15 Sep 2015

The Minister of Finance and Development Planning, Mr Kenneth Matambo, has said water and energy would receive the lion’s share of the 2016/17 national budget as they remain top priority for government.

Speaking during the Budget Pitso with Local Authorities held in Gaborone on Monday September 14, Minister Matambo said high priority will be accorded to these two areas in the allocation of resources as they contribute to economic growth and employment creation.

“As you are all aware, our country is currently facing serious challenges of inadequate supply of water and energy,” he said.

The minister said another area is backlog eradication as it covers all districts.

“Other areas of priority are health, human capital, development and poverty eradication,” he said.

He, however, said this would mean shifting resources from other projects including those from councils.

For his part, the secretary for economic and financial policy, Dr Taufila Nyamadzabo, said the country would face a budget deficit next year due to global economic pressures.

The budget projections for 2016/17 financial year estimate total revenues and grants to reach P55.69 billion against an expenditure of P57.11 billion, showing a deficit of P1.42 billion.

Dr Nyamadzabo said the local economy has been adversely affected by the global performance saying the slowed growth in China has resulted with less demand for diamonds and other natural resources.

“Prospects for global economy remain subdued due to continued weak consumer demand in advanced economies and the risk of a further fall in oil prices,” he said.

Dr Nyamadzabo said the global economy registered a growth of 3.4 per cent in 2014 and is estimated to have slowed to 3.3 per cent this year and modest recovery is expected next year.

He said the domestic economy grew by 9.3 per cent in 2013 and 4.4 per cent in 2014 due to GDP revisions as new mines were included in the calculations.

Growth rates of 2.6 per cent and 4.9 per cent are forecast for this year and next year respectively.

“These projections are subject to change depending on performance of mining sector,” he said.

He said the 2016/17 budget priorities include completion of on-going projects, maintenance of existing infrastructure, investment in high impact projects and strengthening human capital.

Other areas are improving total factor productivity and social protection programmes.

Meanwhile, Dr Nyamadzabo has said the 2014/15 preliminary budget outturn shows an overall budget surplus of P3.67 billion mainly due to under expenditure on development budget.

The 2015/16 budget revised estimates a deficit of P4.03 billion. ENDS