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Close non-performing parastatals: Moyo

SHARE   |   Monday, 29 February 2016   |   By Phillimon Mmeso
Close non-performing parastatals: Moyo

The 2016/17 national budget which carries an estimated deficit of over P6 billion due to an expenditure of more than P54 billion against revenues of over P48 billion is self-inflicted, said the MP for Tati East Samson Guma Moyo. Debating the consolidated and development funds estimates for 2016/17 for Ministry of Finance and Development Planning, Moyo said that the deficit is mainly caused by parastatals that are not making any profit but continue to milk money from government coffers through grants. “We cannot continue to throw money into the drain when is clear that these organisations will never recover,” said Moyo, calling on Minister Kenneth Matambo to tighten spending. Moyo, the former assistant Minister of Finance and Development Planning, implored on Matambo to take a bold decision and do away with nonperforming enterprises even if it will make him unpopular among politicians.

Some of the organisations which Moyo said he doesn’t see the need for their existence include the National Development Bank (NDB), Botswana Meat Commission and Botswana Development Corporation (BDC). He advised that some of the parastatals should be merged as there is duplication of mandates. In  his presentations, Matambo revealed that NDB is facing some challenges that characterised the banking system during 2015, which include reduced interest rates and strained household disposable income and distressed property market. He said that they have postponed the privatisation of the bank and allowed its commercialisation to return it to profitability. The MP for Gaborone Bonnington South Ndaba Gaolathe, who said that he supported the budget for ministry of finance, acknowledged the challenges the ministry is facing.

He said that he was concerned by the P4 million which has been allocated for consultancy on Private Public Partnership (PPP), saying that it is too much. Gaolathe, who is also an economist by profession, called on the ministry to consider an outright recruitment of highly qualified professionals on PPP to cut the cost. He called on government to consider using the P60 billion insurance funds for capital markets as part of strategy to diversify the economy but cautioned that it must be used without compromising the sector. He acknowledged the Ministry of Finance and Development Planning’s love for financial inclusion but raised a concern that they are silent on how they want to facilitate it. Major activities that will be undertaken by the ministry, according to Matambo, include the Public Finance Management (PFM) reforms and improving quality of service delivery at revenue offices. To achieve that, he revealed that they have established positions of treasury managers which are graded at E2 at some revenue branches.