Sunday, June 11, 2023

‘Government’s national budget bonkers’ – Jefferies‘

Keith Jefferies responded angrily at the government’s intended spending during the next fiscal year that begins in April, saying the doubling of the budget was bonkers given the fact that the country is faced with long term challenges.

Jefferies, former deputy Central Bank governor, last month went on record as saying government must consider whittling-down its spending and save for the long term challenges when the Debswana diamond mines would be depleted.

“Such kind of spending is not necessary and it does not make a rational idea. I do not think that it is rational to ramp up such kind of spending in one year,” he said at the First National Bank of Botswana’s budget review of Tuesday.

Finance and Development Minister, Baledzi Gaolathe, on Monday was bullish about the government’s intended spending in the next financial year moving the national development budget from P 4 billion to P 8.5 billion for the next fiscal year.

However, the country’s most respected independent economist said the country needs to start a serious culture of saving given the factor that the Debswana mines will be depleted in the next two decades.

Jwaneng, Damtshaa, Orapa and the Letlhakane mines, put together, account for 33 percent of the Gross Domestic Product, over 55 percent of government revenue and 70 percent of exports, making them the back-bone of the economy.

However, all the mines are expected to go underground by 2021 and ultimately closing down by 2029.

He also questioned government rationale of setting the budget spending high while it knows that it has no capacity to spend. In the current budget, which comes to an end by March 31, government has only managed to spend about 18 percent of the money and the rest was returned as a budget surplus.

“Government spending did not grow fast enough because of the implementation capacity problem. In the future, it would be better to have planned surpluses rather than unplanned surpluses,” he said.

He said one of the biggest challenges that the government failed to address in the budget was the issue of power outages, which are currently crippling the economies of the southern African region and Botswana in particular.

“The budget is silent about what they are doing about the situation or what their future plans are. Electricity demand has been growing at eight percent which is higher than the economic growth. In 2010 we will see a serious crunch as EskomÔÇö the South African electricity supplier and distributorÔÇö will make a huge cut in power supply,” he warned.

Speaking at the same occasion, the Chief Executive Officer of Botswana Insurance Fund Management, Victor Senye, urged government to go into the open market to get the necessary skills and, where possible, team up with the private sector for the development of the country.

He complained about delays in the implementation of government projects, such as the upgrading of the airports, positioning Botswana as a regional hub for dry land port/cargo handling, failure to address the bad road situation, which is rendering the country uncompetitive against its neighbours.

“We have taken far too long to upgrade our major airports and LivingstoneÔÇö in Zambia ÔÇö has just completed its upgrading which poses much competition for Air Botswana,” he said.

Government intends to inject over P 100 million in an attempt to revertilise Air Botswana to become competitive against its peers in the region.

“We should not lose an opportunity to be a major hub ÔÇö dry land port hub ÔÇö to Namibia while we have the facility here. We need to address the issue of the bad status of our roads, some of which have deep potholes deep enough to even bath a child in,” he said.


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