Wednesday, July 6, 2022

Reduced gov’t involvement creates space for private sector

A University of Botswana senior economics lecturer, Dr Jonah Tlhalefang, has said reduced government involvement in the economy created a window of opportunity for the private sector to grow and meaningfully participate in the country’s economic development.

This is especially so given that in the past government has dominated the business space and thereby stifled private sector involvement in steering economic development.

Addressing a budget breakfast meeting hosted by Stanbic Bank Botswana in Francistown, Tlhalefang said government’s involvement in business in 2012/12 is estimated to reduce to 33.2 percent and thus opening a window of opportunity or void that the private sector should fill as the country intensifies its economic diversification drive.

Tlhalefang bemoaned that the Botswana economy continues to heavily rely on minerals revenue, adding that such revenue should be used to stimulate economic growth in the non-mining sector.

He observed that there are serious risks to the international economy underpinned by the Euro Zone crisis and anticipated slowed growth whose implications for the Botswana economy included reduced export revenue and squeezed spending in order to avoid a huge deficit as the country strives to balance its budget for the 2012/13 financial year.

Despite a looming double dip recession, the Minister of Finance and Development Planning Kenneth Matambo unveiled a budget with a projected modest surplus of P1.15 billion for 2012/13 from the huge deficits of the three previous years.

Tlhalefang also noted that Customs and Excise has overtaken the minerals sector in its contribution to government revenues, adding that there are no tax changes in the 2012 budget and thus the structure of incentives remained unchanged.

Welcoming guests at the meeting, Stanbic Bank Botswana managing director, Leina Gabaraane, warned that fragile economic recovery called for prudent management of the economy, especially that there are fears of a looming double dip recession.

The Managing director of Khupe Group of Companies, Duduzile Khupe, echoed the same sentiments like Gabaraane of fragile economic recovery, adding that that notwithstanding all was not doom and gloom as there is always a silver lining to every dark side.

She said although the looming recession posed risks to businesses, it nonetheless presented opportunities which should be optimally exploited. Khupe called on businesses to devise strategies to stave off the imminent threats and ensure viability as well as sustainability during the anticipated hard times.

Dr Kgosidialwa Mompati of Tati River Clinics observed that the budget was positive because of the reduced deficit and projected surplus in the coming financial year, adding that the budget has not neglected the agricultural sector and the poor.

He, however, decried that the Ipelegeng programme is not skills enhancing but it was rather comforting that the government is not neglecting the rural poor by implementing such schemes.
He proposed that government should scrape off VAT on medical expenses, especially consultation and procedures.

On the removal of the HIV budget from the Ministry of State President to the Health Ministry, Dr Mompati proposed the setting up of a Ministry of Infectious Diseases while the rest remain under the ambit of the Ministry of Health to deal with the other many rampant diseases like hypertension and diabetes, which are killing a lot of people.

He noted that the creation of such a ministry would help maintain the momentum in the fight against HIV and other problematic diseases.


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