Sefalana Group Managing Director (MD), Chandra Chauhan last week opined that the 2016/17 national budget will not do much to attract foreign direct investment (FDI) as there has been no change in government’s fiscal policy.
Speaking at a budget review session organized by First National Bank Botswana (FNBB) under the theme “Impact of the budget on the business and investment climate,” Chauhan said there was nothing new in the 2016/17 budget other than the economic stimulus package (ESP). He however acknowledged that the ESP will release new money into the economy and result in increased employment creation, as a number of the targeted ESP projects will be reserved for citizen and youth companies.
“The ESP programme is very welcome as there will be an injection of capital into the economy, which will restore needed infrastructure back to an acceptable levels and facilitate efficiency in businesses,” said Chauhan.
“Hopefully this will lead to an increase in consumer demand, thereby fueling growth in the economy. For the business community, it is encouraging that government has recognized that the economy has been under great strain because of power and water shortages.”
He further said capital expenditure under the development budget and ESP will result in improvement in services being offered, which will go a long way towards normalizing business conditions in the country. Chauhan also acknowledged a number of initiatives that are being considered by government, such as reserving 15 percent of minor maintenance budget for youth led companies; as well as the directive issued under the Economic Diversification Drive (EDD) for government and parastatals to increase procurement of local goods and supplies, saying they will increase business confidence. Other initiatives that will improve business confidence and result in heightened economic activity include infrastructure development projects aimed at addressing water and power shortages; Local Economic Development (LED) projects aimed at creating jobs; as well as creation of Special Economic Zones (SEZs) and Public Private Partnerships (PPPs) for land servicing in many parts of the economy.
“These could result in increase in employment and bring more money into the economy, which in the long term will go a long way towards attracting new investments into local industries. In the long term, we anticipate increase in local production of essential goods and services,” said Chauhan.