In the next financial year, the Government is confronted with a ballooned wage bill that continues to exert far-reaching implications on the country’s fiscus.
A budget strategy paper forecasting the composition of the country’s treasury for the 2022/2023 financial year has revealed a bigger projected budget deficit emanating mainly from a rise in government salaries expenditure levels.
Experts at the Ministry of Finance & Economic Development anticipates the wage bill to rise by over P700 million next year. Specifically, the 2022/2023 figure for personal emoluments has been revised upwards by P731.56 million, to reach P27.98 billion, compared to the February 2021 estimate of P27.25 billion.
In February, the medium-term fiscal projections and the 2021 Budget Speech indicated that Total Revenue and Grants were anticipated to reach P66.25 billion in 2022/2023, 2.6 percent higher than the 2021/22 budget figure of P64.56 billion.
However, since COVID-19 has been persisting for longer than anticipated and continues to weigh heavily on domestic and global economic performance, Total Revenue and Grants for 2022/2023 have been revised downwards by P3.19 billion and are now estimated to reach P63.06 billion.
This downward revision partly reflects a reassessment of prospects for the mining sector, given continued uncertainty over market prospects in the diamond industry.
As a result, mineral revenues are projected to be P24.08 billion, a downward revision of P1.66 billion from the initial estimate of P25.74 billion.
Customs and excise revenue are forecast at P8.98 billion, slightly lower than the initial forecast of P9.10 billion, primarily due to changed exchange rate assumptions.
The low level of revenue from SACU primarily reflects the adjustment (repayment) of P7.0 billion in 2022/23 because the agreed distribution in 2020/21 turned out to be too high, given the impact of COVID-19 and the slowdown in regional trade on actual SACU receipts in that year.
Furthermore, the continued economic and political uncertainty in South Africa, and slow economic growth, may exert downward pressure on the allocation to Botswana from the SACU revenue pool.
Projections of revenue from VAT and Non-mineral income tax have also been revised downwards, despite measures introduced by Government to increase tax collection.
The downward revision of both income tax and VAT reflects updated data on economic growth and fiscal revenues.
VAT and Non-Mineral Income Tax are forecast to reach P11.78 billion and P14.94 billion respectively in 2022/2023, representing downward revisions by P693.60 million and P647 million from the initial estimates of P12.47 billion and P15.58 billion.
Expenditure commitments by Government are projected to increase again in 2022/2023, despite the commitment to contain recurrent expenses, particularly personal emoluments and pensions, through managing the wage bill.
Ministry of Finance & Economic Development says the anticipated rise in the wage bill primarily reflects a higher base effect from the actual budget figure for 2020/2021, the impact of the substantial upward adjustments in Government wages and salaries in 2019/2020 and 2020/2021, and the “creep” from annual increments related to salary scales.
The revision of personal emoluments is anticipated to increase Total Expenditure and net Lending to P71.55 billion, compared to the initial estimate of P71.07 billion.
Overall, the deficit is expected to increase in 2022/2023, after an expected decline between 2020/2021 and 2021/2022.
Notwithstanding this increase, the trend is expected to be reversed in the next two years and the beginning of NDP 12. The 2022/2023 fiscal deficit is anticipated to reach P8.50 billion (4.0 percent of GDP), compared to P7.22 billion (3.7 percent of GDP) in 2021/2022.
The main reason for the reversal is the sharp drop in SACU revenues, which was expected due to the overpayment in 2020/2021; however, this drop is anticipated to be a once-off.
Nevertheless, the increased deficit in 2022/2023 adds to the need for debt financing in the coming financial year. A longer-term objective is to rebuild the GIA held at the Bank of Botswana, whether through borrowing or returning to budget surpluses.
Meanwhile, the Government Investment Account (GIA) opening balance stood at P4.9 billion at the beginning of the 2021/2022 financial year.
It is projected to decline slightly to P4.6 billion by the end of the 2021/2022 financial year and remain similar through the 2022/2023 financial year.
To address the challenge of revenue collection and hence, boost domestic revenue, several strategies are being developed, including broadening the tax base by considering taxation of the digital economy; introducing electronic billing/invoicing platforms to improve VAT tax compliance.
Furthermore, Government plans to introduce a business intelligence and data analytics function to gain a deeper understanding of the behavioural patterns of taxpayers to apply targeted interventions; strengthening the tax audit function and focusing on sector-specific audits based on risk management and introducing the track and trace system to combat smuggling of excisable goods.
In August, Minister of Presidential Affairs, Governance and Public Administration Kabo Morwaeng told Parliament that Botswana’s Public service is way too big, too expensive to maintain and not sustainable.
Minister Morwaeng revealed that the Government spends over P2.3 billion on public servant salaries monthly, which he referred to is not sustainable.
The total number of people employed in the public service stands at 143 050 with 125, 203 employed by the Central Government and 17 847 employed under local authorities and councils.
Parliament was told that in the month of July alone Government spent a total of P2.36 billion on public servants salaries, with P2.17 billion settling wages of those in the Central Government and P193 million local government employees.
“This wage bill is too big; we are spending much money on public servants salaries. It is not sustainable,” Minister Morwaeng said.
The Minister, who is in charge of the civil service as the political head reporting directly to the President, revealed that Government is currently restructuring the public service and government machinery to align it to President Masisi’s reset agenda to enhance efficient, professional service delivery.
“We are also encouraging our public servants to go for early retirement so that they can explore other avenues while still fit do; as Batswana, we should understand that there are many other ways we could serve our country. It’s not all about working for the Government,” he said.
For many years Bretton Woods institutions criticised the size of Botswana Public Service, advising the Government to shrink and give way for the private sector to grow.
The Government implemented sizeable public wage increases agreed in 2019. The IMF advised Botswana against rising wage bill in its latest assessment of the country’s fiscus last year
“Fiscal reforms are needed to lock-in consolidation efforts. They include civil service reform, acceleration of plans to rationalise the parastatal sector and improve its governance, and strengthening the fiscal framework to anchor fiscal policy better and increase credibility,” advised the IMF.
Public Servants should brace themselves for some changes as the government is in an overdrive mode to overhaul the public sector. The government has also set the tone for the looming changes as it has added the public sector to its looming list of major and sweeping reforms.
This is contained in a savingram from the Permanent Secretary to the President (PSP) Emmah Peloetletse’s office showing how the government intends to “take stock” of all reforms in the public sector through the establishment of an inventory. Peloetletse’s savingram addressed to various ministries and the Directorate of Public Service Management (DPSM) reveals that the government is working around the clock to implement some changes in the Public Service.
The savingram reminded Permanent Secretaries of various ministries and DPSM that the public sector reforms unit (PSRU) at the Office of the President is mandated with Coordinating Reforms across the Public Service. “This essentially entails providing the strategic guidance and facilitation in the implementation of reforms across the Public Service. In this endeavour the Unit has in the past with Technical Assistance from European Union developed a template for documenting Reforms in the Public Service and documented ten (10) major reforms across the Public Service,” reads the savingram in part. It added that “The Unit has lately rolled out the Change Management Framework in an effort to facilitate effective and efficient management of change in the Public Service.”
According to the savingram, it has been noted that for a variety of reasons the use of the template for documenting reforms has not been universally used across the Botswana Public Service. It further states that to facilitate the documentation of the reforms it is essential that an inventory of the various reforms across the Public Service (Central Government, Local Government and State Owned Entities) is established.
“By this correspondent we are seeking your assistance in populating the attached template to provide basic information on the various reforms. The PSRU will, through the various Coordination of focal Persons facilitate the full documentation of the reforms once the inventory is established,” the savingram further stated. The copy of the template among others calls on the focal persons to fill out them form under several headings; they include title of reform, start date, reform objectives, reform components, reform components, progress status.
The savingram echoes President Mokgweetsi Masisi’s announcement last year during his state of the nation address that as a nation Botswana has set itself a lofty goal of becoming a high income country by 2036 and has come up with a list of reforms among them digitisation of government infrastructure. He said the path to achieving this goal dictates that, Botswana takes deliberate steps that will transform its institutions; the way Batswana think and the way they act.
“It is with this in mind, that I presented a Reset Agenda in May 2021, with the following priorities: Save Botswana‘s population from COVID-19, by implementing a series of life saving measures that include a successful and timely vaccination programme, Adherence to COVID-19 health protocols remains key and align Botswana Government’s machinery to the Presidential Agenda, to ensure that the national transformation agenda will be embodied in the public service of the day,” said Masisi. He added that, “this will come with significant Government reforms in all public institutions. We need greater agility and responsiveness like never before in the delivery of public services.”
The Presidential COVID-19 Task Force reportedly meddled in the awarding of tenders for COVID-19, a new Public Accounts Committee (PAC) report has revealed.
The Committee expressed concern that it has noted that there are two centres for covid procurement being the Ministry of Health and the Covid Task team in the Office of the President. The report says the Committee questioned the Accounting Officer on why the COVID 19 task team is usurping the powers of the Ministry of Health by engaging in covid procurement when the Ministry of Health is the one which has the experience and mandate of dealing with the pandemic. The report says clarification was also sought on why direct appointment is the preferred method for covid procurement.
“In her response the Accounting Officer stated that the task team was mainly engaged in the procuring of quarantine facilities and was assisting the Ministry of Health due to the heavy workload brought about by the COVID 19 pandemic,” the report says. The report says the Accounting Officer further stated that direct procurement was used because COVID 19 was treated as an emergency and that procurement was mainly from companies that have been traditionally used by the Ministry of Health.
“This however, is not the case as there has been report of new companies being awarded COVID -19 contracts. The use of direct procurement method should only be used in exceptional cases as it’s a non-competitive method which increases the risk of inflated pricing and close relations with particular suppliers to the detriment of others,” the report says.
It says since most covid procurement fell under emergency, there is need for openness and transparency regarding the procurement. The PAC recommended that in order to ensure transparency and accountability all COVID 19 related procurement should be periodically published in the PPADB website giving full details of the companies receiving procurement contracts and the beneficial owners of the companies.
It says with the passage of time the impact of covid is no longer unexpected so direct awards should gradually be abandoned as the medium and long-term needs of the pandemic can now be predicted. “Judgement should be used even during direct awards to ensure that prices are not higher than the market prices,” the report says.
In a related matter, the report says the Central Medical Stores (CMS) was unable to cater for the required quantities of medical supplies with order fulfilments of about 35% resulting in shortages and insufficient drugs to Athlone Hospital and the surrounding clinics. “In his submission the Accounting Officer had indicated that CMS was unable to supply the exact quantities required by the hospital and surrounding clinics due to the fact that supplies from CMS have to be rationed in order to cover other facilities around the country,” says the report.
The committee expressed concern about the inadequate supply of drugs to government facilities which puts the lives of patients at risk due to non- availability of essential supplies. It recommended that the Ministry identifies and prioritise measures that need to be taken to ensure that there is adequate supply of essential medicines which are needed in the public health system.
Meanwhile the report says the Ministry of Health and Wellness coordinates the operations and functions of some institutions which receive government subventions and secondment of staff from the government. These institutions include 10 NGO’s, two mission Hospitals, three mission clinics and two schools of Nursing.
It says in its endeavour to enhance efficiency and effectiveness of government support to NGOs the Ministry of Finance and Economic Development developed some Policy Guidelines for Financial Support to Non- Governmental Organisations. According to the PAC report, the guidelines were meant to ensure that there is consistency, accountability and transparency in administering public funding to NGOs. However, the Ministry of Health did not comply with the very important guidelines.
“The main areas of non-compliance were the following: (i) There was no Evaluation Committee to vet proposals from NGOs, in some instances NGOs had formed part of the evaluation forum when their requests were being considered,” the report says. It says there was continued funding of NGOs even when they failed to submit narrative and financial progress reports; and (iv) Continued funding of NGOs that failed to submit audited financial statements and management letters as required. The Committee expressed concern at the lapses in the administration of grants by the Ministry despite the large sums of public money awarded to these NGOs.
The Kasane Regional Magistrate Court refused this week to rule on whether three Namibians and their Zambian cousin shot dead by members of the Botswana Defence Force (BDF) were in possession of a rifle or not prior to their deaths.
Ruling in favour of the BDF members, Regional Magistrate Taboka Mopipi who presided over the inquest said, “It is acknowledged that no rifle has been produced before court to confirm that indeed the deceased were armed and or that there was indeed a gun shot.” She said the evidence before the court is that search for the rifle(s) that allegedly triggered the gunfire exchange was done by both Namibia and Botswana SCUBA divers and nothing was found. She said when the said search was done, an area of search was demarcated around the scene area which was partly searched due to water animals such as hippos that launched an attack at the area during the search.
“The search was therefore never concluded. This therefore leaves a gap. To that end, the area not extensively searched, the court cannot make a finding whether the rifle in issue was there or not. This is a very crucial piece of evidence,” added Mopipi. She said the joint search did not conclude the exercise and I cannot properly make a finding of fact adding that that the rifle was there as the BDF allege can therefore not be ruled out.
The deceased are Martin Munilweye Nchindo, Ernest Nchindo, Tommy Sinvula Nchindo and Sivula Munyeme. The four deceased persons died on the night of the 5th November 2020, in the waters of the Chobe River (Southern Channel) near Sedudu/Kasikili Island in Botswana. Mopipi said the incident took place at night, in a gloomy atmosphere and that as at the time, movement in that particular area was restricted and or not permitted.
She said it was the evidence of some of the witnesses that the injuries as observed on the four deceased reflected that they were brutally assaulted and or beaten either before or after being shot. “Their evidence gained support from Witness 34, Dr. Bithoma Thotho Amis who observed post mortem on behalf of the families of the deceased and Government of Namibia. This witness however conceded during cross-examination that the injuries as observed have been caused by other contacts and or impacts such as falling and hitting the hard surface of a wooden canoe,” said Mopipi.
She emphasized that inquest proceedings have very serious consequences and therefore, whatever evidence brought before court must be produced by persons of right qualifications particularly the post mortem report which the court has to rely upon. “The qualification of the expert is crucial in determining the credibility of the report. Upon assessment of both experts, I am inclined to adopt the reports from Witness 18, who is a qualified pathologist. A closer look at the other report indicates that the author, Witness 34 is not a qualified pathologist and it is meddled by issues outside an expert opinion,” she said.
Mopipi said reports compiled by a consultant Forensic Pathologist Dr. Kaone Panzirah-Mabaka show the causes of death as follows; Sivula Munyeme, gunshot injury to the chest and extremities, Martin Nchindo, gunshot wound to the abdomen and pelvis, Ernest Nchindo, multiple gunshot injuries to the chest and extremities and Tommy Nchindo, gunshot wound to the chest and abdomen.
“Medical evidence therefore prove conclusively that the four deceased persons died due to gunshots injuries. It is undisputed that the injuries were inflicted by seven (7) members of the Botswana Defence Force; Lieutenant Moreri Kenneth Mphela, Sergeant Ndingisano Nfazo, Sergeant Puisano Pistor Kgokong, Private Mbikiso Tafila, Private Emmanuel Moganetsi Majuta, Private Barulaganyi Rannosang and Private Oromilwe Motlhabi,” said Mopipi.
Mopipi found that there was a gunshot from the direction of the men to the direction of the BDF section. “The BDF members retaliated and returned fire. This was done in accordance with Standard Operation Procedures (SOPs) within the BDF. According to the SOPs, in case a soldier is being fired at, they fire back and do not have to wait for a command,” she said. She added that “The gunfire exchange was brief and after it ceased, they used a torch to light where the men were and established that all the four men were motionless, two in one canoe, one in the other and the other man lying on the edge of the river on the Island.”
She said, “The evidence of the witnesses is that, when they followed the intel, the intent was to conduct an investigation. There was clearly no intent on their part to shoot the deceased, they did that as an act of retaliation.”