08 Feb 2022

Government has emphasised the need to reduce spending and allocate more resources for the financing of development projects, says Finance and Economic Development Minister, Ms Peggy Serame.
Minister Serame, who was presenting the national budget Monday, said during the coming financial year more funds would be diverted from the recurrent budget towards financing development projects.

She said reducing and effectively managing government wage bill would be implemented through the Workforce Planning System being developed through the Botswana Public Service Workforce Strategy and Workforce Plans Project.

Ms Serame said the key objectives of the project included managing government wage bill, promoting workforce flexibility and improving productivity in the public sector. Through the project, she said government would identify where public sector employment could be restructured, hence identifying possible savings in the wage and salary bill.
She said the measure would directly address the problem of the ever-growing wage bill, which was estimated at 16 per cent of GDP in 2020/2021, compared to the acceptable 10 per cent recorded by comparator nations.

Ms Serame said in addition to the ongoing process of rationalisation and restructuring of State Owned Enterprises (SOEs), the size of subventions would be reduced to commercial SOEs.

“Subventions will be further reduced in the coming years, through a combination of requiring commercial SOEs to cover their own costs, improved efficiencies across the SOE sector and SOE rationalisation,” she said.

Minister Serame also said, revenue support grant to local authorities would be reduced, particularly to urban councils, to incentivise them to generate their own revenues to fund own programmes.
On cost containment, Ms Serame said various initiatives had been introduced to contain costs, targeting expenditure that could be reduced without compromising on service delivery.

“Particular attention is being paid to the amount of money spent on scarce skills allowances in the public service, much of which may no longer be justified in terms of the need to recruit and retain employees,” she said.

Similarly, Minister Serame said the amount spent on overtime allowances was excessive, and therefore would be cut back.
She said government also spent large amounts on tuition fees and maintenance allowances for students in tertiary education.
“This is an area of possible cost-sharing with parents, where they have the ability to pay,” Ms Serame said. Ms Serame said extensive consultations would take place before any major changes were introduced.
With regard to the development budget, Minister Serame said government was aware of weaknesses in project implementation that had contributed to inefficiencies in expenditure.
To address the issue, she said the Ministry of Finance and Economic Development was in the process of strengthening the process of project preparation, prioritisation, and value for money assessment for development projects proposed for inclusion in National Development Plan 12.

 In addition, Ms Serame said there would be more rigorous and detailed audits of development projects, to address waste and corruption.
Furthermore, Minister Serame said the primary task with regard to fiscal sustainability was to improve revenue collection and contain expenditure so as to prevent the emergence of growing and unsustainable fiscal deficits.

Ms Serame said the Government Investment Account was a critical financial buffer that was needed to smooth out cash flow fluctuations, given that government revenues were susceptible to economic shocks, and were hence volatile. ENDS