Thursday, July 18, 2024

There is need for a public debate on the state of our public finances

There is no point trying to pretend that the economy of Botswana is as strong as it used to be.
The global economic crisis aside, the fact of the matter is that diamond sales are no longer as strong as they used to be.

Long before Botswana became a victim of global economic downturn, there were indications that unless something was done to correct the underlying structural defects of our diamond mining industry sooner or later we were going to see ourselves engulfed in a national economic thunderstorm.

The long postponed debate on the effects of going underground in many of our diamond mines cannot be postponed any further.

It is high time authorities became honest and upfront about what the effects of going underground will all entail. There is also a need for the authorities to share with the nation on what deadlines we are talking about with regard to going underground.

Anything else would amount to exactly the kind of a denialist mentality that drove us to insanely believe that somehow Botswana was going to be immune from the global downturn even as it was clear from the onset that the people who had always been the major buyers of our diamonds were themselves engaged in life and death struggles when their economies experienced a meltdown.

Even before going underground in our mines, extracting the goods from the grounds has become a very expensive undertaking. This has eaten on the margins thereby reducing the profitability of our mines per carat.

It will only get worse with time as the depths of our mines substantially increase.
The upshot of the whole thing is that Botswana’s economy is no longer as strong as it used to be.
Unfortunately, even as our finances have plummeted, our expenditure as a nation has either remained high or, in some worse cases, actually increased.

This cannot go on forever before we hit the wall. We have to wake up to the reality that we have to change with the changing times.

There is also a problem with regard to our priorities.
As a nation, we have been reluctant to accept the painful truth that what used to be good for us, or that which served us so well over the many past years cannot for ever be in our interest.
Just as we have been reluctant to adapt to new times, we have also been slow in rearranging our priorities.
It has also come to light that there is a somewhat pervasive failure by our leaders, especially in the civil service when it comes to applying the rules of accountability.

Money is splashed in exactly the same wanton abandon that used to characterize our lifestyles when Botswana was the fastest growing economy in the world.

While our leaders preach belt-tightening, it does not appear to us that they are themselves wearing any belts.

Otherwise how would it be possible for them to do the kind of things that are raised by the parliamentary Public Accounts Committee as reported elsewhere in this paper?

If our leaders were aware of the gravity of economic troubles at hand, how on earth would they be doing the kind of things that are unearthed by the Auditor General in this era of difficult economic times?

While in the past money availability used not to be a problem for Botswana, it has all of a sudden become a big issue.

All these are the ground truths that come out very succinctly in the just published report of the Public Accounts Committee.

The lack of money comes at a time when as a nation we are still grappling with issues of capacity ÔÇô a problem that as we all know has historically dogged Botswana, a problem that as we all know we are still far from overcoming.

The difficulties that our economy faces do not only call for a paradigm shift, there is also a need for a genuine and open debate with regard to where we are going.

Excessive debt, which we seem to be plunging into, has to form a part of that debate. Government and the Bank of Botswana have to be honest about the reserves, including the projections.
Enhancing productivity should also be discussed.
New streams of revenue have to be found.

But above all there has to be a call for political will on the party of our leaders with regard to curbing costs on their lifestyles.


Read this week's paper