27 Aug 2020

COVID-19 relief fund contributions currently stand at P2.125 billion, says Ministry of Finance and Economic Development permanent secretary Dr Wilfred Mandlebe.

Appearing before the Public Accounts Committee (PAC) on Wednesday, Dr Mandlebe said government contributed P2 billion while P125 million was donated.

To date, he said, 70 per cent of the total amount, which translates into P1.5 billion, had been disbursed leaving a balance of P629 million.

Dr Mandlebe said the money was allocated to health, education, repatriation, wage subsidy and food relief.

In addition, he said, a total of P268 551 020.33 was used for health supplies including accommodation and catering, contact testing, temporary staff for COVID-19, tests, reagents and supplies, protective clothing, freighting samples and tab commodities.

A budget of P807 277 570.45 was used for wage subsidy from April to June while food relief was allocated P350 870 083, he said.

Some P58 200 748 was used for Safety Health and Environment education and psychological support, whereas P11 099 679.10 went to diaspora citizen support in which P916 576 was used for repatriation through Ethiopian Airways and P10 183 103 went to external student financial support, he said.

Dr Mandlebe said government formulated an economic response plan to cushion the impact of COVID-19 on labour hence the wage subsidy and provided guarantee insurance, thereby saving lives.

Noting that this year was economically catastrophic, Dr Mandlebe said the world economy was predicted to contract by 4.9 per cent and slightly recover by 4.5 per cent in 2021 which he said had implications on the Botswana economy.

Dr Mandlebe said in January, the economy had been expected to grow by four per cent this financial year and by 4.6 per cent the next.

 All that had changed as the economy was expected to contract by 8.9 per cent this year with a recovery of 7.7 per cent in 2021, he said. 

He said although the recovery percentage looked high, Botswana was in a deep hole.

On the budget front, Dr Mandlebe said it was related to the global economy as Botswana depended on diamond exports and on the domestic economy through collection of tax.

He said a budget deficit of P5.2b or 2.4 per cent of GDP approved earlier in the year, went up to P18.7b, 10.8 per cent of GDP when COVID-19 struck. 

Currently, Dr Mandlebe said Botswana was sitting at P13.64b or 7.2 per cent.

He said government expected mineral revenue of P20b in January but it went down to P6.7b and now it stood at P10b. 

 A budget deficit of twice the normal limit of four per cent of GDP was projected, he said.

Dr Mandlebe said minerals and customs accounted for 60 per cent of the revenue but added there was need to diversify revenue collection in Botswana.

He noted that although the ministry was responsible for the financial management of the country, assistance from structures like PAC was needed to probe ministries and departments on revenue collection and not only expenditure.

There was more revenue that was not collected resulting in the finance ministry being overwhelmed as “it is expected to be collecting all revenue”, he said. Ends