Local producers were this week rubbing their hands gleefully in anticipation of a windfall after President Lt Gen Ian Khama announced that he will be going on a “buy Botswana” spending spree.
Khama announced at a Botswana Democratic Party (BDP) Special Congress in Gaborone Saturday morning that government will start buying locally produced goods in a bid to boost the economy and create jobs. He revealed that Cabinet has started working on an economic programme which will concentrate on stimulating and diversifying the economy as well as accelerated employment creation.
“We will use our money to buy from Batswana.” He said the country spends about P800 million to procure locally available goods for government institutions including Botswana Defence Force, Botswana Police Service, government hospitals and schools. He says government will not start buying directly from local producers whether they are commercial or not before they can start looking outside the country.
This is part of the planned Economic Diversification Drive (EDD) which will be implemented under the watch of a special unit to be made up of 36 people.
He explained that the country was projecting another budget deficit next year due to the global decline in commodity prices. The situation is not helped by the fact that the country is currently grappling with drought, economic recession, and water and electricity shortage.
Despite the projected budget deficit, government is planning an expansionary budget in a bid to stimulate the economy. He explained that if they were to continue cutting back on project expenditure the economy would stagnate. Instead government will now go on a massive construction spending spree.
Khama said the economic stimulus budget would be spread in all areas; building construction, road construction, tourism development, increased agricultural production and manufacturing.
So far the Ministry of local government is looking at building 1280 ablution blocks, a number of kgotla offices, internal road construction and maintenance projects. The program is billed to start this year. Millions of pula has been set aside to service 3160 plots. &11 houses will be built under the programme while 4480 houses will be built under the Botswana Housing Corporation.
Khama had earlier told the party that government will draw down from Botswana’s foreign reserves to finance to finance all projects that have been suspended due to the economic recession.
Official figures show that as at the end of 2014, the reserves had increased by 16.7 percent from P67.8 billion recorded a year earlier, due to net foreign exchange inflows and the depreciation of the Pula against major international currencies. The reserves were sufficient to cover approximately 18.5 months of imports of goods and services.
As at April 2015, the reserves were P89.4 billion, the equivalent of 20 months of import cover.
Khama’s move to tap on foreign reserves for the substantial developments dominated the agenda of the special congress. Khama’s target will be mostly rural areas believed to be the BDP stronghold.
Khama assured party members that all budgets submitted by the councils would not be cut and even encouraged councils to ask for supplementary funding in cases where there is shortage of money to complete pending projects.