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Why MPs choked P1billion transfer

Minister of Finance and Economic Development, Dr Thapelo Matsheka was on Thursday this week forced to withdraw a request to have P1.1 billion appropriated from the Development Budget to fund shortfalls in Government’s re-current budget owing to unbudgeted increment of public service salaries.

The withdrawal followed a fierce resistance from opposition benches, with the Umbrella for Democratic Change (UDC) threatening to take the matter to court for interdiction. The UDC collectively believed that appropriating money from the development fund to augment shortfalls in the recurrent budget would be at variance with the Public Finance Management Act. The request was tabled on Wednesday before parliament, but consequent to UDC resistance, the matter was referred to the General Assembly [comprising all MPs] which met on Thursday morning for further discussion.

According to Dr Matsheka, at the General Assembly, it was concluded, through the guidance of Attorney General that the request to reallocate funds from the Development Fund to finance projected shortfall in the recurrent budget, as result of the salary adjustments approved after the 2019/2020 budget was concluded, was legal.

 “The opinion from the Attorney General proffered this morning [Thursday] at the General Assembly was that, indeed, the request by my Ministry was legal in terms of the supreme law of this country, which is the Constitution,” Matsheka told parliament when withdrawing the request. Dr Matsheka eventually agreed to withdraw the request in favour of a more agreeable approach.

It has emerged that while Public Finance Management Act forbids what the Minister of Finance proposed before parliament, the ruling party tried to find their way through the constitution, as they believed it is the “supreme law”, enough to relegate the Public Finance Management Act to a mere provision. However, the UDC court action threats were alive, and BDP feared the matter could enter the public domain and cause a stir should the opposition MPs challenge it in court.

WeekendPost also established that, a number of BDP legislators also opposed the request. One MP who opposed the motion from the floor on Wednesday, in presence of President Mokgweetsi Masisi, was Reggie Reatile, the Jwaneng-Mabutsane representative. Prior to reaching parliament, the request was first put before the Finance and Estimates Committee, Chaired by Kanye North lawmaker, Thapelo Letsholo.

Despite the Committee raising concerns with the request, it gave the proposal thumbs up. The committee comprises of Letsholo, Tshekedi Khama (Serowe West), Ignatius Moswaane (Francistown West), Tumisang Healy (Gaborone Central), Wynter Mmolotsi (Francistown South), Dr Kesetegile Gobotswang (Sefhare-Ramokgonami), Liakat Kablay (Letlhakeng-Lephephe), and Oarabile Regoeng (Molepolole North).

The Committee indicated its concern “over diversion of funds allocated to the development projects to finance the recurrent budget.” During his proposal, Dr Matsheka contented that the shortfall in the recurrent budget was an emergence, while the opposition were of the view that the decision to increase salaries in the absence of funds was for political expediency.

“Presidential Directive CAB.1/99 stipulates that only Supplementary Budget requests that arose from emergencies or were not foreseen qualify under this dispensation. Government took a decision to award salary and allowances increases to public servants after the budget process for financial year 2019/2020 was concluded,” Matsheka argued.

INCREMENT OF PUBLIC SERVANT SALARIES WAS NOT BUDGETED FOR  

During the past few months, Government made several commitments, including salary increment for two consecutive financial years as well as adjustment of salaries for public servants within security forces; namely Botswana Defence Force (BDF), Botswana Police Service (BPS) and Botswana Prisons Service (BPS).

A total of four ministries namely: Presidential Affairs, Governance and Public Administration; Basic Education; Local Government and Rural Development; and Defence, Justice and Security, had submitted Supplementary Budget requests to be funded from the Consolidated Fund. The Ministry of Presidential Affairs, Governance and Public Administration requested an additional funds amounting to P12,447,940. The request was to cater for the shortfall arising from adjustment of salaries for public officers for financial year 2019/2020 under the Directorate on Intelligence and Security (DIS).

The salary adjustments of 10 percent, 6 percent and 4 percent, for salary scales A and B; C and D; and E and above, respectively, were announced by Government in March 2019, after the budget for 2019/2020 financial year had been concluded. The salary adjustments were implemented with effect from 1st April, 2019.

The Ministry of Basic Education required a total supplementary funding of P71,234,580. Of this amount, a sum of P60,869,290 was needed to augment the shortfall under the Basic Salary and Allowances accounts at Headquarters, the Department of Out of School Education and Training and the Department of Teaching Service Management. The salaries and allowances accounts need additional funding following Government’s decision to award salary adjustments of 10 percent, 6 percent and 4 percent for various salary 8 grades effective from April 2019.

The remainder of P10,365,290 was intended to cover the shortfall in the Temporary Teachers account of the Department of Secondary Education. The Ministry of Local Government and Rural Development requested additional funding of P260,014,920 comprising P122,517,050 for Revenue Support Grant (RSG) to Councils and P137,497,870 for Social Protection Allowances. Under the RSG, the shortage is caused by increases to staff salaries, allowances and pension contributions, which were affected by the 10 percent, 6 percent and 4 percent salary adjustments.

Councillors’ salaries, termination allowances and other allowances have been increased by various amounts whilst the Ward/Village/Umbrella Development Committees’ allowances were increased by P50 per beneficiary per month. In regard to social protection allowances namely; Destitute Allowance, Disability Allowance and Old Age Pension Scheme, the increases were P50 per beneficiary per month for the first two (2) allowances and P100 per beneficiary per month for Old Age Pension Scheme.

The increases were also announced after the budget for 2019/2020 had been concluded. The Ministry of Defence, Justice and Security requires a total sum of P757,402,760 for Basic Salary and Allowances for three of its departments. These are Botswana Defence Force at P248,353,120; Botswana Police Service at P430,508,030; and Prisons and Rehabilitation for P78,541,610. The additional provision was intended to cover the shortfall caused by the 10 percent, 6 percent and 4 percent salary adjustments, which took effect on 1 st April 2019.

SEVERAL PROJECTS FACED SACRIFICE

In order to mitigate against the crisis, cabinet tried to sacrifice certain projects, which were perceived to be not on time. “Given the increasingly constrained fiscal space, my Ministry has assessed and identified areas of possible savings from slow spending projects funded under the Development Fund to finance the Consolidated Fund Supplementary Estimates requests. “I am proposing reallocations from the 2019/2020 Development Budget of the Ministry of Land Management, Water and Sanitation Services (MLWS).

“In this connection the sum of P1,101,100,200 comprising P800,000,000; P200,000,000 and P101,100,200 from the Water Supply Pipelines; Water Supply and Sanitation Networks; and the Land Development projects respectively, is proposed for reallocation. “These are slow spending projects that are still left with sizeable unspent balances. This proposed reallocation will not have any adverse effect on the annual 10 budgets of the projects concerned nor on the Total Estimated Cost,” Matsheka told parliament.

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