Printing more money not feasible says Jefferies

MONKAGEDI GAOTLHOBOGWE
Staff Writer | Tuesday October 12, 2010 00:00

In response to Mmegi's queries Dr Jeffries said, 'I do not even think government can consider that option; first we have reserves, the government is not broke despite the crisis...printing money is not necessary, it is not feasible'.

Dr Jeffries also says the government doesn't print money. 'Government can borrow, levy taxes.

I guess by printing money he means the government borrowing from Bank of Botswana (BoB), but as I said, even the BoB have legal restrictions on how much government can borrow'.

He added, ' In Zimbabwe they ignored the law (that limits Central Bank borrowing), but here we assume that the law would be adhered to'.

He explained that the BoB Act sets limits of borrowing by the bank.

Jefferies says that is not needed either. ' It is likely that government has spare capacity in the budget as recent demand for diamonds have picked up worldwide and the budget deficit situation is not bad, government has room to maneuver in the budget.

University of Botswana economist lecturer Mogale Ntsosa, a guest on Btv's morning show yesterday suggested that government raise the P66 million needed to pay the civil servants' back-pay, by printing more money as all leading economies practice this.

In the morning show Ntsosa said this was better than diverting funds meant for new projects or introducing more tax to raise the needed funds as the economy was still reeling from the effects of a recession.

Commenting on the UB lecturer's statements that other countries like the USA printed more money during the recession Dr Jeffries said, ' Different governments have different situations; something suitable for the USA may not be suitable for Botswana'.

Meanwhile Ntsosa declined an interview with Mmegi on the matter claiming that the inquiry would undermine his integrity and portray him in a bad light.

While he also refused to reveal his background as an economist, merely stating that he has been a lecturer since 2000, he promised to write an opinion piece regarding his 'print more money' advice.