A top government official said Tuesday that government will be reconstituting the Project Review Committee to look at projects to be dropped, but told the captains of the industry that poverty alleviating projects will not be cut as minerals revenues dwindles.
Dr Taufila Nyamadzabo, Secretary for Economic and Financial Policy at the Ministry of Finance and Development Planning said that between now and July, they will know which projects are going to be shelved.
“We are going to look at the projects carefully and even prioritise,” Nyamadzabo told the annual First National Bank of Botswana (FNBB) post budget briefing at the GICC under the topic ‘Global Crisis Impact on the 2009/10 budget’.
“We are going through the process of reviewing which projects will be cut and maintain the growth enhanced type of projects. It is not easy to say which ones will be dropped at this moment,” he added.
The FNBB briefing brings together stakeholders from various sectors of the economy to discuss and analyse the social, political and economic implications of the budget allocation for the year under review every year.
Nyamadzabo’s comments come after Baledzi Gaolathe, the Minister of Finance and Development Planning silenced critics and presented an expansionary budget that saw government increased development expenditure to P10.56 billion that will see major public works going ahead.
Most economists predicted that government will tighten the belt on expenditure and announce a smaller budget amid the current financial crisis so as to avoid drawing from foreign exchange reserves.
Economists warned that an expansionary budget will widen the government deficit now expected to be over P13 billion if the budget makes it through parliament.
Gaolathe hinted that the budget will be financed by borrowings and drawing from foreign reserves that have accumulated over the years. Government foreign reserves amounts to P34 billion while Bank of Botswana Certificates (BoBcs) accounts to over P18 billion and the rest of the liabilities for the private sector hands.
“If you are in the construction sector, you ought not to be worried. Public works will also be selective and labour intensive projects will be left for poverty alleviation,” added Nyamadzabo.
The labour intensive projects in the construction industry that would be continued despite the crisis are the ongoing airports and dams projects.