21 Jun 2017

Botswana is likely to face challenges if South Africa’s fiscal strength continues to weaken, says permanent secretary in the Ministry of Finance and Economic Development, Mr Solomon Sekwakwa.

Mr Sekwakwa was responding to a question posed by a member of the Public Accounts Committe (PAC), Mr Dithapelo Keorapetse, who wanted to know how Moody’s Investors downgrading of South Africa’s economy from Baa2 to Baa3 had affected Botswana and what was being done to cushion the country against any effects that may arise.

Mr Sekwakwa said government was closely monitoring the fiscal situation in South Africa because most of the country’s imports were from South Africa.

“If South Africa’s economy is not doing well we are likely to suffer,” he said.

He added that Botswana’s Gross Domestic Product was driven by mineral revenues, and that it made it difficult to measure the impact thus they have not been able to quantify how much impact has been felt by Botswana so far.

“But surely we are likely to face challenges if things do not improve in South Africa,” he said.

MP Keorapetse also wanted to know progress made under the Economic Stimulus Programme (ESP) in light of the challenges faced by the economy. He also wanted to know if the permanent secretary was satisfied with the progress.

“I do not have facts now but I know that the infrastructural facilities that were to be constructed have been done while some are lagging behind. In road construction, we are behind on account of lack of capacity.

 In terms of job creation and circulating money in the economy, ESP has been able to achieve that, but I am not satisfied with ESP progress so far. We are currently sitting at 20 per cent unemployment rate,” he noted.

On economic diversification, MP Keorapetse wanted to know why the country has not been able to diversify the economy after 50 years of independence.

“Two things are happening. The mineral sector continues to grow, but other sectors are going down. We need to take a step back and restructure our economy and overhaul all our systems and procedures, including immigration,” he responded.

Furthermore, Mr Keorapetse asserted that there were reports that suggested that there was state capture which was evident in some institutions, citing the military as an example where finances were channeled towards procurement of equipment that was not necessary while there were needs that were overlooked such as staff welfare.

He wanted to know what advice the accounting officer gave on such instances.

“When I advise I account to God first and then to the people. The situation at the Botswana Defence Force shows that personnel conditions are not good,” he said, adding that more needed to be done at management level and procurement for government institutions.

On other issues, PAC member and Specially Elected MP, Ms Bogolo Kenewendo questioned the accounting officer on why the Ministry of Finance and Economic Development often brought high supplementary budgets to Parliament for approval after a national budget was made, saying it brought the credibility of the budgeting system into question.

She cited the Botswana Innovation Hub building as a case in point, saying if cost estimations were not done properly on what was planned, there were loopholes for finances to be drained.

“The challenge is that when our principals need something done then we are inclined to add it as supplementary.

With buildings there are challenges because quantity surveyors do not give us proper costs for the life of the project as they are supposed to do so.

Then we will have to supplement the budget,” he said. BOPA