Gaborone – Botswana Minister of Finance and Economic Development, Peggy Serame will table the country’s national budget in the next fortnight focusing on key sectors of education, health and infrastructure development.
Serame told stakeholders in the ongoing budget consultation that the national priorities entail key areas of importance in the coming financial year, while the Medium-Term Fiscal Framework provides an indicative resource envelope as well as its proposed allocation among the various expenditure lines/votes.
Serame said the risks to the outlook are less pronounced than they were last year, when the economy was hard hit, contracting by 8.5 percent in real terms. Although we expect a strong economic recovery this year, risks and uncertainties remain.
“This year, we have seen an exponential increase in COVID-19 cases and related mortality. Though, the number of new cases recorded on a daily basis has been declining steadily in recent weeks, there is still a risk for the fourth wave towards the end of the year. It is therefore important that we continue to comply with all the health protocols as advised by the experts leading the fight against the disease.
“The recent decline in new cases can be attributed to increased vaccination rates, coupled with containment measures that Government has put in place. Globally, the pandemic seems to be under control, primarily due to the widespread of vaccine rollout. This has allowed many countries to relax movement and border restrictions, thus opening up their economies,” Serame said.
The Botswana minister said they will continue to monitor the situation closely and considerations on further opening up of the economy and society will be dependent on the success with regard to vaccine rollout and other disease containment measures.
“The restoration of the economy continues to be guided by the Economic Recovery and Transformation Plan (ERTP), launched as part of the Mid-Term Review (MTR) of National Development Plan (NDP 11), as well as the Government Reset Agenda, launched by President, Dr. Mokgweetsi Eric Masisi in May 2021.Both are geared towards taking our economy to another level, despite the economic challenges we are faced with. I therefore implore you all to move along with these reset agenda priorities to transform our economy through innovation and technological strides,” Serame said.
Serame said the Botswana economy experienced growth of 0.7 percent compared to a year earlier,
“Regrettably, COVID-19 has persisted longer than anticipated. As such, the indicative revenue projections, which will be updated in January 2022, have been revised downwards, while expenditures are expected to rise, especially in the health sector due to COVID-19. As a result, an overall budget deficit of 4.0 percent of GDP is anticipated for the 2022/2023 financial year.
“The budget must be geared towards resetting the economy and remain guided by the five priorities of the reset agenda, which are: Saving Botswana’s Population from COVID-19; Digitization; Value Chain Development; Public Sector Reforms and Re-alignment; as well as Mind-set Change. We must also ensure that scarce resources are channeled only to high return programmes and projects,” he said.
The Botswana minister reiterated that efficiency of Government spending will be prioritized, especially by speeding up the necessary public sector reforms and improving the roll-out of public e-services.
“This is critical, as we do not have sufficient financial buffers in the Government Investment Account, which declined during 2020. Additional resources, if required, may need to be raised through domestic and foreign borrowing, while ensuring that we remain within the statutory debt limit of 40% of GDP.
“Domestic inflation has been on the rise for the last three months, surpassing the Bank of Botswana range of 3-6 percent. The economy is faced with low growth rates, increasing inflation rates and high unemployment rate, especially among the youth,” Serame said.