Choppies Cookoff

Business Botswana attacks defence spending

SHARE   |   Tuesday, 02 February 2016   |   By Staff Writer
Business Botswana attacks defence spending

Business Botswana recognises that the fiscal environment under which the 2016/17 Budget Speech was prepared is unfavourable with projected revenue lower than expected. This also coincides with a down turn in the Southern Africa Customs Union (SACU) revenues. The fiscal “envelope” is therefore shrinking and putting government under pressure for the second year running. This situation is worrisome and we hope that it represents a cyclical swing and not a trend. However, we commend the Minister for striking a reasonable balance under these circumstances.


Value for money
It is doubtful whether spending in the 2016 budget focuses on high return projects because of the lack of cost benefit analysis. As a result spending in some cases does not seem to be carefully prioritised to ensure prudent spending of scarce resources. A typical example is the fifty percent (50%) increase in the defence spending when everything is squeezed.

Enabling Environment
The need to create an enabling environment for the private sector to thrive has not been clearly defined and we therefore recommend a medium term review to ensure the creation of a conducive business environment. In addition, the budget should in future expand the use of local funds to stimulate capital markets.


Special Economic Zone
Business Botswana appreciates steps being taken to introduce Special Economic Zones (SEZ) in order to promote economic growth and job creation. However, details on steps being taken to improve implementation of the Special Economic Zone Authorities (SEZA) need to be provided. Business Botswana expected the implementation of the SEZ to be fast tracked under the Economic Stimulus Program (ESP).


Role of the private sector
The budget should have reaffirmed the role of the private sector as the engine of economic growth. In that view, we had expected the Minister to highlight measures to engage the private sector to manage projects to avoid cost over-runs and delays. There is need for an innovative and clear strategy to grow the economy. This strategy should be anchored on the private sector as the engine of growth while government focuses on policy making and regulations.

Economic Reforms
Going forward, a properly resourced economic reform agenda should form part of the budget speech to avoid situations where those who have been charged with implementing key reforms decry the lack of budgets for their activities.

Privatisation
We note with appreciation the ongoing Botswana Telecommunications Corporation Limited (BTCL) Initial Public Offering (IPO) and its expected role in deepening capital markets as well as empowering citizens. That notwithstanding, we look forward to more IPOs of state owned enterprises in the future as well as the enactment of Citizen Economic Empowerment (CEE) policy.

Conclusion
We encourage the government to re-double efforts in resolving the water and power situation by roping in private operators as a way of popularising Private Public Partnerships (PPP). Business Botswana also notes the looming drought and recommends the inclusion of private operators such as animal feed & vaccine suppliers, agricultural technologies and truckers in the delivery and management of the drought relief programmes.