- 2021/22 budget depicts a battered economy
- Calls for resilient economy to absorb shocks
- Minister Matsheka fears for worst in future
The Managing Partner at Grant Thornton Botswana Kalyanaraman Vijay says Botswana should fully explore the Public Private Partnerships (PPPs) to revitalise the economy devastated by Covid-19.
Vijay said it is visible from the budget speech that the economy has been adversely affected by the pandemic, leaving government with no option but to raise taxes and levies to raise funds.
According to him, it was inevitable that government would increase the taxes as the crucial sectors of economy that boosts government coffers in mining and tourism were in recession.
“The budget calls for change of mindset and approach in economic developments. The PPPs projects should be looked up for to generate more job opportunities. The economy is in dire need of transfusion. Sectors such as agriculture should be more capacitated as well,” he said.
The Grant Thornton head honcho also said Finance Minister Dr Thapelo Matsheka’s budget offered a glimpse of hope with regard to digitalisation but said this needs to be well executed. He averred that the budget speech tends to have good development proposals but lack of robust implementation by the government ends up defeating the purpose.
“The situation at which we found the economy in today is not normal. Proper execution of the budget proposals is very important for effective economic recovery. With mining and tourism in recession, the sectors such agriculture should be considered as priority shock absorber,” he said.
Vijay expressed concern that 37% of budget is said to be wasted; adding that this calls for prudent use of the funds. He said the budget deficit would always have negative impact on government coffers; noting that one way of generating revenue is through reducing the high import bill.
The Group CEO and Managing Director of ECONET Hardy Pemhiwa has said developing resilient businesses is critical both during and post the Covid-19 era, urging for robust digitalisation too. Pemhiwa made the call during First National Bank of Botswana (FNBB) annual budget seminar.
He cautioned that Covid-19 is not the last “Black Swan” event that crushed the volatile economies of Africa, saying that the mortality rate of business is close to 40% hence the need for resilient businesses.
“Resilient business is the one with an ability to recover or adapt easily to a misfortune,” he stressed.
The Minister of Finance and Economic Development Dr Thapelo Matsheka said COVID-19 has brought a once-in-a-century shock to Botswana’s economy, Africa and the entire world.
“The impact of the pandemic on economies around the world has also been devastating, with a range of negative impacts, including, reduced or even the negative economic growth, increased the rates of unemployment and poverty, and balance of payments pressures. There have been particular pressures on public finance throughout the world. These will undoubtedly pose the serious challenges for policymakers in the months and years to come,” said the worried Matsheka.