22 Sep 2022

The national economy is projected to grow by 4.2 per cent in 2022, driven largely by mining and customs revenue, the Ministry of Finance and Economic Development has revealed.

Outlining contents of the 2023-24 Budget Strategy Paper to the Budget Pitso in Gaborone on Tuesday September 20, Mr Batane Matekane, the Director- Macroeconomic Policy in the ministry said the country’s economic outlook had improved over the current financial year and the upcoming 2023-24 Budget to be delivered early next year was anticipated to be balanced.

He said the projected revenue of P68.5 billion would be an increase of P49.4 billion from the 2020-21 financial year, mainly due to higher mineral revenue collections of P23.2 billion, up from P9.6 billion, driven by Botswana diamonds having a wider market after sanctions were imposed on another diamond producing state, Russia, by North American and European Union (EU) states.

“Customs revenue collection of P14.14 billion projected in the preliminary would also contribute significantly to the country’s financial coffers and the overall projected expenditure would likely give the country a balanced budget with a marginal deficit,” he said.

Notwithstanding the projected growth and balanced budget, driven by mining and non-mining sectors, Mr Matekane said a concern had arisen of inflation being above the Bank of Botswana range, driven by rising food and fuel costs arising from global supply challenges.

Foreign exchange reserves reached P52 billion giving the state import cover of 8.8 months of non-diamond goods and services, he said.

On the performance of the local currency, it was revealed that the nominal Pula exchange rate had appreciated by 0.3 per cent against the South African Rand, but depreciated 5.3 per cent against the Special Drawing Right (SDR) basket of currencies (the United States Dollar, Euro, British Pound, Chinese Yuan and Japanes Yen).

Mr Matekane said government noted that with the eleventh National Development Plan (NDP 11) coming to an end with the current 2022-23 financial year, a need for structural reforms to ensure long-term fiscal sustainability, growing the non-mining export sector and the attainment of national priorities aimed at export led growth and economic transformation were key as the country prepared for NDP 12.

Among the budget priorities outlined by the ministry are digital transformation, value chain development, business environment and reform, infrastructure development as well as sustaining livelihoods.

The key infrastructural needs identified for transformation included energy, health and education facilities, water, rail, roads and technology, Mr Matekane said.

Chief Public Relations Officer in the Ministry of Finance and Economic Development, Ms Keneilwe Segopolo shared some of the views of members of the public submitted to the ministry regarding the budget drawn from social media submissions and through directly engaging the public during the recent Consumer Fair in Gaborone.

Among the primary views raised by the public is the need to address unemployment and job creation, internship allowance increment, tax reduction, land allocation, access to clean water and new physical infrastructure development.

Ms Segopolo said the business community had urged government to provide economic support payment, systemic small, medium and micro enterprise (SMME) support, build capacity of the private sector and ensure that the Ministry of Entrepreneurship was adequately resourced to support domestic entrepreneurs. Ends