Thursday, February 22, 2024

Govt bets on a P64 billion Public Investment Programme

Parliament has approved the Transitional National Development Plan (TNDP) draft to be implemented in the beginning of the fiscal year in March. The two year plan has an estimate budget of P64.07 billion, making it the largest development budget in Botswana’s history.

In December, legislators approved a two year TNDP for financial years 2023/24 and 2024/25, pushing the National Development Plan 12 (NDP 12) which was supposed to begin in March 2023 to be postponed to 2025/26 financial year. The theme for the TNDP is “Towards a High Income Economy: Transformation Now, Prosperity Tomorrow”.

The transitional plan is touted as a fixer to the economic mishaps of the NDP 11, which began in 2017 and ends in March 2023. The six year plan has been characterized by a decline in GDP growth; high levels of unemployment, poverty and inequality, slow growth in exports, massive fiscal deficits that reached record low levels, and spiraling inflation, especially in the second half of NDP 11.

When NDP 11 concludes in the coming two months, it would have raked an estimated P48.3 billion in cumulative budget deficits. Still, the government intends to increase its spending through the P64 billion Public Investment Programme (PIP) which is the basis for the TNDP.  It represents the largest increase in development budget, considering that the national development budget for the current financial year 2022/2023 was P16.4 billion, with recurrent budget at P62.7 billion – bringing the combined national budget to P79 billion.

From the proposed TNDP’s P64 billion development expenditure, the government plans to spend P28.9 billion for the 2023/2024 financial year, with P19.4 billion set for ongoing projects while P9.4 billion is for new projects. For the financial year 2024/2025, the development budget has been set at P35 billion: P17.7 billion for ongoing projects and P17.3 billion for new projects.

“The PIP provides an estimate of the amount of investible resources that have been allocated to various ministries, departments, and agencies for implementation of projects and programmes aimed at addressing the national development priorities during financial years 2023/24 and 2024/25, covered by this transitional national development plan,” said State President minister Kabo Morwaeng when swaying lawmakers to approve the plan in December.

Morwaeng disclosed that the PIP for the TNDP goes beyond the fiscal ceilings set by the Ministry of Finance, but assured members of parliament that the government is committed to seeking alternative sources of finance to close this funding gap.

 “Infrastructure development remains critical to unlock opportunities for trade, value chain and export-led development, economic diversification, competitiveness increased productivity and private sector engagement,” the minister said.

He acknowledged that government has over the years experienced major challenges in project implementation, ranging from inadequate project planning, inaccurate costing, appraisal and assessment of feasibility. The poor implementation has been worsened by insufficient monitoring and evaluation of projects, resulting in cost overruns, and service provision that is below standard specifications, the minister said.

To ensure that the mega billions public investment projects are a success, Morwaeng said government will use the developer manager approach for project delivery, allowing for major public projects to be packaged and their implementation outsourced to private companies with requisite capacity to assist in addressing some of the capacity constraints that continue to undermine efforts towards successful project implementation.

“However, this model on its own will not be sufficient. There is therefore an urgent need to address capacity limitations across the board,” said Morwaeng.

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