Thursday, October 1, 2020

“Disposable income has effectively gone down” ÔÇô Cypionka

The Director of the task force set by President Festus Mogae to advise government on improving the economy Nick Cypionka says this year’s budget is a departure from previous ones in that it sets the platform for a change of mindset in the way government conducts its operations.

He said this year’s budget has a “high degree of looking forward.”
He however said he is worried that the 6 percent salary increase announced by Minister of Finance Baledzi Gaolathe effectively means that in real terms public service salaries have gone down.

“This has had the effect of diminishing workers’ disposable income.”
Speaking at the FNB 13th annual budget breakfast seminar, Cypionka said this year’s budget has the potential to change Botswana’s course for development.

“The budget could have been boring. All budgets are boring. But the important thing is that the budget has concentrated on growing those areas where Botswana has real strengths in relation to its neighbours,” he said.

He said to achieve the goals spelled out there will have to be structural changes in government going forward.

Botswana’s past successes, he said, have had a negative effect of self satisfaction which has brought everything to a standstill.

It was this self satisfaction and complacency which has brought about the slump in the country’s international competitiveness.

Botswana has plunged four points down in international rankings on competitiveness.
“Botswana’s competitiveness plunged not because the country became worse but because other countries improved,” said the fast talking economist.

He said spending on its own will not bring desired results, unless such spending was done effectively as to improve efficiency.

He said more emphasis has to be placed on achieving the goals.
In the same breath he said Botswana should change its inward looking approaches and become more outward looking.

He said the huge capital investment projects announced by the minister will need a change of mindset on the private sector’s side if they are to bring positive results.

He said it is however reassuring that there has now been a shift from consumption to capital investments. The rules of engagements between the government and the private sector have also been made simpler.

In that score he said there is need for reorientation of the country’s immigration policy.
He said instead of concentrating on whom to allow into the country, more emphasis should be on who to attract into the country.

This is a key recommendation that the Business and Economic Advisory Council has made to government; a recommendation that Government has accepted, said Cypionka.
He also talked about how Botswana has a lot of resources and potential that remains underutilized.

One such area, said Cypionka is the tourism sector.

Concentration on the high end of the tourism sector has led to a neglect of the potential that exists in the middle rungs.

Another area that is untapped is the country’s cattle industry potential.

He said with proper focus, the agricultural sector could be turned around in five years to become one of the leading contributors to the country’s GDP.

Cypionka was equally optimistic about the recent reshuffle announced by President Festus Mogae, saying it will give more impetus to project implementation.

He gave as an example the diving into two wings the Ministry of State President, with one arm specifically tasked with implementation inside government.

“There is a commitment to change. There is a commitment to increase the private sector’s contribution to the overall GDP. The road blocks that have been there all along are finally coming down.”

He continued that the Public Private Partnerships show a willingness on the part of government to listen to the private sector.

“I am elated that there is a departure from the old and parochial way towards looking at the world as a market,” he said.

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