New wine in an old bottle

Machailo- Ellis
Machailo- Ellis

Several economic analysts have expressed disappointment over the budget speech delivered on Monday, saying while it presents high aspirations and intentions, it omitted the most fundamental issues affecting the economy.

In a statement released on Wednesday, Botswana Confederation of Commerce, Industry and Manpower (BOCCIM) CEO, Maria Machailo-Ellis said the speech did not deal decisively with some transformational issues that continue to impede the business environment and job creation. She stated that her organisation was concerned that while the Minister of Finance and Development Planning, Kenneth Matambo had proclaimed that the private sector was the engine of economic growth, wealth creation and employment, bureaucratic inertia continued to afflict the business environment, and by implication, the economy’s ability to grow and generate employment opportunities.

“We are therefore disappointed by the gulf between proclaiming the private sector as the engine of growth and the impediments that those at the coal ace of business have to contend with regularly,” she said.

Machailo-Ellis said the negative impact of arbitrary rejections of work permits for skilled people creates uncertainty and undermines the private sector’s ability to expand and create jobs.

In addition she said the speech made no reference to the myriad government levies which add to the costs of doing business, noting that an evaluation of these levies and the extent to which they achieve set objectives would have been beneficial to payers. “More importantly, BOCCIM would have appreciated the budget speech to make reference to using the training levy to attach Batswana employees to other parts of the world to address labour productivity and work ethics,” she said.

She acknowledged that the manufacturing sector including the budding diamond cutting and polishing industry continue to flounder largely due to low productivity. Although the speech touched on special economic zones, the CEO said she expected it to outline steps to resolve productivity problems in this critical sector by tapping into the training levy and sending Batswana workers offshore to boost productivity and the work ethic.

Machailo-Ellis pointed out that BOCCIM continues to be concerned with the implementation lag of policies and projects. She cited the Tourism Policy which she said was reviewed as far back as 2008 and is now, according to the budget speech due for review even though it has not been implemented. “The implementation of the Private Public Partnerships (PPP), a key economic reform initiative has also not been mentioned. BOCCIM therefore expected training on outsourcing to improve the capacity of public service managers to execute projects prudently. The Value Added Tax (VAT) amendments were mentioned in 2014/15 but were only implemented on January 23, 2015,” she explained.

Professor Narian Sinha, a University of Botswana economics lecturer said the minister had omitted issues related to gender budgeting and child budgeting. He said such issues need to be specially dealt with. He however agreed that through skills development programmes and seeking more cooperation from emerging economies such as India and China in the areas of leather processing, it will be possible to address issues such as poverty alleviation and rural unemployment.

“Measures like maintaining stable macroeconomic environment for private sector development: continuous review of various pieces of legislation to improve conditions for doing business in the country, and investing in selected infrastructural projects are expected to have positive impact on economic growth and employment creation,” he said.

He stated that the Rationalisation Strategy adopted in 2009 which resulted in merging of various parastatals, would result in operational synergy, cost savings, and promotion of efficiency in the economy.

BOCCIM president Lekwalo Leta Mosienyane described this year’s budget speech as “old wine in a new bottle”, saying it was not different from the other previous speeches. He also expressed dismay at the poor implementation record of the government, noting that the perception that appeared entrenched in government was that citizen entrepreneurs should be restricted to winning tenders for menial jobs. He said although it was an excellent budget with high level aspirations and intentions, the minister should have spent more time talking about efforts to address unemployment. Mosienyane however commended government for setting 30 percent of all projects to be undertaken by citizen-owned businesses. “BOCCIM believes government should deregulate the market to improve competition. Global economy is not expected to dampen growth in Botswana despite fears over slowing Chinese growth,” he said.Rudi Binedell, an audit partner at Pricewaterhouse Coopers, said the budget speech had in recent years become shorter and devoid of valuable information. He noted that it was disappointing that the speech had not touched on the many levies in the country.

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