The two wisemen, or…

SHARE   |   Monday, 08 February 2016   |   By Staff Writer
Matambo and Boko Matambo and Boko

Below we capture parts of the Minister of Finance and Development Planning, Kenneth Matambo’s 2016/17 budget speech, reflecting how the Leader of Opposition, Duma Boko responded.


MATAMBO: In many respects, the 2016/2017 budget is a transitional budget, specifically from: NDP 10 to NDP 11; Vision 2016 to Vision 2036; and the United Nations Millennium Development Goals (MDGs) to Sustainable Development Goals (SDGs). Efforts were therefore made during the preparation of the 2016/2017 budget to ensure that it lays a sound foundation and expenditure path for NDP 11, while at the same time aligning its priorities with the emerging themes of both the Vision 2036, and the Sustainable Development Goals. The preparation of the Vision 2036 is underway, while the SDGs were adopted by the United Nations General Assembly in September 2015. A full alignment of the Vision 2036 and the SDGs with the annual budgets will be achieved through implementation of NDP 11, whose preparation is at an advanced stage and I hope to present its draft to this Honourable House in July this year.


BOKO: Of note, the current budget closes several significant epochs (NDP 10, Vision 2016, and the Millennium Development Goals (MDGs) and takes us into three others, viz., NDP 11, Vision 2036 and the Sustainable Development Goals (SDGs). This being the final budget of NDP 10 and Vision 2016, the Minister should have provided a comprehensive and candid account of the country’s progress or lack thereof, against the Vision 2016 targets. We plan/budget for the development of people, not to achieve macro-economic targets as an end result. That we expect to achieve an average real GDP growth rate of 4.5% over the NDP 10 period compared to a planned target of 3.3%, or a deficit of 3.1% of GDP compared to a forecast of 16.4% means nothing to the 20% of the labour force who are jobless, the 19.3% of the population who subsist below the poverty line, workers who endure declining real incomes, the generation of young people who are being failed by a mismanaged education system, farmers facing a hostile climate and declining yields, and a population that endures a declining quality of public services.

MATAMBO: As 2016/2017 is the last financial year of NDP 10, the proposed budget provides an opportunity to consolidate activities originally planned for the Plan period; some of which were later postponed due to the global financial and economic recession of 2008/2009. The recently announced Economic Stimulus Programme also provides an opportunity to intensify backlog eradication efforts by accelerating the implementation of programmes and projects approved for NDP 10. In this respect, the proposed budget allocations for 2016/2017 cover key thematic areas of: investing in infrastructural development; creating employment opportunities; strengthening human capital; enhancing national security; and strengthening local governance

BOKO: The NDP 10 era and the reign of President Khama will be remembered as a period of fiscal profligacy, unprecedented corruption and impunity, as well as a generalised deterioration in government efficiency and effectiveness. As we begin the NDP 11 and 2016 chapters, periods during which good governance enjoyed universal acceptance as a necessary condition for development, and the strain on the fiscus is growing, we are treated to a budget speech that is oblivious to the urgent need to institutionalise and operationalise value for money principles in the management of public resources. Under your watch, Honourable Minister, this government runs a slew of costly initiatives for which performance criteria are not defined and monitoring and evaluation systems do not exist, and there is evidence of wanton waste.

These include: The Poverty Eradication Framework, an expensive political adventure that consumes several hundreds of millions of Pula each year with no tangible results to show. The flagship initiative under this programme is backyard gardening, a poorly conceived and exceedingly wasteful initiative. It should shame this government that the high levels of waste under this programme occurred under the direct supervision of his Honour the Vice President, who incidentally has failed to produce a Poverty Eradication Strategy/Policy that he promised parliament more than twice. Such a strategy, especially if developed as a national, as opposed to a government strategy, may have provided the necessary performance criteria for the charge against poverty. Also shameful is the lack of monitoring and evaluation that per chance could have saved the nation the hundreds of millions that this programme has cost the nation with nothing to show by way of results.

The Integrated Support Programme for Arable Agricultural Development (ISPAAD), another expensive political adventure without performance criteria. ISPAAD has had no impact on productivity in arable agriculture and yet, even in years of acute drought, the government injects millions of Pula into ISPAAD, distorting farmers’ decisions at great cost to the nation. Beyond wasteful programmes, we have also witnessed gross mismanagement of mega projects and shocking indifference by this government to the extensive waste and corruption associated with these projects. We have had Morupule B, Botswana Meat Commission, the Palapye Glass Project, and the Airport project, amongst others. These four alone cost Batswana billions of Pula in pure waste and corruption for which no one has to date been held to account.

Economic Stimulus Package

MATAMBO: The global financial and economic crisis led to a number of projects being deferred, especially in the areas of social and economic infrastructure such as in education, health, and roads. In this regard, Government, through the ESP is embarking on fast-tracking backlog eradication, which covers construction of classrooms, staff quarters, and customary courts; upgrading of health facilities; and rural electrification. The implementation of the ESP will create jobs especially in the construction sector and rural areas. In the same vein, youth owned construction companies and individual youths with vocational skills in maintenance should be given priority in the implementation of the ESP through the Youth Empowerment Reservation Programme. Currently, the Programme reserves 15 percent of minor maintenance budget of Government facilities for youth companies and youth with vocational skills in construction.


BOKO: I would like to commend the Minister for breaking ranks with his principals and boisterous cheerleaders within the governing party who have hitherto sold the ESP as a bold programme to stimulate the economy and bring the good days back. It is naïve in the extreme to think that an injection of cash into a stagnating economy could somehow engineer an economic boom. It is sad when no less an authority than the Vice President leads disinformation on this scale.  From the times of John Maynard Keynes, the towering economist of the nineteenth century, to this day, economic stimuli have served one purpose only, to mitigate the impact of an economic slump, help troubled firms avoid closure and save jobs.

They do not generate economic booms. So we were shocked as ministers, legislators, councillors and party operatives went around the country urging Batswana to register firms in preparation for the ESP. This is cruel, irresponsible and fraudulent. We still do not know how much the government intends to spend on the ESP, and how many jobs it expects to save or create. We find this arrogant, disrespectful to parliament and the people, and completely at odds with responsible governance. We will not create enough jobs fast enough to absorb the growing pool of skilled and an unskilled youth unless we accept that unemployment in Botswana is structural. Piece meal initiatives skirt the problem. What we need is a serious dialogue on the direction of the economy and on jobs. But the first step in the process is liberating enterprise.

Improving efficiency

MATAMBO: Creating employment opportunities requires rapid and sustained economic growth, which in turn depends on among others, the overall efficiency and productivity of the economy. In this connection, Government continues to undertake various measures to deregulate the goods and labour markets, with a view to improving efficiency. Specifically, Government has intensified the implementation of the reform roadmap and action plan for Doing Business in Botswana. Some of the initiatives in the roadmap include: reviewing of various pieces of legislation, public sector reforms to streamline processes for service delivery in the country, and leveraging on the information and communications technology to improve productivity in the economy.

BOKO: As I said in my contribution to the 2015 SONA, more than money, business requires an efficient environment: unencumbered rule of law, efficient licensing as well as permit procedures, efficient contract enforcement mechanisms and efficient institutions.

Skills development

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MATAMBO: In recognition of the importance of education to achieving inclusive growth, Government has, over the years, invested substantial resources in the development of skills for the country’s workforce. Besides empowering the individual to make informed choices in life, education can contribute to sustainable economic growth through improved productivity of the workforce, as well as the ability to adopt technology. Concerned with the declining education performance, Government adopted the Education and Training Sector Strategic Plan (ETSSP) in 2015, whose implementation is expected to address the quality of existing Vocational Education and Training programmes as a way of equipping the youth with appropriate skills.

Furthermore, the ETSSP will also increase equitable access to education by intensifying the use of Information, Communication and Technology (ICT) in learning. Under the ETSSP, an Early Childhood Policy Framework will be developed in partnership with the United Nations Children’s Fund to guide the implementation of Early Childhood Care and Development in the next five years. The acceleration of backlog eradication of classrooms and other education facilities under the ESP will help achieve some of these targets.

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BOKO: The much-talked about Education and Training Sector Strategic Plan (ETSSP) is yet to be costed and implemented. Given the competing demands for government finances, is the ETSSP really going to be a priority? Institutions (such as UB) that will be critical for the success of the ETSSP seem not to be aware of their roles in this project. Has the rolling-out of the program been thought out clearly?

Training (i.e. vocational and technical education), that branch of the education system with a direct link to the labour force, continues to be neglected. All we hear about its importance is mere rhetoric. Private providers of vocational and technical education are just interested in profit and care less about the quality of training they provide. In fact, some of them claim funds from the Training Levy for student attachments when they do not have such attachment programs. This is fraudulent behavior. And yet government turns a blind eye to all this. It has been said several times over the years that public technical and vocational institutions are mis-aligned with labour market needs. Nothing is being done about it.

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We note with alarm, as the UDC, that under the current administration, education has become an agent of social division and entrenched inequality. Yet education must promote social justice, national unity and cohesion. Education should provide hope for young people across the entire country and enable those born into poverty and disadvantage to escape these cloying circumstances of their birth. Education should be, as we got to know when we were growing up, the only sure escape from poverty by all. Most of us in this House and many in public service are living testimony of the empowering and liberating role of education. Except for a few who inherited prestige and privilege, most Batswana come from humble backgrounds. Education used to enable them to overcome poverty. This, sadly, is no longer the case.

Revenues and Grants 

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MATAMBO: Total revenues and grants for 2016/2017 are estimated at P48.40 billion, a decrease of P3.36 billion compared to the revised budget of P51.76 billion for 2015/2016; with Mineral revenue contributing 35.2 percent of the total revenues, followed by Customs and Excise at 24.3 percent. Non-Mineral Income Tax and Value Added Tax come third and fourth at 21.2 percent and 12.4 percent, respectively. The reduction in the 2016/2017 revenues compared to 2015/2016 is a result of the projected fall of 6.9 percent in mineral revenues and 23.8 percent in customs and excise receipts. A total development budget of P14.82 billion is proposed for the financial year 2016/2017. The Ministry of Defence, Justice and Security, with a proposed allocation of P3.59 billion or 24.2 percent, takes the largest share of the proposed budget, mainly to cater for provision of defence equipment, communication equipment, and infrastructure, in order to improve BDF’s defence capabilities. In addition, the allocation caters for construction of police stations at Mmathubudukwane, Maitengwe and Semolale, as well as staff houses in different locations in order to improve safety and security.

BOKO: We would immediately cancel the order of army aircraft. We would re-direct some of this money away from aircraft and towards a range of high impact uses including more improved equipment and living conditions for the army. This should save billions of Pula per year, a good portion of which would be re-directed for not only a more professional, equipped and highly motivated army and police forces, but for other development initiatives as well.

 



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