Jefferis attacks the return of the Blue train, saying it will gobble funds with no return.
Two weeks after the Minister of Finance and Development Planning Kenneth Matambo presented the 2016/17 financial year budget, debates and discussions surrounding the budget continued this week as experts gave insights of what is likely to come out from the proposed budget. On Tuesday, Molepolole Business Council held a budget review session with University of Botswana senior lecturer Obonye Galebotswe giving a presentation. Botswana Accountancy College followed on Friday with its National Budget Symposium where invited speakers included Econsult Managing Director, Dr Keith Jefferis and Business Botswana Acting CEO, Dichaba Molobe.
Jefferis said on Friday that the 2016/17 budget was developed against a challenging economic background due to declining commodity prices. He said the decline in prices not only affected Botswana, but several other developing countries. Challenges that Jefferies said the minister encountered in developing the budget was the desire to maintain microeconomic stability and to keep with the demand for the government to increase spending as a means to give the economy a boost. With regards to the budget deficit, Jefferis said it could have been much smaller had it not been of the increase in defence spending as well as the Economic Stimulus Programme (ESP).
He further questioned the government’s appetite to put money in projects that do not guarantee return on investments, giving examples of the return of the passenger train and the construction of the Okavango-Mamuno Bridge as some of the projects that will gobble government coffers with no return. For his part, Business Botswana acting CEO, Dichaba Molobe implored the government to have an open mind towards foreigners who wish to invest in Botswana by removing the red tape. He, however, said the introduction of the Special Economic Zones should be commended as it will help create job opportunities and support growth.
Speaking at the business council review, Galebotswe expressed some optimism about the current budget saying more jobs are likely to be created through the Special Economic Zones (SEZs) but said job opportunities will mostly be in the medium term to long term as he believes the country does not have most of the skills required for the activities in the Phase I of the project. The Phase I of the SEZs three sites – the first being the mixed-use near Sir Seretse Khama Airport comprising international diamond activities, auto components manufacturing, agro-processing, pharmaceuticals, and general manufacturing; the second site under the Phase I is the Gaborone Fairgrounds’ financial services. The last site targeted is the Pandamatenga Integrated farming, agro business and food processing.
Activities under the Phase, according to Matambo, are said to be at various stages of implementation and forms part of the 2016/17 financial year’s budget. The sector which Galebotswe feels more jobs will be created from is the construction one but cautioned that the risk to these jobs may come from fronting, corruption and rent-seeking where those who win the tenders employ foreign labour. Galebotswe also questioned government spending on the strengthening of human capital, arguing that though the government has shown commitment towards the same, there is no strategy put forward for the efficient use of resources.
He said large sums of money have over the years been thrown into education, but poor results and problems of skills shortage amid unemployed graduates still persist with people equipped with vocational skills still roaming the streets.