Mmegi Online :: Private sector ‘crowded out’ of economy - Business Botswana
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Last Updated
Monday 25 July 2016, 18:00 pm.
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Private sector ‘crowded out’ of economy - Business Botswana

In a reaction to the 2016/2017 Budget Speech delivered on Monday, Business Botswana says the private sector is currently crowded out of the economy. The private sector representative body therefore called on government to increase efforts that allows it greater participation in the economy.
By Staff Writer Fri 05 Feb 2016, 14:35 pm (GMT +2)
Mmegi Online :: Private sector ‘crowded out’ of economy - Business Botswana








The organisation said government should re-double efforts to resolving the water and power crises by roping in private operators as a way of popularising the Private Public Partnerships (PPPs).

Business Botswana also noted the looming drought and recommends the inclusion of private operators such as animal feed and vaccine suppliers, agricultural technologies, and truckers in the delivery and management of the drought relief programmes.

“The budget should have reaffirmed the role of the private sector as the engine of economic growth. In that view, we had expected the minister to highlight measures to engage the private sector to manage projects to avoid cost over-runs and delays.
“There is need for an innovative and clear strategy to grow the economy. This strategy should be anchored on the private sector as the engine of growth while government focuses on policy making and regulations,” read a statement from the private sector representative body.

While the organisation said it recognises that the fiscal environment under which the 2016-2017 Budget Speech was prepared is unfavourable with projected revenue lower than expected, it does not believe government will get value for money on some of the proposed projects.

“It is doubtful whether spending in the 2016 budget focuses

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on high return projects because of the lack of cost benefit analysis. As a result spending in some cases does not seem to be carefully prioritised to ensure prudent spending of scarce resources. A typical example is the 50 percent increase in the defence spending when everything is squeezed,” read the statement.

“This also coincides with a down turn in the Southern Africa Customs Union (SACU) revenues.  The fiscal ‘envelope’ is therefore shrinking and putting government under pressure for the second-year running.  This situation is worrisome and we hope that it represents a cyclical swing and not a trend.  However, we commend the minister for striking a reasonable balance under these circumstances,” added the statement from Business Botswana.

Going forward, the organisation said a properly resourced economic reform agenda should form part of the Budget Speech to avoid situations where those who have been charged with implementing key reforms decry the lack of budgets for their activities.

Business Botswana also said there was a need to create an enabling environment for the private sector to thrive, as this has not been clearly defined.

The organisation recommended that a medium-term review be done to ensure the creation of a conducive business environment.

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