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.
The much-anticipated opposition unity talks that will see Umbrella for Democratic Change (UDC) engage Botswana Patriotic Front (BPF), and Alliance for Progressives (AP) are expected to kick off any time from now.
According to informants, the talks, which were preceded by-elections negotiations, aim to be as inclusive as possible. As the talks start, the UDC, composed of Botswana National Front (BNF), Botswana Congress Party (BCP) and Botswana People’s Party (BPP), insist on retaining its preferred model of Umbrella; on the other hand, the BPF is proposing a PACT; and AP is in favour of an alliance model.
BPF is reportedly sceptical on the umbrella model and wants cooperation with the flexibility to allow other parties to join hands with UDC but without necessarily contesting elections using UDC symbols and colours.
BPF, which is currently the fastest-growing party, seems to be focused on self-actualization, self-preservation and securing institutional capacity in case of any political calamity. Although often profitable, cooperation politics can often leave individual political parties battered by political events and weakened beyond meaningful survival.
Discussions with some BPF members suggest that the party has big ambitions and harbour serious intentions of taking the BDP by its horns-all by itself-one day. “The position by some of our leaders is that the future of the UDC remains uncertain. The position and advice are that we should not put all our eggs in one basket. And the party elders think the pact model of cooperation is the safest under prevailing circumstances. Some, however, are worried that we should not overestimate our worth despite being the fastest-growing party in the country.
However, the matter is yet to be concluded once we receive the official invite,” revealed a BPF member of the NEC. Asked about the specifics of the pact idea, another high ranking party official revealed that the party Patron, Lt Gen Ian Khama and his brother Tshekedi Khama are among those who are for the election pact model.
BPF Spokesperson Lawrence Ookeditse has earlier this year told this publication that: “We have not settled on a model yet.” He also added that as a party, they are ready and willing to work with UDC, “but we will have our thoughts on how the cooperation or the talks should transpire, and they too will tell us their preference, and we will sit on the table to see how best to work together”.
AP heads into these negotiations with proposals of its own. On the model part, AP has expressed flexibility but want its partners to consider other models. AP believes that beyond the umbrella model, the coalition could also have a matrix to ensure that opposition parties select the best candidates for parliamentary and council seats.
AP, a splinter party of the beleaguered Botswana Movement for Democracy (BMD), asks for the constituencies allocated to BMD in the previous talks before it was kicked out on the eve of the 2019 elections.
AP, which garnered a popular vote of under 40 000 in the 2019 general elections, is confident that it brings tremendous value to the UDC, and state power could be within reach in 2024. To reconcile the various interest of political parties, the leaders have agreed to engage political experts in a bid to arrive at the best decisions.
“There will be no conveners because parties in the past believed that they (conveners) took decisions on behalf of the constituent parties, though they are not representing any. So, the idea is to rope in political experts to direct UDC and the negotiating parties as to which path of cooperation model to follow,” a highly placed informant said this week.
UDC convener Lebang Mpotokwane has also defended the umbrella model in the past, noting that it creates fewer problems for the participants. The negotiations will be the fourth opposition cooperation talks since the 2009 elections. The opposition has held talks in 2011, 2012 and 2017. The 2012 talks resulted in Umbrella for Democratic Change (UDC), which has been anchoring negotiations since then.
When the Chairperson of the International Labour Organization (ILO) Governing Body invited member states to submit candidates for the vacant Director-General post for consideration, Botswana developed a keen interest.
It swiftly mobilized to beat the deadline, but the unions, upon consultation, nominated Justice Key Dingake as their preferred candidate, much to the government’s disappointment, who then decided to dump the whole issue altogether.
In accordance with the Rules governing the appointment of the Director-General and the decisions made by the Governing Body at its 341st and 342nd Sessions, the Chairperson of the Governing Body calls for candidates for appointment to the office of Director-General of the ILO through communication to all Governing Body members and all ILO Member States and candidatures must be submitted by a Member State of the ILO or by a regular or deputy member of the Governing Body.
The deadline for submission was on Friday, 1 October 2021, and candidatures were to be sent by postal or electronic mail to the following address to the Chairperson of the Governing Body. This publication had established that when Cabinet sat to discuss the issue, it was resolved that the unions as key stakeholders should be consulted and requested to submit a name for consideration. They did and offered Justice Oagile Key Dingake-a distinguished scholar and labour law expert whose contribution to the country’s labour fraternity is unparalleled.
When asked this week to share their side of the story, the unions said they were first invited to partake in the process by the government but never got a response after they nominated judge Dingake as an ideal candidate.
“We sent our correspondence to the Minister of Employment, Labour and productivity, Mpho Balopi, with our suggested name being Justice Oagile Key Dingake, but since then we never got a response,” said unionist, Tobokani Rari who further expressed disappointment at how the government has handled the matter.
Rari said that while he would not want to impute any improper motives to anyone, the developments rekindled memories of the government’s hostility towards Judge Dingake, who has been forced by circumstances to take his skills and wealth of experience to the benefit of other countries. Balopi did not respond to questions sent to him and did not pick this publication’s calls at the time of going to press.
Cabinet insiders say Dingake’s name spoilt the party and dampened the spirits. “In the list of nominated names, he was the leading candidate, but I guess the powers that be could not imagine themselves campaigning for him and doing all they did for the Executive Secretary of SADC Secretariat, Elias Magosi.”
Dingake’s sin, observers say, has always been his progressive, independent mind and family’s political background, all of which have always stood in his way to progress to the country’s judicial ladder’s ends.
It is understood that also in the mix and preferred by the state was former Attorney General, judge, and now Ambassador and Permanent Representative of Botswana to the United Nations and other international organizations, Dr Athaliah Molokomme, who also has a background in human rights advocacy.
But insiders say many believed that the country should export Dingake to represent the country given his decorated experience and background. As a lawyer, Dingake represented 90% of Trade Unions in Botswana, drafted numerous Collective Labour Agreements, later presided overall trade disputes, including Collective Labour Agreements, and made determinations as Judge of the Industrial Court of Botswana.
Dingake has also written and lectured widely on trade, labour and human rights and holds numerous citations and awards for his work regarding peace, human rights, and social development. Had he contested and won, he would have been the first African to lead the ILO.
The ILO is built on the constitutional principle that universal and lasting peace can be established only if based on social justice. The ILO has been the source of such hallmarks of industrial society as the 8-hour day, maternity protection, child labour laws and a whole range of policies promoting workplace safety and peaceful industrial relations. Unique among UN organizations, the ILO has a tripartite structure involving governments, employers and workers.
ILO Director-General elections events lineup…
At its 341st (March 2021) and 342nd (June 2021) Sessions, the ILO Governing Body approved the following timetable for the appointment of the Director-General because the current term of office of the Director-General will come to an end on 30 September 2022:
1 July 2021: The Chairperson of the Governing Body calls for candidatures 1 October 2021: Last date for the reception of candidatures A week in January 2022: The Chairperson of the Governing Body conducts interviews with candidates for the position of Director-General based on the format and principles contained in document GB.342/INS/6 and the guidance provided by the Governing Body at its 342nd Session 14-15 March 2022 (344th Session of the Governing Body): The Governing Body conducts candidate(s) hearings 25 March 2022 (344th Session of the Governing Body): The Governing Body conducts the ballot for the election of the Director-General 1 October 2022: The term of office of the Director-General commences.
Botswana and the European Union (EU) appear to have been at each other’s throats behind the scenes since last year, with the EU saying it held several meetings with Botswana to convince her to address human rights issues.
This is contained in a 2020 Human Rights Report that reveals broad divisions in contentious issues boiling behind the scenes between Gaborone and the Union. According to the report, which was released recently, the EU says it “continues to follow closely three main human rights issues in Botswana: the application of the death penalty; the rights of LGBTI persons; and gender equality.”
“Botswana remains part of a small group of countries – in Africa and globally – which continue to retain the death penalty both in law and in practice. Three executions were recorded in 2020,” the report says. According to the report, the Botswana Government indicated that a public debate on the application of the death penalty should be part of its ongoing work towards developing a Comprehensive Human Rights Strategy and the related National Action Plan.
The report says further progress on the rights of LGBTI persons’ seen in 2019, when Botswana’s High Court decriminalised same-sex consensual relations, is still pending, subject to a final court decision over a government appeal.
“Finally, gender-based violence and the need to advance gender equality and women’s rights in society remain another challenge for the country. In response to the high incidence of gender-based violence – which has intensified in many countries during the current COVID-19 pandemic – the President and the First Lady launched a public campaign to fight gender-based violence and to promote equality,” the report says.
The report says the EU did not fold its arms and watch from the sidelines the human rights issues in question are concerned but confronted Botswana to have the contentious issue addressed. “The EU continued to engage with the Botswana Government, multilateral organisations, non-governmental organisations and the broader society in Botswana in three main areas: the death penalty, gender-based violence and empowerment of women, and rights of LGBTI persons, as well as on the support of media and implementation of Universal Periodic Review recommendations,” the report says.
The report says that in addition to ad hoc consultations and human rights-oriented outreach efforts, the EU engaged with the Botswana Government on human rights formally in the context of the Article 8 Political Dialogue, which took place in February 2020.
“The dialogue offered an opportunity to exchange views on EU’s and Botswana’s experiences concerning the three EU priority areas in Botswana (capital punishment, gender-based violence and rights of LGBTI persons) as well as other human rights challenges, while also exploring opportunities for EU-Botswana cooperation on human rights issues in the context of the EU-Africa partnership and at the multilateral level,” the report says.
In parallel to engagement with the government, the EU said it continued to maintain dialogue with representatives of civil society focusing on human rights and with UN organisations and other partners of the country.
“The EU continues to be the driving force behind the Gender Dialogue (in principle co-chaired with UN Women and the Gender Affairs Department in the Ministry of Immigration, Nationality and Gender), which brings together various stakeholders to discuss gender issues to chart a way forward regarding partnerships. The EU has also used public diplomacy efforts to stimulate broader dialogue in the country on human rights issues,” the report says.
The EU said it continued to provide financial support to projects funded through the European Instrument for Democracy and Human Rights, with activities focused primarily on helping Botswana tackle gender-based violence, strengthen the notion of gender equality in the country, and promote participation in political processes.
“With six projects already underway, the EU signed two new programmes, in the wake of the COVID-19 pandemic, to support victims of gender-based and domestic violence and defend the rights of marginalised people, with a combined budget of EUR 430,000,” the report says. It says one of the projects is designed to offer care services to victims of gender-based violence and provide clinical services, counselling, shelter, and a referral system for legal and social assistance. Another project provides legal, medical and psychosocial support to refugees, undocumented migrants and indigenous people.
It says Botswana remains an important like-minded partner for the EU on the human rights agenda at a multilateral level. “The country’s positive role on human rights in the multilateral context would be further strengthened by initiating a domestic process of reflection about the signature and ratification of several pending core human rights conventions and/or optional protocols (e.g. the Convention for the Protection of all Persons from Enforced Disappearances, the International Covenant on Economic, Social and Cultural Rights, the Convention on the Rights of Persons with Disabilities, the Optional Protocol of the Convention against Torture, etc.)” the report says.
But the report acknowledged that Botswana is a stable and well-established democracy with a legal framework and institutions designed to guarantee respect for human rights in society. It says human rights complaints are addressed by the courts, with the government accepting decisions and implementing relevant rulings.
“Although the media scene in the country is relatively undeveloped, the World Press Freedom Index has noted a further positive trend concerning the role of the media in society (as was also the case in 2019) and has improved Botswana’s ranking from 44th to 39th place (out of 180 countries),” the report says. Meanwhile, this week, President Dr Mokgweetsi Masisi met with the EU delegation led by the managing director for Africa of the European External Action Services, Ms Rita Laranjinha.