Monday, July 15, 2024

Matsheka’s sugar tax is harmful policy

The specific amounts that Finance Minister Matsheka proposes to allocate to various ministries and  departments through his 2021/ 22 Budget are, when all has been said and done, largely  moot. We should rather focus on the extent to which the Finance Minister plans to get to grips with the weighty matters of lifting Botswana out of the ravages of the coronavirus.    What matter most in that regard, are the policy objectives that he seeks to implement to generate economic growth and job creation. Those are indeed the overriding priorities of our time. 

When presenting last year’s budget, Matsheka did well to underscore the fact that we are at crossroads. That being the case, he implored us to acknowledge that the path to a high living standard for Botswana can no longer be anchored on repeating the same failed policies over and over again.  We could not do so and then expect different results. At that time, he appropriately sounded a note of caution to the effect that a business-as-usual- approach would not take Botswana far. Unfortunately the coronavirus struck and put paid to any reforms by the then new finance minister. So because of the pandemic, we will give him some little benefit of doubt but not much because we do not have the luxury of time.

 It is instructive that for the 2021/22 budget, Matsheka in a sober manner, breaks the grave news about our financial and economic situation. He states that “Our national income has been reduced, and as a nation we have become poorer than we were before COVID-19”. He also adds “… we had accumulated financial buffers that enabled us to quickly respond to and mitigate the negative economic impact of the pandemic. But these have now been depleted and need to be rebuilt, so that we are well placed to deal with potential future shocks”. 

At this point, many of us can relate directly to Matsheka’s lamentation of the nation getting poorer than it were before COVID 19. Our friends and relatives have indeed either lost jobs or livelihoods. Consequently, lives have been turn upside down. People have been displaced and now find it difficult to meet financial obligations including mortgage and rent. 

This is all down to a truly devastating virus whose origins we are told is unknown. We are reprimanded for merely broaching the subject of where the virus started. While we have disease names such as German measles , Ebola and Spanish flu, this time around the priority for the global elites is to assuage China although the latter is not doing much help the world understand  how the virus was initially handled in Wuhan.  In the greater scheme of things, China’s international image is more important than anything else and in Joe Biden they have found the man to prop it up. It’s not clear whether Biden is going to also expunge German measles from the lexicon to protect the sensitivities of Germans. But back to Matsheka.

So while Matsheka’s analysis of the economic problems we face and which have been exacerbated by COVID is concise, he make no sense at all to impose a sugar tax on a struggling businesses and consumers. This is an ill-considered move that is going to discourage investment and job creation.  It is an unnecessary own goal. 

The minister   has also not made a good case for the sugar tax or any tax for that matter.  For the sake of job seekers, he needs to go back to the drawing board and conduct a proper economic impact assessment of his job killing sugar tax.  

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