01 Feb 2021

In the budget speech delivered on Monday February 1, Finance and Economic Development Minister, Dr Thapelo Matsheka said the Zero Based Budgeting (ZBB) approach, which emphasised the importance of starting a budget on a clean slate, was used in preparing the financial year 2021/2022 budget.

Such approach, he said, provided a framework to assist Thematic Working Groups (TWGs) and Ministries, Departments and Agencies (MDAs) worked out their funding needs from scratch, thus enabling them to determine the full cost of their budgetary requirements.

“The development will also assist in appropriately prioritising spending plans by directing resources to where their greatest areas of need are, guided by what government can afford,” he added.

He indicated that MDAs had adopted the approach to budgeting as part of government’s fiscal consolidation measures aimed at, among others, efficient allocation of resources, enhancing expenditure quality, reducing and ultimately eliminating wastage and entrenching cost containment.

However, Dr Matsheka said ZBB full benefits were yet to be realised because the reform only begun in June last year in the preparation of the budget for the financial year 2021/2022.

Meanwhile, Dr Matsheka observed that 2020 had been a difficult year because of the unprecedented pressures from increased expenditure against declining revenues.

“The 2021/2022 budget is prepared against the backdrop of continued uncertainties over the recovery of the global and domestic economies,” he said.

Thus, he emphasised the need for a new line of thinking, borrowing largely from key deliverables of the Mid-Term Review of the eleventh National Development Plan and Economic Recovery Transformation Plan.

“Therefore, focus will be on what is achievable during the coming financial year. 

Attention will also be on policy measures and growth strategies that will support the restoration of economic activity and incomes, as well as economic transformation,” he added.

On the other hand, Dr Matsheka indicated that poor value-for-money associated with some ministries featured prominently in previous budget speeches, hence the need to use Public Expenditure Reviews to identify means of improving spending efficiency.

“Coupled with this, is the issue of poor expenditure outcomes. 

Assessment of Public Investment Management by the International Monetary Fund in 2017 also revealed that 37 per cent of the public expenditure on infrastructure goes to waste in Botswana,” Dr Matsheka said. ENDS