Executive Director of BIDPA (Botswana Institute for Development Policy Analysis) Dr Happy Fidzani says the budget outlined by Minister of Finance Baledzi Gaolathe this past Monday is a positive step in the right direction because it shows a deliberate bias towards development.
BIDPA is an independent research body focusing on public policy.
Minister Gaolathe announced a development expenditure of P7.26 billion, a significant increase over last year’s P5.8 billion.
A significant amount of the development budget will go towards financing HIV/AIDS programmes.
Speaking at the FNB’s 13th annual budget breakfast seminar Dr. Fidzani said this year’s budget should be looked against the backdrop of a continuing trend that government wants to reduce the recurrent budget.
The recurrent budget goes mainly towards the financing of public service salaries.
Dr. Fidzani said there is a discernible and deliberate strategy on the part of government to make the economy grow.
He said in the same token there is also a deliberate undertaking on government to contain inflation, underscoring the fact that the private sector thrives in an environment of low inflation.
Fidzani said looking at the allocation pattern made to ministries, government is clearly trying to invest its money on wealth creation and production growth.
He gave as an example the fact that government will borrow money to finance the construction of a new university at Palapye as a prime example of a government that wants to create a high quality human resource base.
“Education and training which are given priority on the financial allocation will play a large role in as far as creating future production capacity,” said Dr Fidzani.
He also said the large amount of money allocated the HIV/AIDS programmes under the Office of the State President also indicates that government is determined to keep the human resources that already exists.
“The quality of the population has a significant bearing on the production capacity in the same way as has the physical infrastructure. Spending on HIV/AIDS programmes has the impact of maintaining the current human stock that the country already has” he said.
Dr. Fidzani was however not as upbeat with the amount of attention government is giving the Ministry of Works and Transport, under which falls the construction of roads, public works and other related development infrastructure.
Despite its potential to be an economic growth stimulant, the Ministry of Works and Transport comes third after that of the State President and Local Government in the development budget resource allocation.
“Works and Transport is third in allocation yet this is a key ministry in generating growth,” he said.
Looking at other positive aspects of this year’s budget, Fidzani, formerly an economics lecturer with the University of Botswana said it is reassuring that this year’s budget shows a growth on the non minerals sector.
“That is very important because it shows that economic diversification is finally bearing results.”
This year the non mineral sector and the Value Added Tax have contributed 22 percent to GDP which Fidzani said “is a big jump” in the right direction.
He however said there are missing points in the budget.
He would have expected a clearer tone on the direction Public Private Partnerships (PPPs).
PPPs, he said would not have come at a more opportune time given the large borrowing expected against the construction of a new university which will cost in excess of P5 billion.
“There is also no clear articulation to prepare for the World Cup by way of renovating airports,” said Fidzani.