19 Feb 2013

Government is committed to giving the private sector space to grow the local economy.

The Minister of Finance and Development Planning, Mr Kenneth Matambo said this, on February 18, when responding to MPs debate on the 2013/14 budget speech.

He explained that government must be the facilitator and there was need to reduce people’s dependence on government. This, he explained, could be achieved through changing the mindset which was reflected by some legislators when debating the budget speech.

 “Some MPs are talking about government establishing leather works industries and this is where we differ with them as we believe that this should be the domain of the private sector,” he noted.

The government, he highlighted, should focus on what it does best such as provision of social services.

 He also mentioned that the budget for the Ministry of Agriculture was intended to subsidise those who were supposed to produce food for the country. "However, this cannot go on forever," he added.

As a country, Minister Matambo explained that Botswana needed to reflect on its productivity levels in order to realise economic growth. He also mentioned that while some MPs were skeptical about privatisation, he believed that the process was good but moving slowly.

While government could not privatise every state entity, Minister Matambo said government should get out of services that the private sector could do better.

On other issues, he said privatisation would deal with the concern that government was rich and said the outcome would be the redistribution of profits to citizens.

The finance minister added that there were many reasons why privatisation had taken off on a slow pace. Part of the reason, he said was that “we are being half-hearted about the process.” In order to change the status of these entities, he said, we needed to bring a bill to Parliament; hence the process taking a long time.

On the suggestion that the budget should be crafted looking at constituencies which had been disadvantaged by lack of developments, the minister said,  though he was open to the idea, he wanted to be informed on the models that would be used to achieve this.

Furthermore, he explained that there was a need to have budget surpluses and agreed with those who said employment creation should be a priority. On other issues, the minister also concurred with members who raised concerns about the shortage of vehicles in government departments.

The situation, he noted, had reached crisis proportions as many government vehicles were parked at the Central Transport Organisation awaiting to be repaired.

Consequently, he said a task force would be instituted in the near future to try and find solutions to this problem.

He agreed with the suggestion that the P11 billion was too small for the development budget but said it should be used for priority areas.

The finance minister challenged the private sector to grow the economy not by looking at the government but by being outward looking and penetrating global markets.

Responding to comments from the Kgatleng West MP, Mr Gilbert Mangole who had wanted to know if the competitiveness had been achieved by revealing the pula crawl, the minister said this had been realised in terms of exports.

“Statistics also show that while we depended on diamonds for revenue generation, the non-mining sector had grown substantially,” he said.

Minister Matambo explained that it was the right time to disclose the crawl rate looking at the country’s level of development, especially for the benefit of the private sector.

On other issues, the minister noted that it was difficult for Bank of Botswana to manage the inflation rate as they do not have control over prices of certain commodities such as oil, electricity and water.

In addition, he said the issue of hiring senior government officials on contract was a positive development as in the long run government would be able to extract maximum value and increase productivity.

He said it was a fact that when people worked under contract, they needed to demonstrate that they were worth keeping in their jobs. Consequently, he said government did not have a difficulty with public private partnerships and said lack of capacity delayed this.

He explained that a unit was being established under the finance ministry. ENDS