconsistency on exactly when the programme will kick start.

While Matambo told the nation on Monday that ESP is scheduled to start in earnest in the 2016/17 financial year, his Secretary for Economic Affairs Taufila Nyamadzabo sang a different tune the very next day. Nyamadzabo told the business community at the FNBB budget review seminar that over P1billion has since been allocated to the ESP during the current financial year, which ends in the next two to three months while another P2billion will be spent in the next financial year. Who is fooling who between Matambo and his right hand man? We tend to believe Nyamadzabo.

Whatever the case, the truth of the matter is that our economy is currently on a gridlock, so for us as a nation the real problem therefore becomes that, with this ESP, we might be crowding out what we need — an ultimate private enterprises recovery — by doing enormous amounts of government spending to artificially prop up the domestic economy. Let us make no bones about it; this ESP will create economic growth temporarily. But it will only be a false recovery, and it could be followed by a possible second slow growth. With no ammunition left, what will the government do then? Mind you, we are not insinuating that an economic stimulus package cannot be successful if implemented with proper provisions. The underlying questions at the moment however relate to the provisions of this package.

Sadly it is not immediately clear how far down that road the government is prepared to travel if intended results do not come around as quick as they should. While using the reserves or visiting the debt market is likely to breathe life back into the domestic economy, such instruments are also very high risk. Without a doubt though, there is need to reinvigorate the economy following unrelenting tough times over the past few years. The question is whether the ESP is the right way. The #Bottomline therefore is, as the domestic economy labours under the weight of tumbling commodity prices, unemployment as well as the rising need for serviced land, there is need for serious reinvigoration. In the meantime we wait and see whether government will start telling the truth, given the contradicting information that has come out so far regarding the ESP and its implementation. 

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