Friday, August 12, 2022

Gaolathe unveils a budget marking a return to rapid growth

Minister of Finance and Development Planning Baledzi Gaolathe on Monday presented a national budget of P27.18 billion.

Addressing parliament, Gaolathe said a budget surplus of P738 million is forecast.
The minister said of the total budget P19.82 billion will go towards the recurrent expenditure while P7.26 billion will finance the development expenditure.
The Ministry of State President takes the largest sum of P1.93 billion or 27 percent of the development budget.

This year’s total budget is increase of P570 million or 2.6 percent over last year’s.
The development expenditure has gone up from last year’s P5.8 billion.
This year’s budget theme centered on productivity, on which the minister said rests Botswana’s continued progress and development.

In his speech the minister indicated that the non mineral sector has been growing, which is a positive development in as far as the government’s economic diversification initiatives are concerned.

For many years now government has been preoccupied with diversifying the economy away from the minerals sector, most especially diamonds.

While diamonds have had a difficult year as a result of sluggish demands, other minerals like copper and nickel have had a good run, said the minister.

The Minister said the bulk of the money will be accounted for by the HIV/AIDS programme which falls under the Office of State President.

The second biggest allocation goes to the Ministry of Local Government, followed by that of Works and Transport which has tasked with maintaining the deteriorating infrastructure especially roads.

While in the past the Ministry of Education was allocated the biggest chunk, this year it ranks six, following in the heels of the Ministry of Health, and that of Minerals.
Government has decided to increase Public Service Salaries by 6 percent.

The Minister said the GDP forecast for the 2007/08 is P66.67 billion in current prices.
The Minister said while the original estimates for the last fiscal year (2006/07) was a budget surplus of P1.73 billion, the revised figures showed a much larger sum P4. 39 billion, mainly due to the P2.06 billion increase in Customs revenue from P5.30 billion to P7.40 billion.

He however warned that such increases should not be expected in future.

“The SACU Council of Ministers decided that the Surplus revenue shares would be paid in 2006/2007 financial year rather than be spread over more than one year,” said the Minister.

“Another notable increase is in non-mineral tax revenue which increased from P2.92 billion to P3.32 billion, representing an increase of P395 million,” said Gaolathe.
In his concluding remarks Minister Gaolathe pointed out that while Botswana has experienced rapid growth over the last forty years, the biggest challenge now will be to sustain such growth.

“The major challenge is now to sustain that high growth with attendant diversification beyond the predominant diamond mining sector. With diamond production reaching its plateau, unless other larger and more profitable pipes are discovered the major objective is to increase the contribution of other minerals as well as the economic value of high productivity non-mining sectors. It is in this light that we must achieve higher growth path through Improved Productivity and Sustainable Economic Diversification which will ensure Global Competitiveness and thereby a higher living standards for all
Batswana,” said Minister Gaolathe.

More importantly, the minister said Botswana is on the threshold of big investment projects.

These include construction of dams at Dikgatlhong, Thune, Mosetse and Lotsane. Collectively these projects will cost P2 billion.

There is also the expansion of the University of Botswana at the cost of P702 million, the building of a Medical School at a cost of P573 million, and teaching Hospital at a cost of at least P500 million, the construction of Botswana international University of Science and Technology costing P5.3 billion as well as design and construction of senior secondary schools at Goodhope, Nata, Shakawe, Mogoditshane, Mmadinare which will cost P1.5 billion.

Further more government will facilitate speed up implementation of the rural electrification programme which will cover the electrification of 100 villages at an estimated P544 million and the rural telecommunication programme which will cover 197 villages over the three years at a cost of P265 million.

He said while these are large investments being made by both the private sector and the public sector, there are many smaller investments being made by the private sector which he said together reveal considerable confidence in the Botswana economy.
“The return to more rapid growth has already begun,” said Minister Gaolathe.


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