Ministries trip up in the first lap

Mbongeni Mguni | Monday August 14, 2023 06:00

In February, shortly after the announcement of the 2023-2024 budget, Mmegi published ‘The Difficulty of Spending P13bn in a Year,’ discussing government readiness to utilise their yearly allocation.

The P12.7 billion set aside for infrastructure, part of the P21 billion development budget ratified by Parliament for 2023-2024, was intended to stimulate the economy post-Covid by reviving deferred public investment projects.

Our February analysis voiced scepticism about feasible fund utilisation, given historical inefficiencies, wastage, and corruption in public spending.

The 2023-2024 development budget marks the inaugural year of the Transitional National Development Plan (TNDP) with significant projects like the P2.4 billion reconstruction of the Francistown-Nata-Maun road.

Finance ministry revelations disclosed that, within the first three months, eight ministries and agencies expended less than one percent of their development budgets, with just 18% or P3.8 billion of the approved P21 billion spent between April and June—below the ministry’s 25% target.

“We are going into a new financial year and I asked for a lot of money for developments, but I’m seeing the same problem,” Serame said on Wednesday in Mochudi, when launching the budget process for 2024-2025.

“The ministries asked for it and I had told them that they would not manage to spend it.

“They said they would do things differently and I said it would not happen.

“Here we are.”

Implementation challenges—scoping, monitoring, capacity, costing, appraisal, coordination, and accountability—have perennially plagued government, squandering billions of pula and stifling citizens’ economic growth.

At its heart, poor implementation of government programmes, policies and projects not only means wasting the millions paid to consultants who draw up these plans but also the potential benefit and opportunities to citizens such as access to electricity, water and other infrastructure, are equally lost in the wind. To address this, government’s interventions include only allocating resources for projects that are ready for implementation and that have passed the three phases of “confirmation of concept, pre-feasibility and full feasibility study”.

Another is the new Development Manager Model, which outsources major projects to private companies. The Francistown-Nata-Maun road project, worth P2.4 billion, adopts this model in the TNDP.

“We always say before the start of the financial year in April, do the things that have to be done so that after April when the money comes in, you are ready,” Serame said.

“They don’t do that and are not prepared.”

She emphasises preparation pre-fiscal year and contemplates legal changes to enhance development expenditure and deter underspending. Serame said this week that changes to the Public Finance Management Act are being considered to empower the ministry.

“We are looking at it to see how to improve it and modernise it.

“I would also want some powers to be able to do something about these people that I have given money for projects and they don’t use it, as well as those that use the money improperly,” she said.

Besides the litany of reasons behind poor implementation, ministries, departments and agencies have seen their efforts increasingly undone by legal disputes with contractors. Several key projects are still stuck in limbo, passing the timeliness of their opportunities, while government wrangles with contractors in the country’s courts.

However, even more concerning for those monitoring project implementation in the country, is the fact that the challenge continues despite the fact that increasingly the funds government uses for the development budget are sourced from the capital market and external lenders. For the 2023-24 financial year, the forecast deficit of P7.6 billion will be funded by the local capital market and lenders such as the African Development Bank.

Keith Jefferis, a prominent economist who recently concluded a three-year posting as a senior policy advisor in the Finance Ministry, notes that the challenges of implementation belie the concerning trend of declining development budget spending over the years.

“In terms of how spending is allocated, there is an increasing share devoted to government wages and salaries and a declining share going to the development budget, which is public investment,” Jefferis said at Bifm’s recent business seminar.

“Even though the share of the budget devoted to public investment has been declining, the development budget has been consistently underspent.

“So when ministries tell you there’s no money, don’t believe them.

“They have the money, they just can’t spend it.

“But it’s easier to say the problem is with the Ministry of Finance and ‘they are not giving us the money,’ rather than admitting that they are not organised enough to spend the money.”

For Serame, the challenge of development budget spending is about the failure to deliver on promises made to Batswana.

“We ask for this money and then we don’t use it.

“What do we do about this?

“These developments should be going to the people.”