The economy performed slightly better than originally forecast for the National Development Plan 10, this is according to Dr. Taufila Nyamadzabo, Secretary, Economic and Financial Policy at the Ministry of Finance and Economic Development
A modest structural transformation occurred with the non-mining sectors of: Trade, Hotels and Restaurants; and Banks, Insurance & Business Services, playing a major role in driving the economy, with Govt. also improving slightly. Dr Nyamadzabo observed that this calls for concerted diversification effort with more emphasis on export-led-growth. When it comes to Sector Contribution during NDP 10, the Mining sector on average declined by 3.4 percent, the non-mining sector grew by 5.6 percent cushioning the decline of real GDP.
The Financial Policy Secretary shared his observations when making a Presentation of the draft NDP 11 macroeconomic chapters recently where he observed that to achieve the theme of NDP 11 of “Inclusive Growth for the Realisation of Sustainable employment Creation and Poverty Eradication” thorough strategies be adopted. He called for the development of diversified sources of growth; Eradication of Poverty & Reduction of Income Inequalities; Strengthening Social Protection Programmes; and Enhancing Government implementation capacity, among other strategies. Government Budget
Dr Nyamadzabo indicated that total Revenues are estimated at P295.0 billion during NDP10. He said revenue driven by Mineral Revenue was 34.9% of total revenues and Customs & Excise accounted for 27.1%, indicating the need to strengthen diversification efforts in order to increase and diversify the revenue base. Non-mineral Income Tax stood at 17.2% and value Added Tax is 12.2%.
“Government expenditure is estimated at P304.0 billion during NDP10 and Recurrent expenditure, mainly wages & salaries is the major driver for total spending, accounting for 74.0% while Development Expenditure accounts for 26.0%. Recurrent Budget is estimated at P225.4 billion while the Development Budget is estimated at P76.8 billion. Net Lending is estimated at P1.7 billion.”
Dr Nyamadzabo said while Government expenditure stimulates growth, it has the potential to crowd out private sector growth and reverse diversification efforts. Therefore, there is need to stimulate private sector growth and attract investment, including FDI, he said.
“There has been relatively higher growth in recurrent than development expenditure hence there is need to account for recurrent cost arising from development expenditure (i.e., maintenance requirement, utilities, wages& salaries). Overall, the budget balance indicates an estimated deficit of P8.4 billion, or – 5.6% of GDP, over the Plan period, as against P31.9 billion projected.”
According to Dr Nyamadzabo, developing diversified sources of growth is priority. He observed that there is need to push further on Beneficiation, cluster development, Special Economic Zones, EDD, SMMEs & Informal Sector, Natural Resources & Climate Change, and Promoting Local Economy Development. He further stressed on Export -Led Growth Strategy and Domestic Expenditure as a Source of Growth and Employment Creation.
He also emphasised on ensuring a conducive environment for private sector growth and employment creation. He said it critical to maintain macroeconomic stability; a sound regulatory framework for Doing Business and Global Competitiveness; well thought out infrastructure development; labour productivity and skills development; and land servicing, among other things.
On the eradication of poverty and reduction of income inequalities, Dr Nyamadzabo said sustainable livelihoods for the poor could be achieved by accelerating job creation through economic diversification and broad based growth on the one hand, and strengthening human development of the poor on the other. He said access to basic services like health, education and water provision is fundamental. He said there is need to break the cycle of child poverty, by unpacking and addressing it in detail in the context of inclusive growth.
He called for the provision of social safety nets and other measures to address poverty. He stressed on the development of the informal sector and SMMEs; citizen economic empowerment programmes; Developing and improving productivity of the agricultural sector; Ensuring affirmative action to promote equal opportunities and equal treatment to cater for vulnerable groups, including women, elderly and people with disabilities, etc.
Enhancing Govt. implementation capacity Dr Nyamadzabo said it is of paramount importance to Improve the overall coordination of the implementation of Government programmes. He said establishing project implementation units to undertake mega projects; Re-engineering the tendering and adjudication processes to ensure speedy delivery of projects; Enforcing sanctions as per the contracts; could be some of the solutions.
In addition, Dr Nyamadzabo emphasised on blacklisting companies that perennially fail to complete projects on time and budget; Implementing the privatisation policy as well as the public service reforms, outsourcing programme; Increasing the use of the Public-Private Partnerships (PPPs) project delivery mechanism; and, Implementing an effective and efficient national monitoring and evaluation system. Macroeconomic projections for NDP 11 According to Dr Nyamadzabo budget deficits are projected for the first three years of NDP 11. But he further shared that slight budget surpluses are projected over the last half of the Plan period with a cumulative surplus of P1.05 billion being projected for the entire NDP11.
CONCLUSION Dr Nyamadzabo said the review of NDP10 shows that low growth rates, undiversified economy, and continued dependency on mineral revenue and Customs & Excise, call for more effort to be put in growing the economy and expanding the revenue base.
He said the development challenges of unemployment, poverty, income inequality must be tackled hard. He said these could be achieved through implementation of sustainable policies, strategies and programmes that can create more employment opportunities and eradicate poverty.
Like its predecessor plans, NDP11 recognises the need to strengthen diversification efforts; more emphasis will be placed on: promoting exports; increasing private sector participation through Privatisation, Outsourcing of core activities and PPPs in order to ease the burden on Government.
Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.
Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.
She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”
Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.
On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.
“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.
One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.
The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”
The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.
Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.
Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.
The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.
The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.
Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.
This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.
He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.
Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”
He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.
Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.
“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.
In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”
In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.
He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.” Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.
Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.
He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”
Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.
“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.
“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said. Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.
Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.
The Global Gender Gap Index, a report published by the World Economic Forum annually, has indicated that Botswana is among countries that fare badly when it comes to representation of women in legislative bodies.
The latest Global Gender Gap Index, published last week, benchmarks the current state and evolution of gender parity across four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment). It is the longest-standing index which tracks progress towards closing these gaps over time since its inception in 2006.
This year, the Global Gender Gap Index benchmarked 146 countries. Of these, a subset of 102 countries have been represented in every edition of the index since 2006, further providing a large constant sample for time series analysis.
Botswana ranks number 66 overall (out of 146 countries), with good rankings in most of the pillars. Botswana ranks 1st in Health and Survival, 7th in the Economic Participation and Opportunity, 22nd in Educational Attainment, and 129th in Political Empowerment.
The Global Gender Gap Index measures scores on a 0 to 100 scale and scores can be interpreted as the distance covered towards parity (i.e. the percentage of the gender gap that has been closed). The cross-country comparisons aim to support the identification of the most effective policies to close gender gaps.
The Economic Participation and Opportunity sub-index contains three concepts: the participation gap, the remuneration gap and the advancement gap. The participation gap is captured using the difference between women and men in labour-force participation rates. The remuneration gap is captured through a hard data indicator (ratio of estimated female-to-male earned income) and a qualitative indicator gathered through the World Economic Forum’s annual Executive Opinion Survey (wage equality for similar work).
Finally, the gap between the advancement of women and men is captured through two hard data statistics (the ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers).
The Educational Attainment sub-index captures the gap between women’s and men’s current access to education through the enrolment ratios of women to men in primary-, secondary- and tertiary-level education. A longer-term view of the country’s ability to educate women and men in equal numbers is captured through the ratio of women’s literacy rate to men’s literacy rate.
Health and Survival sub-index provides an overview of the differences between women’s and men’s health using two indicators. The first is the sex ratio at birth, which aims specifically to capture the phenomenon of “missing women”, prevalent in countries with a strong son preference. Second, the index uses the gap between women’s and men’s healthy life expectancy.
This measure provides an estimate of the number of years that women and men can expect to live in good health by accounting for the years lost to violence, disease, malnutrition and other factors. Political Empowerment sub-index measures the gap between men and women at the highest level of political decision-making through the ratio of women to men in ministerial positions and the ratio of women to men in parliamentary positions. In addition, the reported included the ratio of women to men in terms of years in executive office (prime minister or president) for the last 50 years.
In the last general elections, only three women won elections, compared to 54 males. The three women are; Nnaniki Makwinja (Lentsweletau-Mmopane), Talita Monnakgotla (Kgalagadi North), and Anna Mokgethi (Gaborone Bonnington North). Four women were elected through Specially Elected dispensation; Peggy Serame, Dr Unity Dow, Phildah Kereng and Beauty Manake. All female MPs — save Dow, who resigned — are members of the executive.
Overall, Botswana has 63 seats, all 57 elected by the electorates, and six elected by parliament. Early this year, Botswana Democratic Party (BDP) secretary general and Gaborone North MP, Mpho Balopi, successfully moved a motion in parliament calling for increment of elective seats from 57 to 61. Balopi contented that population growth demands the country respond by increasing the number of MPs.
In Africa, Botswana play second fiddle to countries like Rwanda, Namibia, South Africa, Burundi, and Zimbabwe who have better representation of women, with Rwanda being the only country with more than 50 percent of women in parliament.
The low number of women in parliament is attributed to Botswana’s current, electoral system, First-Past-the-Post. During the 9th parliament, then MP for Mahalapye East tabled a motion in parliament in which she sort to increase the number of Specially Elected MPs in parliament to augment female representation in the National Assembly.
The motion was opposed famously, by then Specially Elected MP, Botsalo Ntuane, who said the citizens were not in favour of such a move since it dilute democracy, instead suggesting the Botswana should switch to Proportional-Representation-System. Botswana is currently undergoing Constitutional Review process, with the commission, appointed in December, expected to deliver the report to President Mokgweetsi Masisi by September this year.