Member of Parliament for Kanye North, Thapelo Letsholo has issued a warning to government against raiding the country’s fiscal buffer and funds, the Government Investment Account (GIA), which is now depleted following a series drawings over the years.
Responding to Ministry of Finance Committee of Supply Budget presentation in Parliament this week, Letsholo prefaced his contribution by giving the ministry a pat on the back for the few positives before punching holes on a number of key fiscal areas.
Letsholo commended the Ministry of Finance and Economic Development on the reform initiatives including, Zero Based Budgeting, conversion from cash to accrual accounting, inclusion of PPP’s as a procurement tool in the new Procurement Act, replacement / upgrading of GABS system, and amongst others.
“Re lapile ke ‘system e down’. I nonetheless cannot help but express that these positive developments and initiatives have been too slow to come to light. We need faster reforms,” he said.
The Kanye North lawmaker expressed concerns over government’s utilization of its fiscal buffer funds. “The issue of building back the Government Investment Account (GIA) is one of the most important, if not simply the most important challenge for the Ministry of Finance and Economic Development today,” he said.
Letsholo highlighted that six years ago, the GIA was reported at about 35% of GDP. “Now it is reported at less than 5%. As a consequence, our credit rating will continue to face downward pressure, borrowings will be more expensive and our buffers against former shocks will be weakened,” he said.
Prior to the global financial crises of 2008/9 the Government Investment Account sat P30.5 billion (41 % of GDP) in December of 2008.
It started depleting due to constant draw down financing budget deficits that featured year in year out during the National Development Plan 11. In December 2019 it stood at P18 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
The account took a hit in 2020 declining from P17.8 billion in December 2019 to P5.6 billion in November 2020, a decline of P12.2 billion, as government continued to draw down to finance the fight against COVID – 19 amongst others. However, Letsholo is not satisfied with pinning the GIA deterioration on COVID-19.
“These funds were depleted before COVID-19, so we cannot use Covid-19 as an excuse for depletion. Absolutely not. We cannot be the generation that “bankrupted the country,” he said. The outspoken BDP backbencher went on to quash Minister Serame’s plan to rebuild the Government Investment Account as “not good enough”.
“The Minister says that the target is to build it back up to about 15%. The big question is how….? By increasing tax collections and raising prices on Government Services? I think that this is not good enough,” he said.
Letsholo challenged Minister Serame to be deliberate and intentional. “At the least, I was expecting the Minister to outline how this will be done and where the funds will come from, for example, x percent of new revenue from VAT will go to replenishment of GIA”.
Letsholo said Ministry of Finance and Economic Development needs to address — in a comprehensive, meaningful and confident manner — the question of building back our savings, the GIA, in a sustainable manner back to 30% and putting in place fiscal “Golden Rules” to ensure that we do not deplete these reserves ever again.
In addition, the outspoken legislator urged on Government to attach targets to its policy reforms and economic ambitions.
“It would be appreciated to see some targets, milestones or at the very least expectations, of these new policies. Without these, it is very hard to know if the new changes or policies are working. For instance, how much additional tax do we hope to collect through the VAT machine? How much more budget efficiencies do we hope to gain through Zero Based Budgeting? What are the procurement gains that we expect to make through decentralized procurement? Without these targets we have no way of evaluating the effectiveness of our policies and hence our policy making cannot improve,” he said.
He advised Ministry of Finance to start developing longer-term, at least five years objectives or themes for the budget.
“For example, if unemployment, National Savings and Education Reform are key priorities, then they should have recurring prominence and updates in the Plan. Currently it appears each budget is done with reference ONLY to current issues and without reference to past issues. We need a more consistent focus and priority to long term issues,” he said.
Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.
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Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.
The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.
Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.
“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.
He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.
Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.
“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.
He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.
He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc
“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran
Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.
“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.
Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that the BIE provides a fertile environment where they can meet, share ideas and grow professionally.
“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.
He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.
“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams
He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .
Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.
“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.