This is an optimistic budget – Botlhale


A public finance specialist at the University of Botswana (UB), Professor Emmanuel Botlhale, has said the Finance Minister Kenneth Matambo has proposed an optimistic and cautious budget.

“On optimism, his glass is half full, not half empty. That is, he is saying that despite tough economic times, we must soldier on. On the cautious side, he unremittingly continues the ethic of fiscal prudence by proposing a modest budget surplus of P1.23 billion.

“He exhorts us to cut our coat according to our small cloth (government revenues) and also to self-deny and sacrifice. The challenge therefore, is for Batswana to step up to the plate and help the government deliver the national budget.

“The execution of the budget is not a job that we can outsource the government,” said Botlhale. He said Batswana need to celebrate the fact that our account books are in the black.

“However, the surplus is not a licence for the government to go on a spending frenzy. Between 2007 and 2011, we accumulated debt to finance budget deficits.

“Also, we dis-saved from foreign exchange reserves to make up for the revenue shortfall,” he said. He added that every surplus thebe that comes our way should be used to either pay the debt or replenish foreign exchange reserves.

The UB don said: “One may do well to appreciate that pre-recession, we had a 24-month import cover.

“As at the end of December 2014, the reserves amounted to P79.0 billion; this is the equivalent to 18 months of import cover of goods and services. Thus, we need to replenish foreign exchange reserves as a matter of urgency.”

Despite his optimism, Botlhale said Botswana is not yet out of the woods as far as the economic downturn is concerned.

“Actually, there is a possibility of a double-dip recession if leading economies such as the United States of America do not bounce back to pre-recession growth levels,” he warned.

But he was optimistic that there might be public salary adjustments this coming financial year.

“Given the fact that Minister Matambo stated that the government remained fully committed to the Bargaining Council in the process of negotiating public service salaries, and will continue to consult with trade unions, there is hope for action in that regard.

“However, he cautioned that negotiations must be anchored in the knowledge that there are revenue squeezes. At the end of the day, public sector employees may get a COLA (Cost of Living Adjustment) as opposed to a salary increment.”

Lastly, said Botlhale, one needs to commend the minister for projecting a modest budget surplus of P1.23 billion.

“This is a sign of fiscal prudence. However, lately, the Botswana government’s post-budget speech behaviour belies its commitment to the ideal of fiscal prudence.

“It forecasts a modest budget surplus in April but reverses same through requests for supplementary estimates which are ritualistically approved by parley every December.”

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