07 Feb 2018

The 2017-18 national budget presented by the Minister of Finance and Economic Development, Mr Kenneth Matambo on February 5 presented many positives, but there are still numerous challenges that remain for the economy.

First National Bank Botswana (FNBB) economist, Mr Moatlhodi Sebabole expressed this view during the 24^th annual FNBB budget review seminar in Gaborone on February 6.

Mr Sebabole said although overall economic climate in the country remains stable, and there is projected growth in the economy, there are structural aspects of the economy that need to be addressed.

“There have been challenges that have been experienced in the mining sector and we have not seen growth in the agricultural and the industrial sectors.  We are still very much a commodity-led economy and we do not own the value chain,” Mr Sebabole said. 

While there will be growth in the economy over the next financial year, the FNBB growth projection for the economy is slightly less.  

He said that globally unemployment has lowered and that household and capital investment has also improved in the international economy, but questioned whether Botswana was in a position to benefit from the improved economic climate.

“Disposable wealth to households is still low and inflation has hurt the lower to middle income classes. Structural transformation is necessary, and we need strategies to improve ease of doing business. We need better innovative ideas around information communication technology, Rwanda for example is doing well in this regard,” Mr Sebabole said.

Mr Theuns De Wet, a chief economist at FirstRand in South Africa said the cyclical global economic recovery should provide financial relief for the Botswana economy and this needs to be followed up by strategic fiscal policy implementation.

He urged Botswana to use its fiscal space for investment and not consumption, in order to improve the overall economic climate and cushion against future global shocks.

Mr Jonathan Hore, a managing tax consultant with Aupracon urged the government to improve its tax regime, by empowering the Botswana Unified Revenue Service, taxing what he called ‘the underground economy,’ including buses, taxis and minibus public transport providers and the creation of a wealth tax.

FNBB CEO, Mr Steven Bogatsu said over the past two and a half decades his institution had held the budget review seminar in order to get stakeholders to interrogate the economy and think of ways to improve the country’s economic climate. ENDS