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Can P 1.6 billion stimulate the economy?

Ndulamo Anthony Morima
EAGLE WATCH

When the Minister of Finance & Development Planning, Honourable Kenneth Matambo, presented this year’s budget speech many expected that the funds allocated for the Economic Stimulus Programme (ESP) projects will be significant enough to stimulate the economy.

However, Hon. Matambo intermittently mentioned ESP projects across ministries worth a meagre P1.6 billion. If this is all that has been reserved for the ESP this year the question is: can P1.6 billion Pula stimulate the economy which experienced a mere 1% growth in 2015?

At P1.6 billion, ESP projects constitute a mere 2.8% of the estimated expenditure of 54.44 billion Pula for 2016. The question is: can 2.8% of a country’s annual expenditure really fast track its infrastructure development, job creation and human capital development as envisaged under the ESP?

Before answering this question it is only fair that we consider the areas that will be targeted by the ESP. According to the budget the projects include rural electrification (P257 million); road projects (P250 million); and eradication of backlog of primary school facilities, village infrastructure and construction of customary courts (P 315.04 million).

The ESP projects also include building of teachers’ houses, classrooms and laboratories (P440.35 million); accelerating ongoing programmes at the Ministry of Lands & Housing (P272.9 million); Grey water re-use, Lotsane irrigation project, Glenn Valley infrastructure rehabilitation, grading of roads and Agriculture Service Centers (P35 million) and poverty eradication (P50 million).

The question is: are these projects of such a magnitude and nature that they would breathe new life into our economy? I am inclined to believe that they won’t because the funds are so insignificant that they will be spread so thinly that they will not make much difference. At least 10% of the estimated expenditure for 2016, i.e. P 5.4 billion is required to stimulate Botswana’s economic growth.

P1.6 billion for a government is equivalent to about P 160.00 for an individual. Can P 160.00 really stimulate an individual’s economy? One may say it depends on an individual’s financial position but the objective truth is that P 160.00 cannot meaningfully stimulate in individual’s economy. Similarly, P1.6 billion cannot stimulate the economy of a country as Botswana. It can be a stimulus for such small economies as Lesotho and Swaziland, not Botswana.      

This is true especially because about 10% will go towards administrative expenditure which will not necessarily improve our people’s lives. Also, while another 5% will be lost through wasteful expenditure and other unforeseen circumstances the other 5% will be lost through corruption and economic crime.

Also, the projects earmarked for the ESP are not of such ‘outside the box’ nature that they can bring growth to the economy. These are ‘business as usual’ projects and the only thing that government can achieve through the ESP is completion of delayed or abandoned projects, not economic stimulation. In its current form the ESP is more of a Project Completion Plan (PCP) than an economic stimulus plan.

By way of illustration, among all the ESP allocations Agriculture is the lowest at P35 million. Is it not Agriculture that, if properly funded and implemented, would really stimulate our economy? Has government not lamented the fact that the percentage contribution of Agriculture to the Gross Domestic Product (GDP) has continued to decline. According to the World Bank, value added Agriculture (% of GDP) in Botswana was last measured at 2.37 in 2014. Certainly, P35 million, especially against the backdrop of a deficit budget cannot raise this to acceptable levels.

That notwithstanding, the Grey water re-use, Lotsane irrigation project, Glenn Valley infrastructure rehabilitation, grading of roads and up grading Agriculture Service Centers have to be commended for they will go a long way in promoting Agriculture in the respective arears. Rural electrification and road projects too have to be commended for they will also go a long way in promoting Agriculture in rural arears.  

While building of teachers’ houses, classrooms and laboratories is commendable the question is: will it bring the economic stimulation that warrants the 34% allocation it got from the ESP pie? Put bluntly, is the P440.35 million allocated for building of houses, classrooms and laboratories really meant for economic stimulation or appeasement of teachers for the ruling Botswana Democratic Party(BDP)’s political mileage? In my view, it is meant for the latter.

The eradication of backlog of primary school facilities, village infrastructure and construction of customary courts will not stimulate the economy, but are mere efforts by government to complete the projects it failed to complete during the time they had been budgeted for. The same applies to the P 272.9 million allocated for the so-called “accelerating on-going programmes” under the Ministry of Lands and Housing.

The other question is: can you stimulate the economy through the poverty eradication projects that have failed to boost our economy for the past ten years now? It is common knowledge that despite President Lieutenant General Seretse Khama Ian Khama’s emphasis on poverty eradication projects our people’s lives have hardly improved.

Many villages are littered with failed back yard gardens and poultry projects which cost government a lot of money, but fail to improve food security for our people. The only people who benefit are civil servants who are paid such allowances as mileage, subsistence and meal allowances when visiting the projects, suppliers who sell the equipment and consumables used for the projects and government which collects income tax and Value Added Tax (VAT).

Would it not have been better to allocate the P50 million allocated for poverty eradication to such production based sectors as manufacturing? I have never understood why we cannot manufacture such leather products as bags, belts, shoes and such adhesives as glue despite slaughtering thousands of cattle yearly at the Botswana Meat Commission (BMC). If P50 million were allocated for this it will go a long way in stimulating the manufacturing sector.

There is no doubt that rural electrification, roads construction and land servicing are important, but they do not necessarily result in economic stimulation. Government has, even in 2015, spent billions of Pula in these undertakings yet we suffered poor economic growth.              

The other factor that will make the P1.6 billion ESP budget of little or no consequence is the P6 billion budget deficit. The fact that Hon. Matambo has stated that the budget deficit is expected to be financed from domestic and foreign borrowings augmented by drawings from our foreign reserves ( which stood at P35 billion as at December 2015) does not make the situation better in my view.

It is common knowledge that any form of borrowing comes at a cost in the form of interest and other credit related costs. Therefore, financing a budget deficit through borrowings does not necessarily result in real economic growth. It only results in artificial short term growth since the ‘growth’ is invariably reversed when repayments are made.

In my view, therefore, it would have been better to have a surplus or at least a balanced budget rather than creating a budget deficit in part due to the P1.6 billion for the ESP projects that are unlikely to jump-start our economy in any meaningful way.

I know that according to British Economist, Richard Ferdinand Kahn (1905-1989)’s ‘multiplier effect’ theory though government’s P1.6 billion spending will generate new consumption, it will also generate "new" tax revenues in the form of VAT, for example. In theory, it is this revenue that will be used to stimulate the economy.

According to Kahn, although the government will spend P1.6 billion, it is likely to receive a significant proportion of the P1.6 billion in due course, making the net expenditure much less than P1.6 billion. Indeed, in theory this is possible if the initial expenditure is targeted well, but I am not persuaded that these ESP projects are well targeted.

Therefore, in my view, instead of stimulating the economy this P1.6 billion will only further enrich the 1% being our country’s rich moguls and further impoverish the 99% being our country’s poor. Put differently, the ESP will only further widen the gap between the rich and the poor.

Politically, especially in rural arears and among the poor, the ESP may win the BDP short-term support because it gives such people the impression that the BDP government cares about their lives. While there is no doubt that the BDP government cares about their lives, the truth is that this ESP is an ill-conceived way of demonstrating such care and the ill-gained voter support will be lost the moment the voters realize that they have been taken for a ride.

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The Daring Dozen at Bari

8th December 2020
JEFF---Batswana-smoke-unit

Seventy-seven years ago, on the evening of December 2, 1943, the Germans launched a surprise air raid on allied shipping in the Italian port of Bari, which was then the key supply centre for the British 8th army’s advance in Italy.

The attack was spearheaded by 105 Junkers JU88 bombers under the overall command of the infamous Air Marshal Wolfram von Richthofen (who had initially achieved international notoriety during the Spanish Civil War for his aerial bombardment of Guernica). In a little over an hour the German aircraft succeeded in sinking 28 transport and cargo ships, while further inflicting massive damage to the harbour’s facilities, resulting in the port being effectively put out of action for two months.

Over two thousand ground personnel were killed during the raid, with the release of a secret supply of mustard gas aboard one of the destroyed ships contributing to the death toll, as well as subsequent military and civilian casualties. The extent of the later is a controversy due to the fact that the American and British governments subsequently covered up the presence of the gas for decades.

At least five Batswana were killed and seven critically wounded during the raid, with one of the wounded being miraculously rescued floating unconscious out to sea with a head wound. He had been given up for dead when he returned to his unit fourteen days later. The fatalities and casualties all occurred when the enemy hit an ammunition ship adjacent to where 24 Batswana members of the African Pioneer Corps (APC) 1979 Smoke Company where posted.

Thereafter, the dozen surviving members of the unit distinguished themselves for their efficiency in putting up and maintaining smokescreens in their sector, which was credited with saving additional shipping. For his personal heroism in rallying his men following the initial explosions Company Corporal Chitu Bakombi was awarded the British Empire Medal, while his superior officer, Lieutenant N.F. Moor was later given an M.B.E.

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A Strong Marriage Bond Needs Two

8th December 2020

Remember: bricks and cement are used to build a house, but mutual love, respect and companionship are used to build a HOME. And amongst His signs is this: He creates for you mates out of your own kind, so that you may find contentment (Sukoon) with them, and He engenders love and tenderness between you; in this behold, there are signs (messages) indeed for people who reflect and think (Quran 30:21).

This verse talks about contentment; this implies companionship, of their being together, sharing together, supporting one another and creating a home of peace. This verse also talks about love between them; this love is both physical and emotional. For love to exist it must be built on the foundation of a mutually supportive relationship guided by respect and tenderness. As the Quran says; ‘they are like garments for you, and you are garments for them (Quran 2:187)’. That means spouses should provide each other with comfort, intimacy and protection just as clothing protects, warms and dignifies the body.

In Islam marriage is considered an ‘ibaadah’, (an act of pleasing Allah) because it is about a commitment made to each other, that is built on mutual love, interdependence, integrity, trust, respect, companionship and harmony towards each other. It is about building of a home on an Islamic foundation in which peace and tranquillity reigns wherein your offspring are raised in an atmosphere conducive to a moral and upright upbringing so that when we all stand before Him (Allah) on that Promised Day, He will be pleased with them all.

Most marriages start out with great hopes and rosy dreams; spouses are truly committed to making their marriages work. However, as the pressures of life mount, many marriages change over time and it is quite common for some of them to run into problems and start to flounder as the reality of living with a spouse that does not meet with one’s pre-conceived ‘expectations’. However, with hard work and dedication, couples can keep their marriages strong and enjoyable. How is it done? What does it take to create a long-lasting, satisfying marriage?

Below are some of the points that have been taken from a marriage guidance article I read recently and adapted for this purposes.

POSITIVITY
Spouses should have far more positive than negative interactions. If there is too much negativity — criticizing, demanding, name-calling, holding grudges, etc. — the relationship will suffer. However, if there is never any negativity, it probably means that frustrations and grievances are not getting ‘air time’ and unresolved tension is accumulating inside one or both partners waiting to ‘explode’ one day.

“Let not some men among you laugh at others: it may be that the (latter) are better than the (former): nor let some women laugh at others: it may be that the (latter) are better than the (former): nor defame nor be sarcastic to each other, nor call each other by (offensive) nicknames.” (49:11)

We all have our individual faults though we may not see them nor want to admit to them but we will easily identify them in others. The key is balance between the two extremes and being supportive of one another. To foster positivity in a marriage that help make them stable and happy, being affectionate, truly listening to each other, taking joy in each other’s achievements and being playful are just a few examples of positive interactions.
Prophet Muhammad (PBUH) said: “The believers who show the most perfect faith are those who have the best character and the best of you are those who are best to their wives”

UNDERSTANDING

Another characteristic of happy marriages is empathy; understanding your spouses’ perspective by putting oneself in his or her shoes. By showing that understanding and identifying with your spouse is important for relationship satisfaction. Spouses are more likely to feel good about their marriage and if their partner expresses empathy towards them. Husbands and wives are more content in their relationships when they feel that their partners understand their thoughts and feelings.

Successful married couples grow with each other; it simply isn’t wise to put any person in charge of your happiness. You must be happy with yourself before anyone else can be.  You are responsible for your actions, your attitudes and your happiness. Your spouse just enhances those things in your life. Prophet Muhammad (PBUH) said: “Treat your women well and be kind to them for they are your partners and committed helpers.”

COMMITMENT

Successful marriages involve both spouses’ commitment to the relationship. The married couple should learn the art of compromise and this usually takes years. The largest parts of compromise are openness to the other’s point of view and good communication when differences arise.

When two people are truly dedicated to making their marriage work, despite the unavoidable challenges and obstacles that come, they are much more likely to have a relationship that lasts. Husbands and wives who only focus on themselves and their own desires are not as likely to find joy and satisfaction in their relationships.

ACCEPTANCE

Another basic need in a relationship is each partner wants to feel valued and respected. When people feel that their spouses truly accept them for who they are, they are usually more secure and confident in their relationships. Often, there is conflict in marriage because partners cannot accept the individual preferences of their spouses and try to demand change from one another. When one person tries to force change from another, he or she is usually met with resistance.

However, change is much more likely to occur when spouses respect differences and accept each other unconditionally. Basic acceptance is vital to a happy marriage. Prophet Muhammad (PBUH) said: “It is the generous (in character) who is good to women, and it is the wicked who insults them.”
“Overlook (any human faults) with gracious forgiveness.” (Quran 15:85)

COMPASSION, MUTUAL LOVE AND RESPECT

Other important components of successful marriages are love, compassion and respect for each other. The fact is, as time passes and life becomes increasingly complicated, the marriage is often stressed and suffers as a result. A happy and successful marriage is based on equality. When one or the other dominates strongly, intimacy is replaced by fear of displeasing.

It is all too easy for spouses to lose touch with each other and neglect the love and romance that once came so easily. It is vital that husbands and wives continue to cultivate love and respect for each other throughout their lives. If they do, it is highly likely that their relationships will remain happy and satisfying. Move beyond the fantasy and unrealistic expectations and realize that marriage is about making a conscious choice to love and care for your spouse-even when you do not feel like it.

Seldom can one love someone for whom we have no respect. This also means that we have to learn to overlook and forgive the mistakes of one’s partner. In other words write the good about your partner in stone and the bad in dust, so that when the wind comes it blows away the bad and only the good remains.

Paramount of all, marriage must be based on the teachings of the Noble Qur’an and the teachings and guidance of our Prophet Muhammad (PBUH). To grow spiritually in your marriage requires that you learn to be less selfish and more loving, even during times of conflict. A marriage needs love, support, tolerance, honesty, respect, humility, realistic expectations and a sense of humour to be successful.

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Chronic Joblessness: How to Help Curtail it

30th November 2020
Motswana woman

The past week or two has been a mixed grill of briefs in so far as the national employment picture is concerned. BDC just injected a further P64 million in Kromberg & Schubert, the automotive cable manufacturer and exporter, to help keep it afloat in the face of the COVID-19-engendered global economic apocalypse. The financial lifeline, which follows an earlier P36 million way back in 2017, hopefully guarantees the jobs of 2500, maybe for another year or two.

It was also reported that a bulb manufacturing company, which is two years old and is youth-led, is making waves in Selibe Phikwe. Called Bulb Word, it is the only bulb manufacturing operation in Botswana and employs 60 people. The figure is not insignificant in a town that had 5000 jobs offloaded in one fell swoop when BCL closed shop in 2016 under seemingly contrived circumstances, so that as I write, two or three buyers have submitted bids to acquire and exhume it from its stage-managed grave.

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