Connect with us

Entrepreneurs deaf to the Budget Speech

While the nation stopped everything and sat down to listen to Dr Thapelo Matsheka’s much anticipated Budget Speech which opens the country’s financial year, a small segment of the population who are referred to as entrepreneurs, were unfazed.

This is despite Matsheka’s Speech this week, which was directed more to that populous, and the current government’s stance on trying to share the economic burden of economic diversification with the private sector. Botswana wishes to see manufacturing meeting a big wave of industrialization and a big bang of young minds exploding while riding on the new 4th Industrial Revolution cloud, all towards the promised city; the high income economy.

Ministers and politicians who spoke to this publication after the reading of the Budget Speech have been saying government needs to empower the private sector for economic diversification. When coming from an international trip, President Mokgweetsi Masisi also made it clear that his government will not take responsibility for unemployment alone, as it should also be on the shoulders of the private sector.

Government will be, “creating a conducive environment for development, this is a deliberate effort by the Government to promote development of the private sector, which should be the source of economic growth and creation of employment opportunities, especially for the youth,” this should have been directed to ears of the private sector or the entrepreneurs.

On his personal LinkedIn profile, Matsheka may have had entrepreneurs on his mind when he said, “I am passionate about the development of people as they are the best legacy you can ever create for the country. Focus on people is the theme of my professional development. I just love to see them grow and achieve.”

But an entrepreneur, often described as one who conceptualizes a different and sometimes a unique idea into a business while taking risks without any source of funding but hoping for profit, does not put much attention on what Matsheka was saying when reading the Budget Speech.

However most of the entrepreneurs called to a panel discussion for the budget review by First National Bank Botswana this week, especially the young Ebraim Mahomed, see the Budget Speech as “nice like a movie…but half of it does not affect me.”
Mahomed said the budget is a framework for one to succeed and whatever may be seen as negative in the budget he sees it as a loophole waiting to be exploited and as a problem solver get positivity out of any opportunity that may arise. He said despite spite a long speech by the Minister of finance, an entrepreneur ought to “do your thing.”

Even though he did not put much emphasis on the speech, Tony Mautsu, another young entrepreneur said when he heard about more money being allocated to the defence assets, especially that he is not in that business of armaments, he asked why government invested more on these defence assets despite the country never being vulnerable to attacks.

Agri-entrepreneur Pearl Ranna, however was more perceptive and did not shy away from the opportunity to criticize government on continuing with what she called ‘‘failed agriculture programs’’ referring to the National Master Plan for Arable Agriculture and Dairy Development (NAMPAAD) and Integrated Support Programme for Arable Agriculture Development (ISPAAD) which she described as ‘‘useless’’.

Former lawyer, Lerumo Mogobe said the budget inspired him because it was being read by someone who was with the private sector. Matsheka was also with Citizen Entrepreneurial Development Agency (CEDA), an agency that funds entrepreneurial projects.

Continue Reading


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.

This content is locked

Login To Unlock The Content!

Continue Reading


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.

This content is locked

Login To Unlock The Content!

Continue Reading


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”

Continue Reading
Do NOT follow this link or you will be banned from the site!