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P600 million for research and innovation

The Ministry of Tertiary Education, Research, Science and Technology (MTERST) has earmarked over P678 million for research, technology and innovation related projects in National Development Plan 11(NDP11).

Minister Dr Alfred Madigele told parliament Thursday that P26 million of the hefty sum will go towards building research capacity.Madigele stated that the funds, which will be administered by Human Resource Development Council (HRDC), will be used to support higher education institutions wiling to carry out research in collaboration with the business sector to exploit new technologies and ideas.

He further stated that currently one of the challenges facing education and training is the lack of specialized skills within some training programmes which result in graduates being unable to cope with industry requirements. He further said that this is probably attributable to lack of effective collaboration between industry and training institutions. He also reaffirmed that there remains a need for effective and sustained collaboration between training institutions and the industry in order to ensure that institutions provide training that is aligned to industry needs and standards.    

Madigele further stated that his ministry has apportioned P100 million to be used to establish national research fund maintaining that the proposed fund will be used to finance research of relevance to the national priorities according to the requirements of the public and private sector.

 “Effective coordination of research science technology and Innovation is crucial for the transformation of Botswana from a scientifically lagging status and factor driven economy to knowledge driven one.” Madigele said. He further said that a national policy on Indigenous Knowledge System (IKS) has been drafted and its development is premised on the recognition of the value of indigenous knowledge system and how they can be leveraged to drive progress in the different spheres.

The research, science, technology and innovation policy was approved in August 2012, to replace the 1998 Science and Technology Policy. Madigele glorified the policy as presenting a new and decisive path towards maximizing benefits associated with science and technology.  

Madigele however conceded that the low participation of females in science, technology, engineering and mathematics remains a challenge that directly and indirectly relate to tertiary education, research, science and technology. He also stated that the country has also continued to be rated low in indicators for innovation such as capacity for innovation, low labour productivity as well as poor work ethics    

Another fund called the Innovation Fund  will be allocated P45,000,000 for the implementation of Indigenous Knowledge System (IKS) policy  while  P9,000,000 will be for the implementation of research, science, technology while the fund for  innovation will be apportioned P72,000,000.  

Madigele also revealed that research funds to the tune of P213, 300,000 have been allocated for climate change research, natural resources and material projects research, ICT and electronics research as well as energy and building materials research.
Other funds in the ministry will go towards the construction of radioactive storage facility, Botswana International University of Science and Technology (BIUST) expansion as well as additional residences of University of Botswana student residences among others.

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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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