Thursday, October 29, 2020

Three sectors make the cut in Gov’t s new Covid-19 budget

Following the impact of the Covid 19 pandemic on the domestic economy, the Botswana government intends to spend atleast P1.3 billion on expenditure related to what would be the second round of financial assistance towards the business sector.

Already plans are in place to create an Industry Support Facility (ISF) under the existing Covid 19 Relief Fund that is located at the ministry of Finance and Economic Development.

The ISF will be used to allocate the P1.3 billion amongst three ministries – Trade, Tourism and Agriculture who will in turn disburse it as working capital to companies in their respective sectors.

MITI gets the largest share – a billion Pula

Under the plan, P1.0 billion has been proposed for the Ministry of Investment, Trade and Industry which is expected to spend P100 million on the informal sector while the general business support figure has been pegged at P900 million. During the first round of the economic relief, MITI’s sister ministry – Finance and Economic development pegged the COVID-19 Economic Stabilisation Plan expenditure at P4 billion while MITI itself says it had set aside P10 million for informal traders as loans through the Citizen Economic Development Agency (CEDA). However, just under a month ago, Francistown West Member of Parliament – Ignatius Moswaane told Parliament that “its been over two months” since some informal traders in his constituency have lodged their applications with CEDA for financial assistance but to no avail. This was after Selebi Phikwe East Kgoberego Nkawana had asked the government to apprise Parliament on CEDA-SMEs credit relations since the arrival of Covid-19. When responding to Moswaane, Trade and Investment Minister Serame said that she is not up to date on reasons that could have caused delay to assist the informal sector.

She also told Parliament that CEDA has identified 1550 SMEs which were adversely affected by the Covid-19 pandemic. The SMEs in question, Serame said, have been given repayment holidays from April 2020 for a maximum of 12 months.

Tourism Sector – Lost P6 billion, given P200 million

The second highest beneficiary on the second round would be the Ministry responsible for Tourism which has since been classified as the ‘hardest hit’. In the ISF plan, P200 million has been proposed to support the tourism sector which early estimates shows that it will lose over P6 billion in revenue. Already tourism sector players have made suggestion to the Botswana government amongst them seeking assistance with guaranteed loans, lease fee as well as tax holidays. The companies in the sector have also asked the government to avail a wage subsidy intervention until next year peak season (April 2021). On the other end, the Botswana Tourism Organisation – a government agency established to promote tourism in the country has been asked to consider waiving fees for participation at international marketing fairs for the next two years of recovery. The industry also wants the Department of Tourism to issue a bed levy payment break, “at least for a year because there are no prospects of return to normality during the year 2020”.

Agriculture – Farmers to share P100 million

Small stock, Horticulture farmers and other agricultural services providers should expect to receive atleast P100 million from the ISF according to Finance and Economic Minister Dr Thapelo Matsheka. During the first round, the government is reported to have provided P200 million through the COVID-19 Relief Fund to the Botswana Agricultural Marketing Board (BAMB) for purchasing grain for the strategy grain reserves. The Agriculture ministry also told the just ended session of Parliament that it bought farm produce valued at just over P14million from smallholder and commercial farmers in all the ten districts since the first lockdown.

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