Inside Matambo's bittersweet budget
Brian Benza | Tuesday February 2, 2016 18:00
Without giving detail of the size of the total economic rescue package, the minister sporadically mentioned ESP projects across six ministries worth only a cumulative P1.3 billion. The stimulus’ rollout is targeted to jumpstart the economy after a mere one percent growth in 2015, through fast-tracked infrastructure development, job creation and human capital development.
Presenting the budget estimates before parliamentarians, Matambo said revenues are seen at P48.4 billion in 2016 against expenditures of 54.44 billion resulting in the P6 billion gaps. The deficit is expected to be financed from domestic and foreign borrowings coupled with drawing down of savings, which stood at P35 billion as at December 2015.
The projected deficit follows another P4 billion shortfall in the 2015-2016 financial years taking the two-year cumulative deficit to P10 billion, which is equal to a third of government financial savings.
From the P54 billion expenditure estimates, Matambo said P14 billion would be channelled towards the development budget, of which about P1.3 billion will be under ESP.
The six ministries to benefit under ESP mentioned by Matambo include projects ranging from rural electrification (P257 million), roads construction (P250 million), teachers’ houses and classrooms (P440 million, land servicing (P250 million), Agriculture (P35 million) and poverty eradication (P50 million).
The Ministry of Defence, Justice and Security gets a proposed allocation of P3.59 billion or 24.2 percent.
The second largest share of P3.43 billion or 23.1 percent is proposed for the Ministry of Minerals, Energy and Water Resources to cater for energy and water infrastructure.
The major energy infrastructure projects include; Morupule A Power Station rehabilitation at P135 million, North-West Electricity Transmission Grid at P225 million.
With the economy reeling from the effects of the slump in diamond production, Matambo urged ministries to exercise restraint in requesting for additional funding through supplementary budgets during the course of the financial year, as this would worsen the fiscal situation.
Due to the slow global economic recovery coupled with water and power shortages, government has again trimmed its 2015 growth forecast from a revised 2.6 percent to one percent. Matambo, however, expects a significant recovery in economic growth by 4.2 percent although both the IMF and the World Bank do not expect a big jump in global economic recovery this year.
What would be encouraging for the minister is that the worst seems to be over for the diamond industry, as sales soared 114 percent at the De Beers first sale of the year held in Gaborone last week.