05 Feb 2017

The Minister of Finance and Economic Development,  Mr Kenneth Matambo, is to deliver the 2017/18 national budget on Monday February 6.

The budget speech will kick start the National Development Plan (NDP) 11 and Vision 2036.

While another deficit is expected since government continues to embark on employment creation and poverty eradication through projects such as Economic Stimulus Programme (ESP), the NDP 11 promises a cumulative budget surplus of P1.05 billion.

The minister during his presentation of NDP 11 last year, said due to the uncertainty in the global economy and the need to create employment opportunities through increased spending, the budget was projected to be in deficits in the first half of the Plan, but forecast to only record surpluses in the last three years.

Independent firm, E-consult states in its latest quarterly review that the challenge will be to ensure that this anticipated contraction in spending is actually achieved, and that sufficient business environment reforms take place to ensure that the private sector takes up the stock.

The plan covers a six year period from April 1, 2017 to 31st March 2023 under the theme, “Inclusive Growth for Realisation of Employment Creation and Poverty Eradication”.

Botswana has experienced several years of budget deficits, with the last surplus of P5.34 billion recorded in 2014/15.

The 2015/16 budget estimates a deficit of P4.20 billion while the Minister during his presentation of the 2016/17 financial year said there would be a deficit of P6.05 billion.

Government officials have previously said the deficit would be financed through various means such as drawing from the Government Investment Fund (foreign reserves) or domestic borrowing.

A new Fiscal Rule is to be introduced during the 2017/18 financial year, aimed at financing the re-current budget from non-mineral revenues, and to invest 60 per cent of mineral revenues in physical and human capital while the remaining 40 per cent would be saved as financial assets for future generations.

Meanwhile, the economy showed signs of recovery during 2016 following negative growth experienced the previous year driven by an improvement in the diamond sector.

Both the government and the International Monetary Fund (IMF) and the World Bank have each projected growth of 4.0 per cent this year.

For 2017/18 financial year, in line with NDP 11 aspirations, analysts predict an expansionary budget as the government is to continue with the flagship ESP projects which are to benefit all constituencies. BOPA