UDC maiden budget attracts mixed reaction
Lesedi Mkhutshwa | Monday February 17, 2025 11:32
The business community and experts shared their opinions during Access Bank Botswana’s inaugural Post Budget Speech breakfast seminar held in partnership with AccPro and Kgori Capital.
The bank’s new chair, Boiki Tema, said that collaboration between the private sector and the government will be essential in unlocking Botswana’s full potential.
“We are ready to work with the government, industries and communities to create an environment where businesses thrive, innovation flourishes, and economic growth is inclusive,” he said.
For his part, Craig Granville, the managing director of AccPro, highlighted the significance of understanding the tax adjustments in the budget, especially for businesses and individuals looking to navigate the changing financial landscape.
Granville also spoke about revenue maximisation for the country through increasing collections, broadening the tax base, minimising inefficiencies, enforcing penalties for non-compliance and strengthening the capacity of the BURS.
Unpacking the budget speech, Kgori Capital investment analyst, Kitso Mokhurutshe, said that whilst efforts have been made to contain spending in the 2025–2026 budget, these are not enough.
He cited the recurrent budget which he said remains stubbornly high, rising by 5.8 percent whilst the development budget was largely contained although it also increased by 0.7 percent.
Mokhurutshe also said that the personal emoluments, including wages, salaries, and pensions are the largest expenditure line, whilst education continues to receive the largest share of spending with 19% of the total.
Mokhurutshe stated that there is a need to bring the national budget back to a balanced position, as foreign exchange reserves have been declining in recent years.
“Budget surpluses are needed to restore fiscal buffers,” he said. “Greater improvements in revenue collection and broadening VAT base are also imperative.”
During the question and comments session, Business Botswana’s Francistown Business Council chairperson, Babe Makwinja, expressed concern about the proposed increase in corporate tax hike, which he noted is taking place at the same time as the campaign around the P4,000 minimum wage. 'We are reducing profit if we raise corporate tax, so how are we going to meet the minimum wage under these circumstances?' she asked. Another delegate, FS Accountants director, Jonathan Msiska, expressed confidence that despite the current difficult economic conditions, the country would rebound in the future.
'We are the most peaceful country in the region, and the facilities that are available make it a prestigious place to operate. “We are a sizable market in north that is open to foreign investment. “We will experience hardship for a year or two, but after that, I believe Botswana will experience economic growth in five years,' he said.
Gerald Court President, Motlatsi Kediseng, urged delegates to put their support behind the UDC government.
“I believe that a lot more is coming, we should trust our new government and give them the benefit of the doubt. “The government, as has been stated, inherited an ailing economy. “So let us give them a chance to rebuild and deliver on their promises,” said Kediseng.