Higher than anticipated Southern African Customs Union (SACU) revenues helped fiscal authorities move from a deficit of nearly P3 billion in the first quarter of the 2018/19 budget, to a small surplus of P234 million by October, BusinessWeek has established.
Last February, Finance Minister, Kenneth Matambo projected a deficit of P3.6 billion, revising this in September to P4.6 billion, mainly due to revenues being diverted to Debswana mega-projects.
Government, as a shareholder in Debswana, has funding obligations to the diamond miner’s upcoming projects, which include Cut 9 at Jwaneng and Cut 3 in Orapa.
In his budget speech, Matambo had also forecast that of the P64.3 billion total revenue for 2018/19, at least P14.8 billion would come from customs and excise, which are routed through SACU.
Data released by Bank of Botswana this week, however, shows that SACU inflows are ahead of the curve thus far in the financial year, helping to ease the deficit already recorded in the 2018/19 budget thus far.
By October, SACU revenues amounted to P11.2 billion, or 75% of the full year forecast, with five months still left in the financial year.
Customs and excise revenues accounted for 34%, 23% and 46% of overall inflows to government coffers for the first and second quarter as well as October respectively.
“The cumulative government cash flow figures for 2018/19 as at October 2018 show a budget surplus of P234 million, mainly due to the more-than-anticipated SACU receipts, which within seven months of the fiscal year over,
stood at more than 78.7% of the revised budget,” the central bank said.
Meanwhile, revenues from mining activities were trending below the 2018/19 target, being pegged at P11.7 billion for the financial year up to October against a full year forecast of P24.6 billion. Last February, Matambo had said the forecast for mineral revenues was supported by the “expected positive performance of diamond exports, underpinned by recovery of the global economy”.
In September, the Finance Minister revised the forecast for mineral revenues to P20.1 billion, citing the shareholder funding commitments to Debswana. However, the mining sector, particularly diamonds, had a sluggish start to the year with an official internal report from the Minerals Ministry showing that mineral revenues were P4.9 billion between January and June, compared to P7.2 billion the previous year.
By November, most minerals had recovered, with soda ash exports pegged at P972.4 million, higher than the full year 2017 figures and gold at P410 million, higher than the P383 million recorded for the full year in 2017.