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Inside Matambos feeble budget

Minister of Finance and Economic Management, Kenneth Matambo’s national budget presented before parliament this week depicted a gloomy picture of the country’s future, with government expected to experience more budget deficits.


It is the first budget of the National Development Plan 11 (NDP 11) which was approved by parliament in December 2016. According to Matambo, Botswana’s economy has suffered setbacks as it contracted by 1.7 percent in 2015, compared to a positive growth rate of 4.1 percent recorded in 2014.


“This negative growth was mainly due to weak performance of the mining 3 sector, as a result of the reduction in diamond and copper production by 15.6 percent and 35 percent, respectively, during the year. The non-mining sectors also registered a lower growth of 1.7 percent in 2015 compared to 4.9 percent in 2014, reflecting the impact of water and electricity disruptions on the rest of the economy,” he informed parliament.


In the 2016/17 budget, Matambo informed parliament about the performance of public enterprises, something which he omitted in this year’s budget.  Last year Matambo informed parliament that some state owned enterprises such as; Botswana Development Corporation, Botswana Telecommunications Corporation Limited, Botswana Communications Regulatory Authority, Botswana Housing Corporation, and Botswana Savings Bank, made profit, others, which include; Water Utilities Corporation, Air Botswana, National Development Bank, and Botswana Meat Commission, recorded operational losses.


W UC, Air Botswana, BMC, NDB and BPC have been making perennial losses for the consecutive years running. It was recorded in last year’s budget speech that WUC, recorded a net loss of P367.0 million in 2015 up from P361.0 million in 2014; Air Botswana made a net loss of P165 million in 2015 compared to, P100 million in 2014; NDB registered a net loss of P37.2 million in 2015 compared to a net loss of P86.3 million in 2014; BMC registered a net loss of P9.6 million in 2014, after registering a net profit of P25 million in 2013.


Matambo informed parliament that the country continues to be heavily dependent on exports and revenues from diamonds. As at end of 2015, diamond exports accounted for 83.1 percent of total exports with mineral revenue accounting for 30.4 percent share of total Government revenue, he said.


“There is need to diversify our exports, which have remained the same and largely dominated by diamonds. It is for this reason that, the development of diversified sources of economic growth and revenue was identified as one of the priority areas to be pursued during NDP 11. Hence, besides consolidating on achievement made on structural economic transformation, export diversification should be the main objective going forward,” he stated.


Matambo has admitted the manner in which the country’s economy is perfoming and the projected growth is not succifient to solve the problems facing the country especially unemployment which has becoming the troublesome issue in Botswana’s politics. During the NDP 10, which ends in March 2017, Botswana’s economy grew on average by about 3.8 percent. The economy is also forecast to grow at an average of about 4.4 percent per annum over the entire NDP 11.


“These growth rates are lower than the early 1980s rates of 7 to 9 percent and SADC regional target of 5 percent. Such rates are not sufficient to adequately address development challenges of; unemployment, poverty eradication, and income inequality,” he said.
Matambo has added that in the wake of the current financial challenges that the Government is experiencing and also given the volatility of the Custom and Excise revenues, it is paramount that Government continues to exercise prudence in the management of its financial resources and also devise new ways of widening its revenue base.


“Ministry will undertake a holistic simplification of both the Income Tax Act and the Value Added Tax Act with a view to developing a Tax Administration Act. This is intended to improve tax administration efficiency, resulting in optimal revenue collection,” he said.


The ministry of finance is also considering proposals from the Taxation Review Committee which include, introduction of Transfer Pricing rules in the Income Tax Act that would curb any undesirable tax avoidance as well as underscore the alignment of this country’s tax system to international best practice; amending the Income Tax Act, among others, to impose a penalty for non-filers irrespective of whether there is any tax to pay or not; and amending the Value Added Tax Act to include sale of property by a Deputy Sheriff as a taxable transaction.


TOP 5 MINISTRIES – RECURRENT BUDGET ALLOCATION
Basic Education-P6.8 billion  
Health and Wellness- P6.6 billion
Local Government and Rural Development- P5.6 bilion
Defence, Justice and Security-  P5 billion  
Tertiary Education Research, Science and Technology- P4.3 billion

TOP 5 MINISTRIES- DEVELOPMENT BUDGET ALLOCATION

Ministry of Mineral Resources, Green Technology and Energy Security- P2.9 billion
Ministry of Land Management, Water and Sanitation Services- P2.8 billion
Ministry of Defence, Justice and Security- P2.76 billion
Ministry of Local Government and Rural Development – P1.74 billion
Ministry of Transport and Communications-P1.74 billion

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Masisi to dump Tsogwane?

28th November 2022

Botswana Democratic Party (BDP) and some senior government officials are abuzz with reports that President Mokgweetsi Masisi has requested his Vice President, Slumber Tsogwane not to contest the next general elections in 2024.

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African DFIs gear to combat climate change

25th November 2022

The impacts of climate change are increasing in frequency and intensity every year and this is forecast to continue for the foreseeable future. African CEOs in the Global South are finally coming to the party on how to tackle the crisis.

Following the completion of COP27 in Egypt recently, CEOs of Africa DFIs converged in Botswana for the CEO Forum of the Association of African Development Finance Institutions. One of the key themes was on green financing and building partnerships for resource mobilization in financing SDGs in Africa

A report; Weathering the storm; African Development Banks response to Covid-19 presented shocking findings during the seminar. Among them; African DFIs have proven to be financially resilient, and they are fast shifting to a green transition and its financing.

COO, CEDA, James Moribame highlighted that; Everyone needs food, shelter and all basic needs in general, but climate change is putting the achievement of this at bay. It is expensive for businesses to do business, for instance; it is much challenging for the agricultural sector due to climate change, and the risks have gone up. If a famer plants crops, they should be ready for any potential natural disaster which will cost them their hard work.

According to Moribame, Start-up businesses will forever require help if there is no change.

There is no doubt that the Russia- Ukraine war disrupted supply chains. SMMEs have felt the most impact as some start-up businesses acquire their materials internationally, therefore as inflation peaks, this means the exchange rate rises which makes commodities expensive and challenging for SMMEs to progress. Basically, the cost of doing business has gone up. Governments are no longer able to support DFIs.

Moribame shared remedies to the situation, noting that; What we need is leadership that will be able to address this. CEOs should ensure companies operate within a framework of responsible lending. They also ought to scout for opportunities that would be attractive to investors, this include investors who are willing to put money into green financing. Botswana is a prime spot for green financing due to the great opportunity that lies in solar projects.

Technology has been hailed as the economy of the future and thus needs to be embraced to drive operational efficiency both internally and externally.

Executive Director, bank of Industry Nigeria, Simon Aranou mentioned that for investors to pump money to climate financing in Africa, African states need to be in alignment with global standards.

Do what meets world standards if you want money from international investors. Have a strong risk management system. Also be a good borrower, if you have a loan, honour the obligation of paying it back because this will ensure countries have a clean financial record which will then pave way for easier lending of money in the future. African states cannot just be demanding for mitigation from rich countries. Financing needs infrastructure to complement it, you cannot be seating on billions of dollars without the necessary support systems to make it work for you. Domestic resource mobilisation is key. Use public money to mobilise private money. He said.

For his part, the Minster of Minister of Entrepreneurship, Karabo Gare enunciated that, over the past three years, governments across the world have had to readjust their priorities as the world dealt with the effects and impact of the COVID 19 pandemic both to human life and economic prosperity.

The role of DFIs, during this tough period, which is to support governments through countercyclical measures, including funding of COVID-19 related development projects, has become more important than ever before. However, with the increasingly limited resources from governments, DFIs are now expected to mobilise resources to meet the fiscal gaps and continue to meet their developmental mandates across the various affected sectors of their economies. Said Gare.

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TotalEnergies Botswana launches Road safety campaign in Letlhakeng

22nd November 2022

Letlhakeng:TotalEnergies Botswana today launched a Road Safety Campaign as part of their annual Stakeholder Relationship Management (SRM), in partnership with Unitrans, MVA Fund, TotalEnergies Letlhakeng Filling Station and the Letlhakeng Sub District Road Safety Committee during an event held in Letlhakeng under the theme, #IamTrafficToo.

The Supplier Relationship Management initiative is an undertaking by TotalEnergies through which TotalEnergie annually explores and implements social responsibility activities in communities within which we operate, by engaging key stakeholders who are aligned with the organizations objectives. Speaking during the launch event, TotalEnergies Operations and HSSEQ, Patrick Thedi said, We at TotalEnergies pride ourselves in being an industrial operator with a strategy centered on respect, listening, dialogue and stakeholder involvement, and a partner in the sustainable social and economic development of its host communities and countries. We are also very fortunate to have stakeholders who are in alignment with our organizational objectives. We assess relationships with our key stakeholders to understand their concerns and expectations as well as identify priority areas for improvement to strengthen the integration of Total Energies in the community. As our organization transitions from Total to Total Energies, we are committed to exploring sustainable initiatives that will be equally indicative of our growth and this Campaign is a step in the right direction.

As part of this campaign roll out, stakeholders will be refurbishing and upgrading and installing road signs around schools in the area, and generally where required. One of the objectives of the Campaign is to bring awareness and training on how to manage and share the road/parking with bulk vehicles, as the number of bulk vehicles using the Letlhakeng road to bypass Trans Kalahari increases. When welcoming guests to Letlhakeng, Kgosi Balepi said he welcomed the initiative as it will reduce the number of road incidents in the area.

Also present was District Traffic Officer ASP, Reuben Moleele, who gave a statistical overview of accidents in the region, as well as the rest of the country. Moleele applauded TotalEnergies and partners on the Campaign, especially ahead of the festive season, a time he pointed out is always one with high road statistics. The campaign name #IamTrafficToo, is a reminder to all road users, including pedestrians that they too need to be vigilant and play their part in ensuring a reduction in road incidents.

The official proceedings of the day included a handover of reflectors and stop/Go signs to the Letlhakeng Cluster from TotalEnerigies, injury prevention from tips from MVAs Onkabetse Petlwana, as well as bulk vehicle safety tips delivered from Adolf Namate of Unitrans.

TotalEnergies, which is committed to having zero carbon emissions by 2050, has committed to rolling out the Road safety Campaign to the rest of the country in the future.

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