The 2020/21 Budget Speech: An Introduction

Lesego Nswahu Nchunga | Monday February 8, 2021 21:48

When the 2020 Budget Speech was delivered in February 2020, Botswana had not yet registered it’s first COVID-19 case. There had been one suspected case registered at the Sir Seretse Khama International Airport. Unconfirmed. Not yet as terrifying. We were watching from our screens, with the freedom only definable now, by “times long passed”, as Italy, China and the United Kingdom were struggling to keep their heads above water with the virus.

There were significant hints that the world economies would take a hit, with entire national lockdowns, closures of boarders, limited travel and global panic. It was also weeks before COVID-19 was declared a global pandemic.

For all intents and purposes, and in so many words, we were, by the Minister’s own assertions, commencing our journey to higher-income status, looking forward to a transformed economy with suggested social and economic initiatives which would propel us accordingly.

There were promises of promotions of export-led growth, ensuring more efficient government spending and financing, building human capital, as well as provision of appropriate infrastructure as the four pillars and objectives which were to ensure our economic growth.

 Socio-economically, there were undertakings to sustain livelihoods. The position taken was that there would be efficiency and effectiveness of social welfare programs which was intended to ensure that the envisioned transformation creates an enabling environment for participation by even those who could not participate in the mainstream economy. Recognising that transformation has a dire impact on inequality, social protection was named as a priority, along with poverty eradication, and health care reforms.

Of course, the most immediate concerns when all these are stated would be that there will be realistic considerations of the special circumstances of all persons for real impact. In comparison to the budget speech delivered by the Minister this year, government’s priorities have significantly shifted to a more economic recovery focus than before, with almost nothing addressed on livelihoods.

This is indicative of a reduced institutionalisation of citizen participation.

Economically, compared to the previous financial year, 2020/21, the government has reduced its recurrent budget by 2% from P65.3bn to P57.2bn in the 2021/22 financial year. The 2021/22 Development Budget is P14.75bn. Out of all the ministries, the Ministry of Land Management, Water and Sanitation services remains the top ministry enjoying the largest share of the allocation of P3.4bn. Although the defence budget has had a budget cut in the current financial year, it is still in the top 3 ministries with the highest share of the allocation. For the financial year 2021/22, the largest budget allocation went to education and skills development at P14.12bn which is on a combined basis. In the previous year the education sector also received a fair share of the allocated budget. 

The Finance Minister indicated that the domestic economy is expected to grow by 8.8%. Ceteris Paribus, the economy would grow as per the projections, but since businesses are operating under unprecedented times this might not necessarily be the case.

This is also however not to be a doomsayer considering also that businesses have sought adaptation under the new normal due to the global pandemic. This is also considering that a lot of businesses locally experienced unexpected shocks from the novel coronavirus which unfortunately led to closure of most businesses. As it stands, one of the largest employers and largest alcohol producers Kgalagadi Breweries Limited (KBL) has had its fair share loss of millions from lack of alcohol sales due to the alcohol ban. The country has been on an alcohol ban since the beginning of January 2021, leading to a production suspension affecting both suppliers and employees. Question is will the entity be able and employees be able to bounce back from these setbacks and how long will it take? 

Going forward, all eyes will be on the Economic Recovery Transformation Plan (ERTP) as the country seeks to cushion itself from the hard hitting impacts of the pandemic.

Even though its area of prioritization will be the rapid rolling out of digitalization of the public services,  it is with hope that all the anticipated projects will get to see the light of the day considering the evolving nature of Covid 19.

Over the next 3 weeks, we will debunk and reflect on the just delivered Budget Speech, looking closely at how it has departed from what would be, expectations we had following the 2020 speech, and particularly, exploring what we reasonably should have expected under the circumstances, regard had here to the realistic impacts the pandemic has in fact had on us, and all the ways the current speech’s focus on economic recovery could impact livelihoods going forward.

Tuduetso Madi recently got admitted into a Doctoral Programme, she also holds an MA Politics & International Relations. Her interests are in Political Economy, International Affairs and Military Sociology.