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New schools diet opens a P450 million market

The Government of Botswana through the Ministry of Local Government and Rural Development has introduced a new diet in government schools comprising of additional vegetables, fruits and supplementary feeds like eggs and milk.

These changes in student feeding program which took effect from the beginning of third term this year  is, according to observers, not only enhancing learners diet but will go a long way in empowering local businesses, especially small medium enterprises (SMEs) and community cooperatives. Government funded projects from youth empowerment programmes, women and disabled people schemes, poverty eradication projects are also expected to benefit from the multimillion pula procurements that will arise as a result of the new initiative.

Reports indicate that a total of P455 million has been set aside for the supplementary feeding program this financial year  with the budget expected to double next financial year when the program commence beginning of financial year in April. Masego Ramakgati, an executive at the Ministry of Local Government and Rural Development recently revealed that the feeding augmentation is to reduce the prevalence of malnutrition among primary school pupils who are a target group vulnerable to malnutrition.

“This is a continuous process that seeks to improve the supplementary feeding and empower local farmers,” he highlighted. Within this budget, Councils will prioritize and procure food commodities depending on availability, he explained. The ministry says more food items will be added as and when necessary and subject to availability of funding. The ultimate objective is to provide pupils with a balanced and nutritious meal to curb and minimize the possibility of malnutrition, said Ramakgati.

Government through the ministry of Local Government and other ministries has made funds available for various businesses to empower local communities and unemployed youth.  This initiatives have been facing numerous challenges amongst others lack of ready market for produced goods and product, primarily due to reasons being the projects are run in most cases by semi literate people with little knowledge on market scouting and advertising.

It is expected that as government spending increases under the supplementary feeding undertaking, a readily available gap to purchase this local produce opens especially vegetables and poultry produce. Already government procures local home baked bread for pupil consumption in public schools from local residents on rotational basis. Over 50 % food commodities are imported, mostly from South Africa. This translates into a huge import bill which is estimated at billions of pulas.

Local food production has been observed as a possible route to diversification away from the mining sector. Observers say innovative Agricultural practices would create sustainable long term productive employment in the sector and diversify through value addition as well as building a culture of giving priority to consuming local foods. Currently 70 per cent of Botswana population earn their livelihood from agriculture as farmers, labourers or both, and their mainstay of business was crop production as well as livestock rearing.

Government introduced ISPAAD and LIMID programmes, since the inception of LIMID in 2007, 34 155 projects had been implemented, adding that from that, 20 967 projects were specific to small stock, 5 187 projects to Tswana chickens, 233 projects to guinea fowls, 1 058 projects to animal husbandry and fodder support and 670 projects were towards water development. 370 682 sheep and goats, 117 407 Tswana chickens and 5 825 guinea fowls had been disbursed to beneficiaries.

330 people benefitted under special ISPAAD, and seven community boreholes in the Kgalagadi District had been equipped and water reticulated. During the 2015/16 financial year, 4 896 774 litres of milk were produced locally from 1 131 milking cows, in the the 2015/16 cropping season, a total of 292 033 hectares were ploughed by 75 001 farmers while in the 2016/17 season, 384 065 hectares were planted by 100 200 farmers.

The Agricultural sector which Botswana hopes to explore and reduce her import bill, diversify the economy and create employment, is a highly developed industry in Israel. Israel is a major exporter of fresh produce and a world-leader in "Agricultural research In Israel" agricultural technologies despite the fact that the geography of Israel is not naturally conducive to agriculture. Last week 35 students were sent to Israel for benchmarking purposes.

In 2008 agriculture represented 2.5% of total GDP and 3.6% of exports. While "Farmworker" farm workers made up only 3.7% of the work force. Meanwhile, Israel produced 95% of its own food requirements, supplementing this with imports of grain, oilseeds, meat, coffee, cocoa and sugar, figures which have seen a quadruple growth today.

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Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

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Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

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Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.

This  as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

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