Wednesday, May 5, 2021

Matambo remains mum on details of ESP

The Minister responsible for Finance, Kenneth Matambo on Friday said that no one, not even members of parliament can compel him to reveal the actual budget of the recently announced Economic Stimulus Program ESP).

 

Responding to questions from Bonnington South Member of Parliament (MP), Ndaba Gaolathe during the Minister’s question time, Matambo said he cannot be forced by anyone to reveal the figures involved in the ESP.

 

“I do not want to speak of any figures at this stage. I cannot talk about quantum but there shall be plenty for me to talk about at the appropriate time. I will not be compelled by anyone to reveal those numbers,” said Matambo.

 

When pressed further by Gabane – Mmankgodi MP, Pius Mokgware to at least make economic projections on the possible growth that will result from implementation of the ESP, Matambo responded, “Wait for my budget speech in February, that is when I will share on the impact of the ESP on the local economy.”

 

Earlier on, Gaolathe had wanted to know the budget projections for the much anticipated program and whether government had engaged the Central Bank (Bank of Botswana) when the decision to implement the ESP was made. At the same time, Gaolathe wanted to know measures that have been put in place to ensure that the ESP will be successful. In response, Matambo said government did not consult the BoB as there was no need to.

 

“I am not overly concerned as to whether I should have consulted some people or not. We did not consult Bank of Botswana as there was no need to,” he said.

 

The ESP was first announced by President Khama at a Botswana Democratic Party (BDP) special congress almost two months ago. However, details on the ESP have been sketchy and the public is yet to get full details of what the much anticipated economic booster will entail. The expectation was that Khama would shed more light on the ESP during his state of the nation address three weeks back, but he only repeated, almost word for word, the details that he shared at the BDP special congress. However, the President promised that government will publish a detailed brochure in due course.

 

On Friday, Matambo maintained Khama’s earlier stance that more details of ESP will be revealed in the brochure. The brochure was released on Thursday, but still contained general information on what the ESP was intended for, much to the chagrin of members of the public and business pundits who had been waiting in anticipation to see how they could tap into the much touted program. The brochure, which Sunday Standard has a copy of, contains almost the same details that were shared by Khama at the BDP special congress and during the SONA.

Meanwhile, Matambo further stressed that the ESP should not be mistaken for a panacea to Botswana’s economic woes. He also said that it is not obvious that government will use its foreign reserves to fund ESP.

 

“When it comes to funding, the focus is not only on utilization of foreign reserves… We can borrow locally and externally to fund the ESP. Since we are about to reach our external borrowing limit I can therefore say we shall borrow in the domestic market,” he said.

 

The ESP was announce shortly after 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 sales have slowed since late 2014. Available figures show that the value of rough diamond exports from Botswana’s mines fell 15 percent in the first six months of the year. The domestic economy’s past growth has been spurred by mining output which outpaced non-mining private sector growth. Unless something is done to boost the domestic economy, the future doesn’t look so bright for Botswana, as mineral revenues are expected to decline in the short-to-medium term while SACU revenues are under threat. This has resulted in loss of business confidence and a gloomy economic outlook for the country. A survey carried out by the Central Bank shows that business confidence has deteriorated from 52 percent in September 2014 to 44 percent in March 2015. As a result, government slashed its 2015 growth forecast from 4.9 percent to 2.6 percent.

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