Due to adverse impacts of COVID-19 on the economy, Botswana finds herself in a tight corner, and is forced to revisit the initial budget allocations for the year 2020/21, and suspend some projects to free up funds and redirect money to more pressing issues such as massive spending on public institutions to reconfigure spaces for new normal health protocols.
This is in addition to hundreds of millions of pulas spent on fighting the pandemic itself, that is in terms of procurement of medical supplies and testing equipments, incurring costs on quarantine and isolation facilities in addition to logistical expenditures from contact tracing and curbing the spread of the virus.
On Monday, the Minister of Finance and Economic Development, Dr Thapelo Matsheka told parliament that government prioritization exercise has released over P910 million from deferring and suspending some expenditures planned for this financial year.
Dr Matsheka explained that aside reduced spending from little to zero international travels, cancelled physical meetings and conferences government has put some projects on hold to give way for high priority development projects.
Minister Matsheka shared that much of the freed funds across government budgeting system would be consumed by COVID -19 related projects such as building ablutions, installing health protocol apparatuses for the new normal.
Matsheka further revealed that Government has taken a decision to accelerate national projects under Public Investment Programme contained in the Mid-Term Review of National Development Plan 11.
The Minister noted that the projects have also been amplified by the Economic Recovery and Transformation Plan (ERTP), which is intended to catapult Botswana out of economic downturn caused by COVID-19 pandemic.
When putting Mid-Term Review before Members of Parliament on Monday Minister Matsheka explained that the Public Investment Programme will move swiftly to implement massive development projects with significant economic stimuli, major infrastructure projects in rail and road construction as well as agriculture.
The Minister added that a number of projects associated with the digital transition have been included along with those focused on energy independence and energy exports.
The novel corona virus whose origins are traced to China in the city of Wuhan in December 2019 has restricted international travel for the larger part of 2020 first half, muting global trade and eroding business sentiments across world economies.
Growth projections by World Bank and International Monetary Fund (IMF) for Global Economy stood at -3 % from initial growth rate of 3 %.
In Botswana authorities projected that the economy would shrink by 13 % against the initial projected growth of 4 % for the 2020/21 financial year. Government however later revised growth rate to a contraction of 8 %.
Minister of Finance & Economic Development, Dr Thapelo Matsheka revealed in April that against initial projected revenue of P62.4 billion, Botswana‘s economy would only generate a projected revenue of about P48 billion.
Government then moved to trim its 2020/21 budget from P67.6 billion to P59.6 billion. Budget deficit would now shoot up from initial P5.2 billion, 2.4 % GDP to over P10 billion which would be over 5 % of GDP, well over government threshold of 4%.
The Minister announced then that Government would therefore do away with some planned expenditures and projects. He revealed that conferences and meetings would be cancelled, especially international travels by government, state funded institutions and parastatals.
Funding to parastatals and quansi-governmental institutions would be significantly reduced. “No luxury of attending international conferences but rather we are going to be a destination of conferences as a country,” he said in April.
The decline in government revenue will be attributable to a massive reduction in Mining & Mineral revenue which is anticipated to shrink by over 33 %. The drop in mining and mineral revenue is predominately as a result of halt in rough diamond sales due to travel restriction and stand still in trading across the industry.
The diamond industry is Botswana‘s key foreign income earner and largest contributor to GDP. It was projected that diamond revenue will bring to the table a total of P20 billion ,Dr Matsheka revealed that Government experts revenue from mineral revenue to only be around P6 billion.
Botswana’s diamond business partner De Beers Group last week released their half year results, figures are showing significant declines in earnings, as well as reduced production owing to depressed demand across global markets.
Chinaâ€™s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.
The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The countryâ€™s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.
In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.
Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.
China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.
Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.
On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.
According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the companyâ€™s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. Â The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.