Finance Minister Dr Thapelo Matsheka was blunt in his assessment of the economy on Friday – simply declaring that the recently adopted 2020/21 budget has been put aside as the country squarely battled COVID-19 epidemic.
While the country’s economy was projected to grow by 4.4 percent with all other major sectors of the economy on positive trajectory; everything has been reviewed to the negative.
Money has been shifted to priority areas of fighting the epidemic, including adopting the unpopular decision of putting on hold increasing public servants salaries. While the increment would have consumed P1.4 billion, the ministry of Health and Wellness has requested P2.4 billion to acquire immediate equipment to help fight the disease.
Already, the minister said they have approved the payment of P233 663 828, covering 165 681 employees as beneficiaries the Wage Subsidy for over 12 000 companies that have applied for assistance to meet their obligations to staff.
Government provided a seed funding of P2 billion for the Wage Subsidy Relief Fund administered by the Botswana Unified Revenue Services (BURS) where local companies were invited to apply for salary subsidy of their citizens employees. Local companies and citizens have been invited to contribute to the Relief Fund and by Friday their total contribution was over P60 million.
The subsidy has become necessary as businesses have essentially grounded to a halt due to a lockdown that has been adopted to fight the disease – to cut down infections through social distancing as people have been urged to remain indoors.
Government has continued to urge locals to increase their support to accelerated efforts of fighting the disease. Minister Matsheka has promised that Government will undertake a thorough audit of the Relief Fund to ensure that all money contributed to it have been used appropriately.
To mitigate the effects of closed economy that has thrown thousands into unemployed ranks, Government has adopted Tax Concessions, Loan Guarantees, and looked into the National Strategic Reserves to secure Medical Supplies and offer Psycho-social support to highly affected members of society.
“A total of P114 839 250 has been approved for food hampers for the month of April while P26 230 833 has been approved for temporary workers comprising Social Workers,” the minister said.
The Minister of Mineral Resources, Green Technology and Energy Security, Lefoko Moagi has said mining and particularly diamond sector has been heavily affected by COVID-19.
Moagi when taking questions from the media on Tuesday said that giant diamond mining company, Debswana, has since scaled down its level of productions as diamonds markets are closed.
He buttressed that there is no inspection of rough diamonds by potential buyers due to travel restrictions imposed by countries to control the virus therefore this affects the diamond sales.
“Debswana is open but not fully operational because of the situation that we all see ourselves under. The big market for Botswana rough diamonds being America and other European ones are still in lockdown hence no way diamonds can be transported for sales, it is bad,” he added.
Additionally, he is optimistic that Botswana mining sector will be able to survive high imminent volatility that will be sparked by the disease saying is time to bank into innovation to diversify.
He revealed that Okavango Diamond Company (ODC) has been earmarked as focal point for driving diversification in order to reduce dependence on rough diamonds that are currently the most affected, adding that ODC will do diamond polishing to create jobs locally.
With regards to the energy sector, the minister said the recent adjustment of petrol prices was bound to occur due to the decline of oil in the global market evidenced by USA oil crash.
He therefore insisted that the regulator, Botswana Energy Regulatory Authority (BERA) will do reviews at least in three months depending on how oil will be faring during the lockdown time.