Almost two months after President Ian Khama first announced the Economic Stimulus Package (ESP), the public is yet to get full details of the much anticipated economic booster.
Although the expectations was that President Khama will give more details on the ESP during his state of the nation address on Monday, he only repeated, almost word for word, the details that were shared at the BDP special congress when the announcement was first made.
“More information on the ESP will be provided through a brochure that I expect to be published soon,” Khama said.
Khama, who was making his second state of the nation address since reelection last year, said that the government has since recognized the need to take bold, proactive measures to stimulate the local economy while quickening the pace of public sector delivery.
“The Economic Stimulus Programme (ESP) that I unveiled last month is a holistic action plan for achieving the goals of stimulating economic growth, accelerated employment creation and promotion of economic diversification,” he said.
The identified key sectors that will drive the program include infrastructure, agriculture, tourism and manufacturing and services. They will be enabled by establishment of Special Economic Zones (SEZs) and the Economic Diversification Drive (EDD). However independent economists maintain that it is difficult to review the economic stimulus package due to the absence of information regarding its content, timing, magnitude and funding.
Leading independent economist, Dr Keith Jefferies of Econsult, who is also a former Bank of Botswana Deputy Governor says indications are that the programme will be large, and is likely to be implemented as soon as possible. Despite the absence of much detail, Jefferies argues that the stimulus will in no doubt result in a short-term boost to economic activity and some job creation, particularly in construction and related activities such as building materials supplies, architects, surveyors and engineers.
Another independent economist, Moatlhodi Sebabole, who is also a researcher manager at First National Bank Botswana (FNBB) also decried lack of depth on details surrounding the much talked about program. The stimulus package comes a few months after the government slashed its 2015 growth forecast from 4.9 percent to 2.6 percent in September, saying the country will post a budget deficit this year. Diamonds account for around 75 percent of Botswana’s foreign exchange earnings and 30 percent of GDP, but gem demand has slowed since late 2014 as middlemen who buy rough stones struggle with a stronger dollar and liquidity problems. The value of rough diamond exports from Botswana’s mines fell 15 percent in the first six months of the year. Available figures show that the domestic economy’s past growth was spurred by mining output which outpaced non-mining private sector growth. However, mineral revenues are expected to decline in the short-to-medium term while SACU revenues are under threat.
However President Ian Khama is optimistic that the programme shall bring to an end the current crisis of unemployment facing the domestic economy. Khama said Monday that the economic stimulus budget would be spread in all areas; building construction, road construction, tourism development, increased agricultural production and manufacturing.