2016 budget: ESP miscarriages
Dithapelo Keorapetse | Friday February 5, 2016 14:23
The country will, until something major happens, be stuck with high levels of poverty, unemployment and underemployment and the gap between the rich and the poor will remain wide. Lack of access to economic and business opportunities and lack of access to basic services such as sanitation, water and electricity and education and health will continue unabated with profound effects on Batswana.
The minister has told Batswana that for 2015 economic growth was at 1% and has projected over 4% growth for 2016/2017. Revenues are expected to be P48.4 billion in 2016 against expenditure of P 54.44 billion. Consequently there’s a budget deficit of P6 billion to be financed with domestic and foreign borrowing and drawing from government savings. The minister is clear that P14 billion of the P54 billion proposed expenditure is allocated for development projects of which P1.3 billion will be under Economic Stimulus Programmes (ESP).
The minister says that rural electrification, roads construction, teachers’ houses and classrooms, land servicing, agriculture and poverty eradication will benefit from ESP. He was clear that ESP basically addresses backlog eradication of development projects which were deferred or completion of ongoing projects. How then does spending a paltry P1.3 billion or so in completing projects which were deferred going to stimulate the country’s economy? By how much is ESP expected to grow the country’s economy or increase its GDP? There are still sketchy details on how much is going to be spent on which specific project.
There is a fundamental question that the minister hasn’t addressed; how much of ESP money will eradicate the backlog and how much will be allocated for ongoing or future projects? Most importantly, how many long term or sustainable jobs are going to be created by ESP? Unemployment and underemployment are expected to drop by how much because of ESP? The minister was deliberately and strategically equivocal on ESP because there is no ESP, there’s nothing in the budget that will stimulate the economy, nothing. This is just re-labelling of few projects. There is therefore a need for an apology to the people who were misled into flocking offices of the Registrar of Companies in anticipation of the promised money.
The minister has allocated P3.59 billion or 24.2% of P14.82 billion of the development budget to the Ministry of Defence, Justice and Security to cater for provision of defence equipment, communication equipment, and infrastructure in order to improve BDF’s defence capabilities. The minister ought to have explained clearly the country’s national security threats and the nature of the defence force needed to meet these security challenges. The reason why he failed to articulate the country’s security threats is because studies have shown that the country’s security threats are unconventional and don’t need to be addressed through arms of war. Some of these are poverty, unemployment, food security and health issues eg HIV/AIDS. The point is, the minister has to justify large arms procurements and explain how these will address our security needs. It is known that defence procurements unfairly and corruptly benefit certain people at government enclave who are usually agents in the transactions. There is a need to steal more money and perhaps for the last time before 2019 general elections, the minister should have just said because that’s the truth. If the money was going to be used to address the needs of soldiers such as accommodation, it wouldn’t be a problem. If this colossal amount was allocated to the procurement of police vehicles, construction of their houses and police stations and policing equipment it would make sense. The minister mentions something like that but he’s unclear on how many police stations are going to be constructed and where. He hides behind generalisation.
Matambo’s budget will not address unemployment; there are no new strategies of job creation, ESP has miscarried in this regard. He has given up on economic diversification and from the speech it’s apparent that the economy will continue to be dependent on mining especially diamonds. He has even failed to state the number of jobs lost because of the decline in the mineral sector; some mines have closed, some are retrenching and others are having serious cash flow problems. Matambo should have stated how many jobs he will create and how many have been lost. No jobs can be created when money is spend on arms procurement and not sectors which have higher returns. The retail and services sector should have been considered for expansion to stimulate the economy. Sectors which have proved to be high revenue earners for the country such as tourism and construction are worth considering for more investment. Money that is wasted in buying votes through arable agricultural schemes should be saved with proper investments; there is no clear return on investment on arable agriculture schemes.
The problem of Botswana in the recent past hasn’t been money shortage but a deficiency of ideas and new strategies and misplaced priorities. Why is the government refusing to diversify the economy through robust investment in mineral beneficiation? Our minerals have for many years created jobs for aliens abroad with us getting crumbs from sales of minerals in their raw form.
This economic development modus operandi has left us vulnerable to unpredictable global economic shocks. We are price takers for these raw materials and have always been at the mercy of those who are price determiners. There is no hope that under Matambo and Ian Khama poverty, unemployment and underemployment, wealth and income disparities and lack of access to business opportunities will be addressed.