14 Jun 2022

Botswana continues to pride itself with maintenance of a strong, stable and predictable institutional framework that provides support for enduring macroeconomic stability.

Ministry of Finance and Economic Development’s, secretary for development and budgeting, Mr Olesitse Masimega said the good standing was attested to by the rating agencies; Moody’s as well as Standard & Poor’s in their regular rating review as well as successive International Monetary Fund(IMF) article IV surveillance missions. 

He said this during the ongoing IMF high level conference in Gaborone on Monday, cautioning that the country should, however, not rest on its laurels as the more recent ratings on governance and corruption showed a deterioration, which should be addressed decisively.

He said there was need for clarity on bounds and definitions of good governance and corruption, as it was often difficult to recognise inappropriate behaviour and unethical conduct under the strict jurisdiction of poor governance or corruption.

He said weak governance and corruption not only constrain service delivery and economic activity, but generally raised costs. 

Mr Masimega added that such a state affected government budget, given the continuous allocation of resources to government programmes and utility providers that did not generate the requisite outcomes.

“The cost of procurement can be unreasonably high and prolonged, moreover there  can be significant claims on government and other institutions associated with unprocedural procurement as the cost of doing business tend to rise, thus reducing  prospects for employment and profitability,” he said.

Mr Masimega said weak governance and corruption ultimately delay transition from poverty and neutralisation of inequality.

An environment  of weak  governance and corruption, he said, also tended to undermine project execution for both businesses and individuals, therefore extending the time between capital allocation and generation of project cash flows.

He said this could lead to an increase in loan defaults, which could worsen asset quality of lending institutions and threaten financial stability in the case where borrowed funds were involved.

Mr Masimega noted the possibility of weak governance and corruption scaring away foreign investors and  potential business partners that could support economic expansion and moderation.

 He, therefore, said the high level conference should strive to navigate and explore the relevance of good governance and the fight against corruption on economic performance and stability. BOPA