A local economic expert is predicting that there would not be any noticeable change in terms of priorities for funds allocation, when the finance minister Kenneth Matambo unveils he 2015/16 budget on Monday.
When briefing the media early this week on budget expectations given current economic challenges, Dr Grace Tabengwa – a Senior Research Fellow at Botswana Institute for Development Policy Analysis (BIDPA) – said Botswana growth trajectory will be low at about five percent, saying growth risks recognises prevailing global and domestic risks.
With total expenditure projected at P51.5 billion in 2015/16 from the estimated P49.3 billion recorded in the last financial year, Tabengwa said budget resources should be focused on attaining sustainable growth and spearhead growth momentum under a fiscal binding constraint.
Of the total, recurrent expenditure is expected to increase slightly to P40 billion which will be accounted for by the increase in personal emoluments whereas development expenditure is estimated to reach P12.6 billion.
The proposed budget envisages a small surplus of P1.4 billion of 0.8 percent of the GDP. Tabengwa said total revenue and grants are projected to reach P52.8 billion, an increase of 5.3 percent from the proposed 2014/15 estimate of P50.2 billion.
Furthermore, she said despite the projected budget surplus during the upcoming financial year, the net financial assets position remains negative as a result of accumulated budget deficits from the financial crisis period.
The share of the proposed budget for the ensuing fiscal year to GDP stands at 31.4 percent which, according to Tabengwa, is close to the limit of 30 percent that government committed to achieve in NDP 10.
Reflecting on the Budget Strategy Paper (BSP) National budget Priorities for the 2015/16 financial year, Tabengwa said there is the need to consolidate on-going projects and minimise spillovers while implementing projects and maintaining the existing infrastructure.
Other priorities in the BSP include total factor productivity as well as enhancing business environment.
During the 2014/15 budget, the recurrent budget allocation stood at P33.3 billion, an increase of P2.7 billion or 9.1 percent increase over the 2013/14 budget.
The larger beneficiary of that budget was The Ministry of Education and Skills Development at 27.8 percent. The top recipient of the past development budget was the Ministry of Minerals, Energy and Water Resources (MMEWR) with a share of 29 percent or P3.5 billion. This is because during that period the ministry had projects to undertake which included the service and maintenance of Morupule B Power Station, completion of dams such as Dikgatlhong and Thune as well as the oil storage.
In an interview on Thursday, the CEO of local businesses’ conglomerate – BOCCIM – Maria Machailo-Ellis said they are hoping for an increased development budget to push for more job creation.
“The key focus that we expect is on job creation simply because unemployment rate particularly among the youth has become a source of income for everyone,” she said.
To achieve this, she said, the government should support the private sector which has the potential to provide more job opportunities and as such the development budget should be considered for increment.
By job creation, Machailo-Ellis is not referring to stopgap interventions such as the Ipelegeng project, which has become one of the government flagship initiatives to address unemployment but rather sustainable ones.
Machailo-Ellis feels that the private sector should be the one leading in the creation of jobs but only if it is empowered by the government through formations of models such as Public Private Partnerships (PPP).
She said it is through arrangements such as the PPP that the government could augment the income through the use of the private sector and development budget, which will allow the government to go full force in developing infrastructure.
Machailo-Ellis said as BOCCIM they believe there are areas of priority, which need to be addressed being water and energy. She suggested that government should devise ways to partner with the private sector to develop the energy sector.
Ellis explained that in the past there were good initiatives and reforms proposed but the government took a very long time to execute them. “Going forward we expect the government to take reasonable time to implement these reforms,” she said.
She, however, praised the consultative process adopted by the government as a good initiative that will improve the budgeting process and urged government to act on the input provided by the stakeholders.