Monday, October 26, 2020

What is the nature of ESP?

In presupposing the after effects of the Economic Stimulus Programme (ESP), pundits expect the economy to continue sustaining activities and projects spurred by deliberate government spending, but however cite the lack of details about the programme as a huge impediment to appropriately determining its sustainability.   

The state of the nation address (SONA) presented by the President on Monday afternoon described the ESP as a holistic action plan that will among other things reboot the economy to ensure urgent delivery of projects, accelerate land servicing and promote economic activities in rural areas. However, according to economic analysts, the SONA failed to expound on the President’s initial announcement of ESP. 

While the growth and development path that any country can take is subject to deliberation, it must ultimately reflect a benefit that far exceeds the cost. A proponent of Africa’s growth posited two types of expansionary forms that economies can use to activate their growth; “big bang” stimulus and “acupuncture” stimulus. This article will consider both types of stimulus in a bid to identify which one might be best suited for Botswana in terms of ensuring sustainable growth and development. 

The big bang stimulus is known to cause a rapid and explosionary impact on the economy. The recently announced ESP could be viewed as a big bang stimulus, as it is anticipated to stimulate the economy for accelerated employment creation and diversification; targeting tourism, farming, construction and manufacturing as the main hubs of activity. The expected activities and projects suggest both an immediate and rippling impact which it is hoped would overturn the current economic stagnancy.

An acupuncture stimulus on the other hand involves triggering the economy through different pockets of activities which as a whole add up to spur the entire economy. Contrary to the big bang stimulus which lumps activities to a specific period of time, an acupuncture stimulus does not restrict activities to a single period of execution. Because of its specific target sectors ESP demonstrates traits of an acupuncture stimulus. Generally, economists recommend that the activities to be undertaken must derive maximum economic value to the country against the cost that is anticipated to be incurred.

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