Views have been varied on the recently announced Economic Stimulus Package (ESP), with some hailing it as the long awaited intervention while others - especially the opposition parties - dismissed as a desperate act of government doing all its best to hang onto power. President Ian Khama took the country by surprise when he announced the ESP at last weekend’s Botswana Democratic Party (BDP) Special Congress saying for the first time the country will deep into the Foreign Reserves in a huge spending that would spur the sluggish economy.
Though the finer details of the scheme were to be finalised, Khama said the package targets tourism development, agricultural production, construction of buildings and roads as well as manufacturing. In this respect key elements of the package include: Fast track land servicing, with 37,000 plots to be catered for in the coming year; Construction of 4480 new housing units by the Botswana Housing Corporation (BHC); Construction of an additional 1664 teachers quarters and 534 nurses quarters; Construction of 144 classrooms and 92 labs; Construction of new roads, as well as bypasses in Francistown, Molepolole and Lobatse; and Upgrading of 92 health posts into clinics.
This monumental construction blitz has left tenderpreneurs tripping with excitement as they line-up to win the tenders to construct the unveiled infrastructure. The local construction industry has suffered drastically from cost cutting measures which saw government reducing development projects at height of the world’s economic recession. Many companies folded as a result as only few tenders for new projects were put up.
A new breed of tenderpreneurs – businesspeople that set up companies to compete for tenders – is expected to born and take advantage of the Government spending to enrich themselves.
However, the ESP comes against a backdrop of poor project implementation with almost all Projects tending to have cost overruns, and taking far longer to complete than initially planned. Economists who were interviewed this week have however given the Government’s decision thumbs up though insisting that more clarity was required on the quantum that was to be drawn from the Reserves. They acknowledge that it is normal for Governments to draw from their reserves to address immediate economic circumstances.
Economist Moatlhodi Sebabole cautioned: “The success or failure of the stimulus package in boosting economic performance will depend on a robust assessment of the cost-benefit. It also has to be done to the extent that it will not hurt the cushion or safety net that reserves will provide in case of recession or persistent budget deficits”.
Opposition is panicking: Ntuane
“Truth is, voices of negativity speaking out against ESP betray their sense of panic because it is set to upend the current narrative about the 2019 general elections. Before the birth of ESP a relentless campaign has been underway by the opposition to instill in Batswana the notion of inevitability of BDP defeat. On the basis of the good showing by our opposition in 2014, all and sundry within earshot were told to jump on the bandwagon of change lest they be left behind on the way to the new political kingdom dawning in 2019. Quite clearly, this optimism has been premature and exaggerated.”
No thumb-sucking please: Economist Moatlhodi Sebabole
“The success or failure of the stimulus package in boosting economic performance will depend on a robust assessment of the cost-benefit. It also has to be done to the extent that it will not hurt the cushion or safety net that reserves will provide in case of recession or persistent budget deficits”.
UDC: Moeti Mohwasa
"This is a knee jerk reaction, not well thought out. It is unlikely to bring desired results. It is simply a transfer of public funds to a handful of beneficiaries because of the history where only a few benefits from such mega projects. We do not believe we will be able to see much happening in terms of an improvement in the standard of living of the masses.
Mohwasa said it is strange that once again the BDP governement has ignored public servants and left them out despite that there is a problem of deflated purchasing power. "One would have thought they would have been considered because they have long being asking government to assist them," he said.
He argues that government should have come up with a well thoughtout strategy to address the numerous challenges in the economy. "You cannot just react to loss of popular vote by coming up with a stimulus package".
He gave the example of immigration laws, which he said are a deterrent to investors. "The issue of immigration laws where investors are closed out while others are PIed on a daily basis without any reason is not good for our economy as it scares potential investors. We are not suggesting that security should be neglected but we need to deal with these issues without raising alarm. Right now foreigners are leaving the country and investors do not want to commit to long term investment as their future is uncertain. All these things stifle the economy. As long as we do not address them the problems will always be here with us".
Mohwasa said government should embrace and promote Public Private Partnerships (PPPs) to stimulate the private sector, citing construction in the CBD by the private sector where there no cost overruns.
BCP: Dithapelo Keorapetse
"The government of Ian Khama has failed dismally on mega projects. How many have been completed within budget and schedule? How many are without structural defects and how many are dysfunctional?It is worrying to even hear that the Office of the President will oversee the implementation of the stimulus package related projects. The OP does not have any impressive record on project management, right from when Khama was vice President to when he's President . The office managed backyard grdens and the project failed dismally. Can it be trusted to oversee the proposed projects? There's a serious water and power crisis in the country as a result of poor planning and /or lack of foresight. Business cant expand under this environment, in fact some business have incurred huge losses because of this issue. How will the economic stimulus package address these issues?" said Keorapetse.
He said the intelliugence agency's interference in issuance of and residentce permits as well as visas is a problem. The unwarranted delays and rejections of work and residence permits and visas has affected FDI and tourism, he added.
Keorapetse said the problem with these political posturing announcements is lack of clear measurable deliverables or quantifiable targets. "How many sustainable long term private sector jobs will be created in the short, medium and long term? By how many percent will poverty levels be reduced? By how far will the income and wealth gap be narrowed? What about corruption, will the stimulus package turn out to be coruption stimulus package with nothing said about this social ill?" he asked.