Date: 05/02/2007
Source: Botswana government
Title: Budget speech

Delivered to the National Assembly on 5th February 2007
By Honourable Baledzi Gaolathe
Minister of Finance and Development Planning

I. INTRODUCTION
1. Mr. Speaker, I have the honour this afternoon to present to this Honourable House
budget proposals for the financial year 2007/2008.
2. Mr. Speaker, we face many challenges in our efforts to improve the lives of all
Batswana. A central challenge is to be internationally competitive so that the goods
and services we produce have a wider market and yield high incomes for Batswana.
This means we must strive to increase productivity and service delivery to meet
international standards in all sectors of the economy, not just those directly exposed to
international competition. Some of the sectors in which we are already globally
competitive are also risky, notably diamond mining, where the world market can and
does change significantly from year to year. In the face of this risk, we seek to
diversify by expanding less risky, but nevertheless highly productive activities.
Together, these challenges point to the theme for this year’s Budget Speech: Improved
Productivity – The Key to Sustainable Economic Diversification and Global
Competitiveness. All stakeholders, including the private sector, labour, and nongovernmental
organisations must improve on their past performance and identify new
strategies for attainment of sustainable global competitiveness. To do this, we should
continue to invest in our local talents, whilst at the same time attracting global talents
and skills in those areas where there are shortages. In brief, to maintain a competitive
edge in the ever changing global economy we must be more productive, in other words,
producing more with less by utilising the same or less inputs more efficiently to
produce more outputs than before.
3. Mr. Speaker, much has been accomplished in the 40 years since Independence. As the
International Monetary Fund stated in its latest Article IV surveillance report,
Botswana has been among the world’s fastest growing economies over the past 40
years, with an impressive record of prudent macroeconomic policies and good
governance, which has moved the country from being one of the poorest in the world to
the upper-middle income range. At the time of Independence in 1966, in terms of
today’s prices, per capita income was about P3 000 compared to about P33 000 in
2005/06. Real GDP growth averaged 9 percent between 1965/66 and 2005/06. In
1965/66, Government expenditure was about P10 million, while in 2006/07 total
Government expenditure had grown to P22.4 billion. Financing of the Government
budget from foreign grants declined from 51 percent in 1965/66 to less than 2 percent
in 2006/07. Poverty rates have declined, from 46.6 percent in 1985/86 to 30.2 percent
in 2002/03, and the NDP 9 Mid-Term Review, under the Base Case scenario, projects a
further decline in poverty rates to 23 percent by the end of the Plan period.
4. Mr. Speaker, considerably more detail could be given about our development path from
the humble beginning in 1966. However, of paramount importance today is to set the
economy on a sustainable path for Botswana’s future prosperity, and thereby ensure
that the Vision 2016 objectives and the United Nations Millennium Development Goals
are achieved. To this end, as was mentioned in His Excellency’s State of the Nation
Address in November 2006, the Business and Economic Advisory Council submitted
its report to Government at the end of September 2006. The report highlights the need
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for more openness of the Botswana economy and increased international
competitiveness, as well as the critical need to attract and retain significant levels of
foreign direct investment by further improving the investment climate and adopting
more business friendly and supportive processes and procedures in the public sector.
The report also makes proposals for Government to examine the feasibility of
implementing and fast tracking some identified projects. Government is currently
working on a plan to facilitate implementation of the proposals made. I expect my
Ministerial colleagues to elaborate on such plans in their sectoral Committee of Supply
Statements.
II. INTERNATIONAL AND REGIONAL ECONOMIC REVIEW
5. Mr. Speaker, the global economic environment was positive during 2006, despite rising
oil prices. The latest International Monetary Fund (IMF) report, the World Economic
Outlook, forecast global real GDP growth of 5.1 percent in 2006, with a slight decline
to 4.9 percent in 2007. The IMF expected the global expansion, to be spearheaded by
growth in the Emerging and Developing Countries, at over 7 percent, especially
Developing Asia, which includes countries such as, China, Malaysia and India, at over
8 percent. Meanwhile, the IMF expected the Advanced Economies such as, the United
States, Western Europe and Japan to show a relatively lower growth rate of just over 3
percent in 2006, slowing down slightly to 2.7 percent in 2007. The inflation outlook
for Advanced Economies was 2.6 percent for 2006, and dropping slightly in 2007 to 2.3
percent. Emerging and Developing Countries were forecast to have had an average
inflation rate of 5.2 percent in 2006, and also declining slightly in 2007 to 5 percent.
More recently, the Organisation for Economic Co-operation and Development issued
semi-annual projections for its members, with a slightly less optimistic economic
outlook of the global economy than that of the IMF, due largely to the slowing down of
the US economy.
6. Mr. Speaker, in the IMF projection, the Africa region was expected to have grown by
5.4 percent during 2006, Sub-Saharan Africa by 5.2 percent, while the Southern
African Development Community (SADC) would record a growth of 4.8 percent. The
prospects for 2007 are even better, with the whole of Africa expected to grow at nearly
six percent, whilst Sub-Saharan Africa in general, and the SADC region, would expand
at over 6 percent. The average annual inflation for 2006 for Africa was expected to
have been 10 percent, while that for Sub-Saharan Africa (excluding Zimbabwe) was
nearly 7 percent.
III. DOMESTIC ECONOMIC REVIEW
7. Mr. Speaker, I shall now briefly outline some of the major economic developments in
the domestic economy.
Economic Growth
8. Mr. Speaker, according to the Central Statistics Office’s preliminary estimates of GDP
measured at current prices, the overall size of the economy increased by 15.2 percent
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from P49.6 billion in 2004/05 to P57.1 billion in 2005/06. The preliminary estimates of
GDP measured at constant prices for 2005/06 show little change from 2004/05, after
the very rapid real growth of 9.2 percent in 2004/05, revised from the preliminary real
growth rate of 8.3 percent for 2004/05 I reported last year. The preliminary 2005/06
data shows a 4.4 percent decline in the mining sector real GDP, and declines in the
non-mining sectors of agriculture, manufacturing, and construction, which all showed
reductions of a little over 3 percent from 2004/05 to 2005/06. The remaining nonmining
sectors grew at an average of 3.0 percent. Diamond mining, which is the largest
part of the mining sector, continues to experience uneven growth. In 2003/04 output in
terms of carats was 28.7 million carats, and then in 2004/05 had grown dramatically by
19.5 per cent to 34.3 million carats, only to fall back to 32.8 million carats in 2005/06.
This is the principal reason why, the real mining sector output declined in 2005/06.
9. Mr. Speaker, while the 2005/06 overall GDP performance was modest compared to the
previous year, the return to more rapid growth has already begun. We are on the
threshold of major new projects. The construction of the facility for Diamond Trading
Company (Botswana) is already visible along the road to Sir Seretse Khama
International Airport. Two weeks ago, His Excellency, the President officiated at the
groundbreaking for a major new refinery at the Tati Nickel Mine, which is a good sign
of processing our raw material to add value. The refinery is expected to cost about P4
billion, and employ 3500 people during construction and 500 on a permanent basis.
Last year, I mentioned the Mmamabula Export Power Station. Its transition from
concept to agreement has been fast tracked, with all agreements scheduled to be
concluded by April 2007, and implementation scheduled to start immediately
thereafter, at an estimated cost of P42 billion. Preparatory work for Morupule Power
Station expansion is ongoing, with construction expected to start in November, 2007 at
an estimated cost of up to P7 billion.
10. Mr. Speaker, many major Government projects are to start in the coming financial year,
following the resolution of land availability, environmental impact assessment and
design problems. These include construction of dams at Dikgatlhong, Thune, Mosetse
and Lotsane, that will cost about P2 billion; expansion of the University of Botswana at
a cost of P702 million; building of a Medical School at a cost of P573 million; and
Teaching Hospital at a cost of at least P500 million; construction of the Botswana
International University of Science and Technology costing P5.3 billion; and design
and construction of 5 senior secondary schools in Goodhope, Nata, Shakawe,
Mogoditshane and Mmadinare, which will cost at least P1.5 billion. Further,
Government will speed-up implementation of the rural electrification programme,
which will cover the electrification of additional 100 villages, at an estimated cost of
P544 million and the rural telecommunication programme which will cover 197
villages over three years at a cost of P265 million. Care will be taken to phase all
these construction activities to ensure cost-effective and timely completion.
11. While these are large investments being made by both the private sector and the public
sector, there are many smaller investments being made by the private sector, which
together reveal considerable confidence in the Botswana economy. This optimism is
reflected in the latest Business Expectations Survey carried out by the Bank of
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Botswana in September 2006, where 78 per cent of the respondents expressed optimism
about business conditions in twelve months’ time.
12. Mr. Speaker, I mentioned in last year’s Budget Speech the flexibility provided to line
Ministries and other implementing agencies in carrying out pre-contract activities
before the commencement of the financial year, and I will announce further
liberalisation in other procedures when discussing the Budget later. If implementation
by departments, like the Department of Building and Electrical Services (DBES) in the
Ministry of Works and Transport, the Boipelego Education Project Unit in the Ministry
of Education, and the Technical Services Unit in the Ministry of Local Government, are
strengthened, and all Accounting Officers and Heads of Department focus closely on
project implementation, there is no reason why all the projects in the Mid-Term Review
of NDP 9 cannot be implemented during the current Plan period. To accomplish this
we must also be prepared to augment local contracting capacity by employing highly
rated international construction companies, along with skilled and experienced
manpower to help implement such projects. In that way, we would be able to achieve
improved productivity, sustainable economic diversification and global
competitiveness by benchmarking citizens against institutions that produce quality
goods at the right time and cost. Failure to do this could result in stagnation, slow
implementation of projects and poor service delivery to our people.
Inflation
13. Mr. Speaker, Botswana’s monetary policy aims at attaining a sustainable, low and
predictable level of inflation that, amongst others, ensures improvement in global
competitiveness. The objectives of low inflation, maintenance of positive real interest
rates and global competitiveness are the means by which monetary policy contributes
to the broader national objective of achieving diversified and sustainable economic
growth. Inflation averaged 11.6 percent in 2006, compared to 8.6 percent in 2005. The
higher inflation in 2006 was due to the combination of higher world prices for
petroleum and the one-off transitory effect of the May 2005 introduction of the new
exchange rate regime. Inflation maintained a downward trend during 2006, with the
rate declining to 8.5 percent for the twelve months to December 2006.
Exchange Rates and the Balance of Payments
14. Mr. Speaker, since the introduction of the new exchange rate regime, the real effective
exchange rate of the Pula has remained stable, implying maintenance of overall
competitiveness in the global markets. However, some amount of variation has been
observed in the exchange rates between the currencies which make up the Pula basket
(the South African Rand, the US Dollar, the Euro, the Japanese Yen and the British
Pound). The basket arrangement moderates the Pula exchange rate volatility across
individual currencies. Thus, during 2006, while the Pula gradually depreciated against
the basket, it appreciated by 0.5 percent against the Rand.
15. Mr. Speaker, many non-traditional exports are growing rapidly. From 2003 to 2006,
non-diamond exports as a whole, measured in terms of US dollars, grew at an average
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compound rate of over 20 percent per annum. This success is based on the efforts of
entrepreneurs in a wide range of industries from producers of biscuits to chewing gum
to textiles who are taking advantage of the stable real effective exchange rate.
16. Mr. Speaker, the preliminary estimates of the balance of international payments on
current account show a surplus for 2006 of about P10 billion, which is a significant
improvement over 2005. Current account earnings, which include exports of goods
and services, were valued at P37.1 billion, which represents an increase of 9.6 percent
from 2005. On the other hand, the value of current account spending, including
imports of goods and services, increased by 3.2 percent to P27.1 billion in 2006. After
taking into account the capital and financial accounts, the overall balance of
international payments is expected to show a surplus of P9.3 billion in 2006, compared
to a surplus of P7.1 billion in 2005.
17. As at the end of November, 2006, the foreign exchange reserves amounted to P48.8
billion, an increase of P14.1 billion on a year earlier. In US dollar terms, the foreign
exchange reserves increased from $6.3 billion to $7.9 billion, over the same period.
These reserves would cover 30 months of import of goods and services as against 22
months at the same time last year. However, the major upcoming projects, some of
which I mentioned earlier, will reduce the import cover, given the high element of
imported inputs.
Credit Rating and Other Performance Indices
18. Mr. Speaker, Botswana’s sovereign credit rating remains high. The investment grade
ratings, with stable outlook, first assigned in 2001 by Moody’s Investors Service and
Standard and Poor’s, were reaffirmed in 2006. According to these agencies, the ratings
reflect the country’s “relative wealth, low debt and the Government’s ongoing
commitment to sustainable macroeconomic, financial and social policies”.
Notwithstanding the favourable economic circumstances, the rating agencies have
noted that Botswana’s rating is constrained by the “narrow economic base, with fiscal
dependence on the mining sector, which limits opportunities for gainful employment
and causes output to be more volatile… At the same time, Government’s budget”
continues to be stretched by “the heavy costs imposed by the HIV/AIDS” epidemic.
19. With regard to other performance indices, Botswana has continued to perform
relatively well. Transparency International ranked Botswana least corrupt in Africa
and 37th in the world, in their Corruption Perceptions Index. In the World Bank’s ease
of doing business report our rank in 2006 was 48 out of 175 countries, a drop of 4
places below the 2005 ranking, which was mainly due to changes in methodology and
an addition of 20 new countries. According to the World Economic Forum’s 2006
Global Competitiveness report, out of 125 countries Botswana ranked 81st, against
72nd in 2005, which makes us the third best performer in Sub-Saharan Africa after
South Africa and Mauritius. The drop in the rankings on global competitiveness, and
ease of doing business, means that we must redouble our efforts to improve our
international competitiveness, hence the theme Improved Productivity – The Key to
Global Competitiveness.
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Employment
20. Mr. Speaker, preliminary results of the 2005/2006 Labour Force Survey indicate that
from 1995/96 to 2005/06, the total labour force grew by 48 percent to 651 465, while
total employment went up by 59 percent, to 548 594. This translates to 203 189 jobs
created during the period, representing an annual average employment growth rate of
4.7 percent. During the 10-year period, since employment grew faster than the labour
force, the unemployment rate dropped from 21.5 percent to 17.6 percent. While these
statistics show that there has been some improvement with regard to employment,
unemployment remains one of the big challenges. Government will continue to
implement policies and projects designed to increase productive employment. The
major projects I mentioned earlier, as well as initiatives such as agricultural support
schemes, including Arable Land Development Programme and empowerment schemes,
such as the Citizen Entrepreneurship Development Agency (CEDA) Young Farmers
Fund, will create new employment opportunities, and contribute to achieving the
United Nations Millenium Development Goals of Eradicating Poverty and Hunger,
Achieving Gender Equality, and Creating a Global Partnership for Development; and
at the same time meeting the Vision 2016 pillar of A Prosperous, Productive and
Innovative Nation.
IV. SECTORAL AND POLICY REVIEWS
21. Mr. Speaker, let me highlight some key sectoral and policy issues, which will be
elaborated upon by the respective Ministers when they present their Committee of
Supply statements to this Honourable House.
Rural Development and Poverty Alleviation
22. Mr. Speaker, Government has established the Multi-Sectoral Committee on Poverty
Reduction, as a Sub-Committee of the Rural Development Council, with the
responsibility to coordinate the implementation of the National Poverty Reduction
Strategy and to carry out the relevant monitoring and evaluation of the poverty
alleviation programmes. It also: monitors the social safety nets and other social
security interventions; links district and community level initiatives aimed at poverty
reduction with national level initiatives; and analyses options that can provide
employment opportunities to address the needs of the poor and enable them to engage
in sustainable livelihoods.
23. The ultimate goal is that all citizens will share in the fruits of our economic growth. To
this end, Government provides a number of social safety nets, which include; the
destitutes’ allowance, the orphancare programme, and the old age pension scheme. A
review of social safety nets was completed last year and all the recommendations of the
Review were accepted, save for the introduction of a means test for the Old Age
Pension Scheme. The major recommendations of the review accepted by Government
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include to: create a risk and vulnerability data base; accelerate out-sourcing in the
provision and distribution of food commodities; develop a coupon based system;
develop a comprehensive database on beneficiaries; and rationalise assistance packages
within an overall household context. The introduction of these changes will start in the
coming financial year, and are expected to go a long way in enhancing the poverty
alleviation focus of our programmes, not only in their design and implementation, but
also in terms of direct impact.
24. Mr. Speaker, despite the insignificant amounts of rainfall in most districts during the
last quarter of 2006, the overall water situation remained stable, and the condition of
livestock and rangelands is fair to good countrywide. Preliminary data indicates that
ploughing and planting for the 2006/07 crop season started late in most areas and that
only about 10 000 hectares had been ploughed and planted by January 2007, compared
to 21 000 hectares ploughed and planted at the same time last season. The drought
recovery programme for 2005/2006 was extended to December 2006 to allow for
completion of projects. Funds spent in this period by the districts to the end of
November 2006 amounted to P153.9 million and the cumulative number of people
employed at different times during this period was 106,833 for a total of 913 projects.
Public Enterprises
25. Mr. Speaker, the performance of most commercial parastatals continued to be
satisfactory during the financial year 2005/06. The average net return on the
shareholder equity held by Government (including reserves) at the beginning of the
2005/06 financial year in the 12 commercially run public enterprises was 7.1 percent,
against 8.1 percent for the previous year. This lower average net return was due to a
decline in the net profits of the Botswana Power Corporation (BPC), the Water Utilities
Corporation (WUC), and a net loss by Air Botswana. Following increases in the cost
of fuel, coal, imported spares and power, BPC’s net profit declined from P162 million
to P121 million. Similarly, WUC’s net profit declined from P175 million to P93 million
on account of restrictions on water sales and increased costs of operations. However,
all of the public enterprises are working on strategies to improve productivity and
profitability. With the exception of Air Botswana, which recorded a net loss of P17
million against the P3 million loss for the previous year, most other commercially run
public enterprises continued to show good performance, with net profits ranging from
P1 million, for the Botswana Agricultural Marketing Board, to P139 million for the
Botswana Telecommunications Corporation.
26. Mr. Speaker, the Botswana Development Corporation (BDC) continues to play an
important role in sustainable economic diversification and employment creation.
During the financial year 2005/06, BDC disbursed about P76 million to various
projects by way of equity and loans, compared with P58 million disbursed in the
previous year. The tannery and can manufacturing projects are two major projects
which were assisted by BDC during the current financial year. A tannery consisting of
factories in Lobatse and Gaborone (Phakalane) which started operating in December
2006, was set-up at a cost of P28 million. A can manufacturing facility, also
constructed in Lobatse, at a cost of P43 million, is to start operating in February 2007.
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At full production these two projects are expected to employ a total of 160 people (40
in the can manufacturing and 120 in the tannery) and also contribute to the
development of a number of related downstream projects in future. The Corporation
has also established an invoice discounting unit which will commence trading in the
first quarter of 2007, to meet the short-term working capital requirements of the
business community.
27. Mr. Speaker, in order to achieve higher productivity and efficiency in public sector
operations, the privatisation process for a number of public enterprises has commenced.
Privatisation of Air Botswana is advanced, with Government currently negotiating with
a company which has been identified as the prospective strategic partner. With regard
to the previously proposed merger of the National Development Bank (NDB) and the
Botswana Savings Bank (BSB), a detailed review of their operations indicated that
there would not be sufficient benefits derived from their merger. Government has,
therefore, instructed the Public Enterprises Evaluation and Privatisation Agency to
proceed with the privatisation process of NDB. BSB will be the subject of an in-depth
study as part of Rationalisation of Parastatals before any decision is taken on its
privatisation. As far as the Botswana Telecommunications Corporation is concerned,
the re-tendering process for appointment of a privatisation transaction advisor has
commenced, and will be finalised in March 2007.
28. Other significant privatisation transactions that are about to commence include the
outsourcing of the Government Employees Motor Vehicle and Residential Property
Advance Schemes, and the disposal of the Guaranteed Loans Insurance Fund. Under
these schemes, Public Officers are entitled to loans guaranteed by Government for the
purposes of purchasing motor vehicles and residential property. The value of the
benefit to Government’s employees will be maintained after the privatisation of these
schemes. All stakeholders, including the Botswana Civil Servants Association were
consulted at an early stage of this project and will continue to be consulted to ensure
that their views are fully taken into account. These transactions are expected to be
concluded by the end of 2007.
29. With respect to the Botswana Vaccine Institute (BVI), Government has approved the
involvement of the private sector to upgrade and expand the vaccine plant to meet the
increasing demand for vaccines within the region. The private sector participation
involves issuing of convertible preference shares by the Institute. Government’s total
ownership of the BVI will be diluted when the preference shares are converted into
equity. However, Government will retain majority shareholding in the BVI on account
of the strategic nature of the vaccine production to the Botswana livestock industry.
The upgrading and expansion entails doubling the production capacity of the vaccine
plant and improving the quality of the vaccines, at an estimated cost of P90 million.
The project is expected to be completed by October 2008.
30. Mr. Speaker, Government is a shareholder in the Botswana Building Society, and still
intends to divest its shares in line with the privatisation policy. Government’s intention
to divest during 2006/07 financial year was, however, delayed due to legal
interventions, which have since been resolved. In this regard, during 2007/08 we will
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be working with the Botswana Building Society to find the best way of selling
Government’s stake in the Society.
31. During 2006 policy reviews of the Motor Vehicle Accident Fund (MVAF) and the
relevant legislation were carried out. As a result, a bill to revise the Motor Vehicle
Accident Fund Act is being drafted. It is expected that the bill will be ready for
consideration by mid year. The proposed changes would result in improved
responsiveness to stakeholder interests, while maintaining sustainable financial
performance of the Fund. Mr. Speaker, the review of the MVAF recommended a major
policy change, to remove proof of negligence as a requirement for compensation of
accident victims. Issues surrounding the determination of negligence have resulted in
denial of compensation to many victims of motor vehicle accidents. With the high
level of motor vehicle accidents in Botswana, this has adversely affected national
productivity and resulted in many hardships and loss of life not compensated for, unless
negligence is proven. The scope of the revised MVAF Act will also be broadened to
include victims of accidents caused by Government vehicles, a feature that is currently
not included in the legislation.
32. Mr. Speaker, to enhance efficiency and transparency in the procurement system, the
Public Procurement and Asset Disposal Board (PPADB) adopted the Standardised
Bidding Packages for services and supplies. These packages provide guidelines on the
selection and compilation of bid documents, so that bidders can submit responsive bids.
The packages will be used from the beginning of the 2007/08 financial year, and
thereby enhance timely completion of projects and provision of services to Batswana.
33. The PPADB is also undertaking a pilot computerization project for the registration of
contractors in the works, services and supplies disciplines, for the Government and the
Local Authorities. The objective of computerisation is to, among other things, establish
Management Performance Publication reporting formats. In addition, the PPADB has
also developed a Code of Conduct for contractors, which highlights the standard of
business practice that registered contractors are expected to adhere to, with a view of
deterring professional misconduct. The Code of Conduct, which is already in use,
helps to streamline the relations between the main contractors and sub-contractors.
34. Mr. Speaker, the Botswana Meat Commission (BMC) has continued its restructuring.
The ECCO Cold Store in the UK has been disposed of. The disposal of the BMC
Tannery is awaiting the completion of the ongoing Environmental Impact Assessment
study, which will be done in 2007. BMC trimmed its workforce during the year by
reducing its Botswana based staff by 247 and its overseas staff by 75. The staff
reduction is estimated to result in a cost saving of about P2.5 million during the
2007/08 financial year. With respect to its performance, the Commission achieved a
throughput of 137 336 cattle for 2006 as compared to 117 962 for the previous year.
This was inspite of the closure of the Lobatse abattoir for two months and the
Francistown abattoir for three months following the outbreak of Foot and Mouth
disease in April 2006. Pending finalisation of its audited accounts for the year 2006,
the Commission is estimated to earn an operating surplus of P28 million compared to
P40 million for the previous year.
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35. Since its inception in 2001, CEDA has approved 1 491 applications valued at P897
million up to December 2006. The total amount disbursed stood at P839.6 million as at
December 2006. Two hundred and eighty projects, with a total exposure of P143
million, have been foreclosed, representing a failure rate of about 19 percent of the
approved applications.
36. Mr. Speaker, the CEDA scheme is under review to assess both the extent to which it
has achieved its objectives, and the terms and conditions of its loans. The result of the
review, which will be completed in the first half of the 2007/08 financial year, will help
to redesign the scheme to suit the current needs and meet the challenges for, not only
entrepreneurship development, but also economic diversification and private sector
development. In addition, Government has commissioned a study to review the current
citizen economic empowerment programmes with a view to enhancing the success rate
of our empowerment initiatives. The terms of reference of the study include, among
others, ways to encourage credible joint ventures between citizen and foreign investors
in all sectors of the economy. The study will be completed in the first quarter of
2007/08.
37. Another important recent empowerment initiative is the CEDA Young Farmers Fund,
which is designed to encourage young people wishing to venture into agricultural
projects. The youth, particularly those who have studied agriculture, will have
improved access to finance at concessional rates, and entrepreneurial training, to ensure
that they are well resourced and better equipped for running agricultural businesses.
Financial Services
38. Mr. Speaker, the financial services sector continues to perform satisfactorily and have a
positive impact on the sustainability and diversification of the economy. However,
there are several new growth areas of the sector that need to be appropriately
supervised. In December of last year, Parliament approved the Non-Bank Financial
Institutions Regulatory Authority Bill, which would bring the supervision of all nonbank
financial institutions and services such as, insurance and asset management, under
one umbrella Regulatory Authority. The Authority’s purview will include all non-bank
financial institutions and services, including those which offer their services outside
Botswana, such as those registered under the Botswana International Financial Services
Centre. In addition, the Regulatory Authority will have powers to institute
representative legal action on behalf of claimants, such as insurance claimants, who
suffer losses; as well as place any non-deposit-taking financial company under statutory
management, as a consequence of contravention of the law. The Authority is expected
to be in place by the end of the 2007/08 financial year.
39. Mr. Speaker, the pensions industry has continued to show significant growth in terms
of assets, which grew from P22.1 billion as at 30th November 2005 to P28.6 billion as
at 30th November 2006. The main contributor to the pension assets growth continues
to be the Botswana Public Officers Pension Fund (BPOPF), which commenced its
operations in 2001/2002, and now constitutes about 81% of the total pension assets.
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While the pensions industry continues to meet the requirements of the Pensions and
Provident Funds Act, under the new Non-bank Financial Institutions Regulatory
Authority Act, there will be additional compliance requirements that all pension funds
will have to meet. This will ensure improved sustainability and global competitiveness
of the pensions industry and that way enhance sustainable economic diversification.
Meanwhile, total assets of the insurance industry also continue to grow, amounting to
approximately P12.4 billion at the end of December 2006, compared to P9.3 billion a
year earlier.
40. Mr. Speaker, trading on the Botswana Stock Exchange (BSE) continues to play a key
role in the development of the financial sector. The value of shares traded on the BSE
in 2006 was P414.7 million, exceeding the value of P238.6 million traded in 2005 by
about 74 percent. The number of shares traded in 2006, which was 87.2 million, also
significantly exceeded 44.2 million shares traded in 2005 by about 97 percent. The
domestic companies share price index grew by 74 percent in 2006 compared to 22
percent in 2005. In a related development, the review of the Botswana Stock Exchange
Act started in February 2006 and will be completed in July 2007. The review is being
done to align the Act to regional and international best practices. Meanwhile, the
installation of the Central Securities Depository for electronic registration of share
certificates will be completed in 2007.
41. Mr. Speaker, to revamp Botswana’s efforts to curb money laundering and prevent the
financing of terrorism, Government is in the process of drafting an anti-money
laundering legislation to address deficiencies in the current regulatory regime and
extend its scope to cover transactions of businesses, such as casinos, accountancy firms,
law firms, real estate agencies, as well as dealers in precious stones and metals, that are
not covered by the current anti-money laundering guidelines.
42. Mr. Speaker, to get a bird’s-eye view, of the financial sector, the International
Monetary Fund and the World Bank are assisting Government in conducting an overall
assessment of the sector. This is being done to benchmark our regulatory and
supervisory systems against international standards and add credibility to the ongoing
financial sector reforms. The results of the assessment, which are expected by mid
2007, will also assist Government to maintain an overall perspective on the wide range
of ongoing financial sector initiatives, which are critical for sustained economic growth
and development.
Trade and Investment Promotion
43. Mr. Speaker, Government remains fully committed to providing an enabling business
environment for the economy to thrive. A number of initiatives have been undertaken,
among them, the review and enactment of new laws, regulations and policies with a
view to promoting investment, employment generation and wealth creation. To this
end, the Industrial Development Bill, which was approved by Parliament in November
2006, will reduce the industrial licenses registration time from the current one month to
about one week. In the meantime, computerisation of the Office of the Registrar of
Companies is nearing completion, which will facilitate implementation of the
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Companies Act regulations in April 2007.
44. Mr. Speaker, attracting foreign direct investment is an important component of our
strategy to achieve sustainable economic diversification and global competitiveness.
The Botswana Export Development and Investment Authority (BEDIA) continues to
promote investment in export oriented activities which will result in sustained
employment opportunities. For example, in 2005, four companies started operations in
Botswana, with the level of investment amounting to P64.1 million and employing
about 1735 persons. During 2006, BEDIA started coordinating the development of a
brand strategy for Botswana, that will promote the country at both local and
international levels. The Strategy is to be formally launched early in 2007. In addition,
the Ministry of Trade and Industry will complete the drafting of a Foreign Direct
Investment Strategy in 2007, to enhance, in a systematic and targeted manner,
Botswana’s attractiveness as an investment location.
45. Mr. Speaker, the Local Enterprise Authority (LEA) was set up last year to spearhead
the development and growth of the small, medium and micro enterprises (SMME)
sector in a more effective manner. The Authority has completed the formulation of its
strategic plan, for implementation during 2007/08 financial year. Through this plan,
LEA will target SMMEs in agricultural, manufacturing, tourism and services sectors in
pursuit of Government’s overall economic diversification strategy, which has also
identified these sectors for priority focus. As part of its support and advisory service
package, LEA will open one-stop service centres in different locations in the country,
through which standardized service to SMME businesses will be provided.
46. In order to further enhance our efforts for sustainable economic diversification and
global competitiveness, Government has signed a number of bilateral investment
treaties, which protect the investment of citizens and/or companies originating in the
contracting state parties. During the past year, two bilateral agreements were signed,
one with Belgium-Luxemburg and the other with Mauritius, bringing to six the total
number of bilateral investment agreements signed so far. Further, in July 2006, a
SACU-European Free Trade Area (EFTA) Agreement was signed, which will result in
free trade between SACU and EFTA (Iceland, Liechtenstein, Norway and Switzerland).
In addition, in August 2006, SADC Member States signed the Protocol on Finance and
Investment, to foster harmonisation of financial and investment policies. The Protocol
will facilitate regional integration, cooperation and coordination in finance and
investment areas, with the aim of diversifying and expanding the productive sectors of
the economy. It will also enhance trade in the SADC region to achieve sustainable
economic development and growth, and eradication of poverty. These arrangements
should strengthen Botswana’s position to compete regionally and globally.
Wildlife and Tourism
47. Mr. Speaker, our wildlife resources are important for growth and economic
diversification and various strategies are necessary for their management and
sustainable utilisation. The elephant and predator management strategies have been
developed mainly to address the problem of wildlife and human conflict by both
13
fencing and allowing open wildlife corridors. In addition, emphasis is being placed on
conservation of wildlife resources through community based natural resource
management projects. Other conservation initiatives include the use of transboundary
conservation areas. As a result, the Shashe–Limpopo Transfrontier Conservation Area
Memorandum of Understanding (MOU) was signed by the Governments of Botswana,
South Africa and Zimbabwe in June 2006, while the Kavango/Zambezi Transfrontier
Conservation Area MOU was signed in December 2006 by the Governments of
Angola, Botswana, Namibia, Zambia and Zimbabwe.
48. Mr. Speaker, the Botswana Tourism Board, which is now in place, will be crucial in
achieving the objective of a globally competitive tourism sector. While Government
retains the regulatory functions, such as, licensing and policy formulation of the
tourism industry, the Botswana Tourism Board is responsible for all operational
functions of the tourism sector, such as marketing, investment promotion and grading
of the tourism facilities. In this connection, the grading of licensed tourist
accommodation facilities, which is aimed at bringing Botswana to international
standards of tourism products and services, started in October 2005. To date, 224 of the
350 licensed tourism accommodation facilities have been graded. The Board has also
started to market and promote Botswana’s tourism products and services locally,
regionally and internationally, through participation in major tourism fairs, exhibitions
and other events in key international tourism markets.
49. Government continues to involve communities in resource conservation and
development of various eco-tourism activities that articulate Batswana’s culture,
heritage and traditional values. Community projects contribute to employment
generation, skills development and entrepreneurship training for members. There has
been a steady increase in the number of citizen-owned tourism enterprises over time,
most recently increasing from 223 in 2005 to 247 in 2006. This has been achieved, in
part, through the reservation of some tourism activities, such as camping sites, caravan
sites, guesthouses, mekoro operations, mobile safaris, motorboat safaris and tourist
transportation for citizens.
Agriculture
50. Mr. Speaker, agriculture plays a vital role in the lives of Batswana and remains critical
for Government’s economic diversification efforts. A number of projects are being
implemented under the NAMPAADD programme, including the Glen Valley Irrigation
Scheme, which is intended to provide serviced agricultural land to farmers interested in
undertaking commercial horticulture and fodder production. So far, the Glen Valley
irrigation system has been installed and it is envisaged that for the 2007/08 financial
year further developments, which include reticulation of electricity and potable water,
construction of internal roads, and provision of sewer lines, will be completed. Still
under the NAMPAADD Programme, the Dikabeya Production Training Farm has been
allocated an eight hectare plot, seven of which are already under cultivation, while the
other hectare is reserved for the establishment of green houses. Crops so far produced
and sold by the Dikabeya Farm are tomatoes, green mealies, butternuts, green pepper,
carrots and onions. In addition, the construction of the Sunnyside dairy training farm
14
has been completed. The farm is currently stocked with 50 dairy heifers, and 50 more
cows will be procured in 2006/07.
51. With regard to dryland farming, the Ramatlabama Production Training Farm has been
fully established on a 610 hectare area and production has been ongoing for the past
three planting seasons at the farm. A total area of 235 hectares was planted in
2003/2004; 359 hectares in 2004/2005; 435 hectares in 2005/2006; and 283 hectares in
2006/2007, cropping seasons. A variety of stock feed products, such as silage and hay
have been produced at the farm, over and above the traditional products, such as maize,
sorghum, sunflower and water melons. In addition, 312 farmers have been trained at
the farm since its inception three years ago.
52. The study on the Viability and Long Term Development Strategy for the Livestock
(Beef) Sub-Sector in Botswana has been completed, and Government is considering its
recommendations. The major finding of the study is that concerted reform is needed in
order to; strengthen efficiency in processing and marketing, improve incentives and
land tenure arrangements, liberalise markets, and restructure public expenditure, in the
sub-sector. The study further indicates that key strategic elements of the reform of the
livestock sub-sector should include; reducing the excess regulatory burden,
restructuring the Botswana Meat Commission, and strengthening production support
systems. Government will decide on the recommendations of the study during the first
half of 2007/08 financial year.
53. Mr. Speaker, the review of the agricultural support schemes, namely; Arable Land
Development Programme, the Emergency Plant Protection Programme, Services to
Livestock Owners in Communal Areas and the Livestock Water Development
Programme, has been completed. The review indicated that the programmes had a
positive socio-economic impact on the beneficiaries. As a result of this finding,
Government has decided to re-introduce the schemes with an estimated total cost of
P135 million and an annual allocation of P50 million for 2007/2008.
54. Meanwhile, a total of 140 326 hectares was ploughed during the 2005/06 cropping
season, resulting in total crop production of 46 026 tonnes, out of which 26 008 tonnes
was from the communal sub-sector, while 20 018 tonnes was from the Pandamatenga
commercial farms. Cereal crop production, which constituted about 79 percent of total
production, represented only 18 percent of total national cereal requirement, which was
estimated at 200 133 tonnes for 2005/06. The low crop production was largely as a
result of several factors that include: leaching of nutrients due to continuous rainfall;
pest damage, especially by quelea birds and rats; and frost damage in Pandamatenga
and the Southern region.
Minerals and Energy
55. Mr. Speaker, diamond production has returned to a more normal path, following the
exceptionally high output achieved in the second half of 2004. Production for the
calendar year 2006 was 33.0 million carats, compared to the 32.8 million carats
produced in the twelve months through June 2006, and the 31.9 million carats produced
15
in 2005. The increase was attributable to improvements in operational efficiency and
productivity of the Debswana mines. However, the diamond market has been sluggish,
and as a result the Diamond Trading Company rough diamond price went down by
about 4 percent in 2006. Meanwhile, DiamonEx (Pty) Ltd (Botswana) was issued a
licence to mine diamonds near Lerala in the Central District and production is expected
to commence at the end of 2007. Further, additional 11 new licences have been issued
for diamond cutting and polishing factories, bringing the total number of licensed
diamond operators to 16. These developments will help to consolidate our efforts
towards sustained diversified growth and global competitiveness.
56. Soda ash production for 2006 was about 300 000 tonnes, compared to 276 218 tonnes
in 2005, while the estimated production of salt was 217 014 tonnes in 2006, higher than
the 2005 production of 196 443 tonnes. Botswana Ash (Pty) Ltd intends to increase
production of soda ash and salt to maintain its market share, as it faces stiff competition
from other producers selling in the region.
57. Mr. Speaker, output of copper nickel and cobalt in 2006 was slightly less than the 2005
output of 68 637 tonnes. However, base metal prices on international markets
continued to do exceptionally well. In 2005 the average price for nickel was $6.18 per
pound, while during 2006 the nickel price rose from about $6.80 per pound to over
$15.00 per pound. The copper price, which averaged $1.84 per pound in 2005, rose to
over $3.63 per pound, before declining to about $2.75 per pound at the end of 2006.
58. Coal production in 2006, at 983 833 tonnes, was about the same level as that of 2005 as
a result of low customer demand. Construction of a coal washing plant to improve the
calorific value and demand for the coal has been approved by the Morupule Colliery
Board. The project is expected to start in 2007 at an estimated cost of P87 million.
Meanwhile, production at Mupane Gold Mine increased marginally to 2 800 kg by the
end of 2006, compared to 2 705 kg in 2005.
59. Mr. Speaker, electrification of our rural areas is important for achieving the objectives
of economic diversification and citizen economic empowerment. Therefore,
Government will speed-up the implementation of the rural electrification programme,
with some additional 100 villages planned to be connected to the national grid by the
end of 2008/09, at an estimated cost of P544 million. In addition, some villages will be
supplied with photovoltaic stand-alone systems. At the same time, Government will
ensure connection of all public facilities, such as schools and clinics in all the villages,
to the national grid. This will include those villages that were connected to the national
grid in the past. The Ministry of Local Government and the District Councils will start
immediately to plan, and commence implementation of this programme at the
beginning of the financial year 2007/08. Meanwhile, Mr. Speaker, diversified
electricity supply sources, aimed at addressing energy security, continue to be
identified. Construction of the expansion of the Morupule Power Station is scheduled
to start in November 2007, with electricity generation expected in 2010, whilst the
proposed Mmamabula Export Power Station is expected to start operations in 2011.
16
Water
60. Mr. Speaker, to improve water supply resources country-wide a number of additional
dams are required as guided by the National Water Master Plan. Construction of
Ntimbale Dam is complete, with construction of some major components of the project
still ongoing, to be completed in June 2007. Meanwhile, preparations are ongoing to
start the construction programme of Dikgathong, Thune, Lotsane and Mosetse dams
during the 2007/08 financial year at an estimated total cost of P2 billion.
61. To complement surface water, various groundwater projects are on-going in
Kang/Phuduhudu, Matsheng, Masama and Bobonong. These will be completed by the
end of 2007/2008, at an estimated cost of about P100 million. Further, the Bokspits
water level monitoring will be fully automated during 2006/07, while the
implementation of the Okavango Delta Airborne Electromagnetic Survey project will
start in 2007 and be completed during 2008. The objective of this project is to identify
and delineate fault systems and shallow geology in order to determine the groundwater
potential of the area.
Works and Transport
62. Mr. Speaker, Honourable Members, the slow pace of the implementation of
Government projects remains a major concern to the Nation. As a result, Ministries will
be allowed to set up Ministerial Technical Units to speed up project implementation.
The Department of Building and Engineering Services of the Ministry of Works and
Transport will provide guidelines and coordination of these Units.
63. In order to improve productivity and enhance global competitiveness of the
transportation system, a study has been commissioned for the development of an
Integrated Transport Policy. The major objectives of the Policy will be to: secure a
sustainable transport system; support all sectors of the economy with adequate
transport; enhance integration and improve connections among transport modes; and
ensure that as far as practical, users pay the full costs of transport. The study
commenced in October, 2006 and is expected to be completed in July, 2007. At the
same time, a substantial exercise of expanding and upgrading the major airports of Sir
Seretse Khama International, Maun, Francistown and Kasane will begin during the
course of the next financial year. These projects are intended to improve our domestic
and international connections, as well as enhance global competitiveness of the tourism
sector.
Information and Communications Technology
64. Mr. Speaker, Government is determined to improve public service productivity through
the implementation of well conceived information and communications technology
strategies. In this regard, the e-government project is aimed at making available, online,
all Government publications for ease of access by the public, including investors.
This project will be completed during 2007/2008. In addition, community access to
information through the internet has been successfully piloted at Kitsong Centres in
17
Gumare, Hukuntsi and Letlhakeng, and it will be rolled out to other localities during
the 2007/2008 financial year.
65. In an effort to further improve service delivery and bring related socio-economic
benefits to the rural communities, provision of telecommunication services has been
completed in seven villages in the Tswapong area. Further, the Rural
Telecommunication project, Nteletsa II, will provide telecommunications services to
197 more villages country-wide over the next three years, starting in 2007/08 financial
year at an estimated total cost of P265 million. For effective service delivery,
Government will undertake to connect all public facilities in villages where the
Botswana Telecommunications Corporation (BTC) has provided backbone
telecommunication infrastructure. This will include backlog connections in villages that
were connected by the BTC in the past.
66. As mentioned in last year’s Budget Speech, BTC is also involved in the international
connectivity project, aimed at improving the country’s connectivity through undersea
fibre-optic cables on the east and west coastal corridors of Africa. These projects are
both making progress. A protocol on the regulatory framework which would govern
the East African submarine cable was signed in October 2006. On the west coast of
Africa, Angola recently announced willingness to participate in the project, which
provides a critical link in the system. The responsible Ministers for Angola, Botswana
and Namibia are, therefore, going to meet in the first quarter of 2007 to chart the way
forward.
67. Mr. Speaker, the establishment of an innovation hub in Gaborone is scheduled to start
during 2007. The major objectives of the hub are, amongst others: to attract foreign
direct investment in high technology businesses, such as information and
communications technology and biotechnology; encourage and support the start-up of
innovative technology based businesses with a focus on exports; accelerate growth of
existing businesses by creating an environment of innovation, and helping businesses to
commercialize innovative products, processes and services; and attract research and
development activities of leading multinational corporations to Botswana. The hub is
expected to improve Botswana’s ability to compete in the global market as a result of a
productive labour force with technical skills and training provided by the hub.
Education
68. Mr. Speaker, major developments earmarked for implementation in 2007/08 financial
year, include the expansion of the University of Botswana, construction of the
Botswana International University of Science and Technology and the Medical School.
The Interim Head of the Medical School was recently appointed, while the recruitment
of core staff, and development of an internship programme for the medical students,
who will start internship in 2007, are on schedule. Meanwhile, the construction of
Oodi College of Applied Arts and Technology commenced at the end of 2006 and will
be completed in the last quarter of 2008/09. In addition, other projects to be undertaken
in 2007/08 financial year include the expansion of the Gaborone Technical College and
Auto Trades Training Centre, as well as the design of Selebi-Phikwe College of
18
Applied Arts and Technology.
69. Mr. Speaker, following the decision to take over the brigades and convert them into
technical colleges, the Ministry of Education is currently undertaking preparatory
activities, including financial, human resource and equipment audits. These audits will
provide a clearer picture of the financial implications of the take-over. Therefore, the
full budgetary requirements for the take-over will be determined and considered by
May, 2007. The conversion of brigades into Government technical colleges will enable
them to offer new qualifications and contribute to poverty alleviation and promote
brigades engagement in economic diversification.
70. Further, five new senior secondary schools will be constructed in Goodhope, Nata,
Shakawe, Mogoditshane and Mmadinare in 2007/08. With completion of these schools
and some technical colleges, in March 2009, the post junior secondary target transition
rate of 83 percent should be achieved. In order to improve productivity and enhance
project implementation, the Boipelego Education Project Unit of the Ministry of
Education will be strengthened with the view to tackling the maintenance backlog in
community junior secondary schools and senior secondary schools, as well as the
construction of new facilities. For 2007/08 financial year, a provision of P45 million
has been made to clear the maintenance backlog of 22 schools. Overall, 71 community
junior secondary schools have benefited from the maintenance backlog programme
since 2003, leaving 134 schools still to covered.
Lands and Housing
71. Mr. Speaker, in order to improve its operational efficiency and sustainability, the Self
Help Housing Agency (SHHA) is being reviewed. In this regard, a consultancy for the
review of the programme was awarded in September 2006, and will be completed in
March 2007. The review is investigating the feasibility of involving both the private
sector and non-governmental organisations in the funding and management of the
programme. The turnkey approach, where houses are designed and built for occupation
by SHHA beneficiaries, will continue to be pursued to address housing needs for the
low income groups. Furthermore, the Poverty Alleviation and Housing scheme, which
was piloted in Mahalapye, Francistown and Ghanzi will have been rolled out to five
districts by the end of 2006/2007. The scheme focuses on creating employment
opportunities and empowering the poor households with capital to produce building
materials, mainly bricks, to build houses for themselves.
72. Mr. Speaker, as I mentioned in the 2006 Budget Speech, a review of all land related
laws and policies is underway to formulate a comprehensive policy which will promote
equitable land distribution and address land use conflicts, land pricing and land rights,
as well as strengthen land management. The new policy will establish a conducive
environment for both domestic and foreign direct investment, thus contributing to
economic diversification and global competitiveness. In addition, a number of land
Acts will be reviewed, including: the Town and Country Planning Act, the Deeds
Registry Act, the Tribal Land Act, the State Land Act and the Land Survey Act. These
Acts will be aligned with the Land Policy and other relevant pieces of legislation. At
19
the same time, the roll out of the computerised Tribal and State Land Integrated
Management Systems is progressing well, and it will be completed by the end of NDP
9 in 2008/09 financial year. These systems will facilitate easy access to land
information that is vital for informed decision making by the land authorities.
73. Mr. Speaker, to help alleviate a serious shortage of both serviced and unserviced land
in some parts of the country, there has been progress in the last two years in land
acquisition; with about 3 000 hectares acquired for village expansions, 500 hectares for
Lobatse Township, and 15 000 hectares for conversion to tribal land. In addition, the
transfer of the land servicing project from the Ministry of Local Government to the
Ministry of Lands and Housing will facilitate direct supervision of the project, which
should improve its effectiveness.
Health and HIV/AIDS
74. Mr. Speaker, in the field of health, the country continues to face a number of
challenges, such as the HIV/AIDS epidemic and shortage of human resources for
healthcare. Despite these challenges, significant progress has been made in a number
of important areas to improve service delivery in the health sector. As of October
2006, the total number of patients enrolled for Anti-Retroviral Therapy (ART) was 75
785 compared to 54 378 in 2005. This was a significant improvement of about 39
percent, but short of the target of 85 000 people on treatment by the end of 2006. The
major focus now is to continue the roll out of ART services at the clinic level, thereby
bringing services closer to the people. Meanwhile, the Prevention of Mother to Child
Transmission (PMTCT) programme continues to experience high uptake, as 92 percent
of women who are known to be HIV positive receive treatment at the time of delivery,
while 91 percent of HIV exposed babies receive the infant formula and drug therapy.
Coupled with these innovations is the introduction of early infant testing, which is
currently being rolled out to the districts to improve coverage.
75. Mr. Speaker, prevention of new HIV infections remains the cornerstone of the
HIV/AIDS control in Botswana. Yet the challenge of treatment for those already
infected is a major test for our health care system. According to the 2004 Botswana
AIDS Impact Survey, the national HIV prevalence rate for the age groups of 18 months
and above was 17.1 percent. Recent studies show that HIV prevalence rates are
declining in the country, especially among the youth. The 2005 Sentinel Surveillance,
which tests pregnant women, aged between 15 and 49 and attending Government
clinics, showed that HIV prevalence had decreased from 37.4% in 2003 to 33.4% in
2005. The preliminary 2006 Sentinel Surveillance shows that HIV prevalence
decreased to 32.4% in 2006, again the highest reduction being among the youth. The
reduced prevalence rate suggests that the rate of new infections is declining.
Local Government Services
76. Mr. Speaker, given the need to improve productivity and enhance service delivery,
Government established the Department of Local Government Technical Services in
2006 to improve project implementation and accountability by the Local Authorities.
20
To this end, a budget allocation of P39 million has been made for the next three years
to engage consultants to assist the Department in project implementation and
management. Once fully operational, the Department will also attend to the backlog of
maintenance of public facilities under the Local Authorities, such as schools and
clinics, for which funds have been allocated. In addition, Government has drafted a
Local Authorities Procurement and Asset Disposal Bill to further enhance service
delivery in the Local Authorities. Consultations on the Bill are currently ongoing with
Local Authorities.
77. Since its introduction in 2004, the Primary School maintenance backlog eradication
programme has been rolled out to 220 schools around the country, covering 566
classrooms, 2 925 toilets and 1 280 teachers’ quarters. Most of these projects will be
completed by the end of the 2007/08 financial year, with the remaining projects
completed before the end of 2008/09. Meanwhile progress has also been made with
regard to clearing the backlog of audited annual accounts of the Local Authorities, with
nine Local Authorities now up to date and seven in arrears by one year. Government
will continue to ensure that all Local Authorities are accountable for the use of public
resources.
V. 2005/2006 BUDGET OUTTURN
78. Mr. Speaker, the budget outturn for the 2005/2006 financial year was an overall surplus
of P4.63 billion, compared to the anticipated budget surplus of P1.58 billion in the
revised budget estimates presented at this time last year. This change in the final
position is attributable to both the higher revenue earnings and lower expenditure than
was expected.
79. Total actual revenues and grants amounted to P22.27 billion, which was higher than the
projected P21.70 billion in the revised budget estimate, representing an increase of P570
million or 2.6 percent. Customs revenue accounted for the highest increase of P434.20
million or 12.4 percent, followed by mineral revenue with an increase of P155.77
million or 1.4 percent. The increase in Customs revenue arose primarily from payment
due to Botswana under the old 1969 SACU Agreement. With regard to mineral revenue,
the increase was attributable to greater than forecast movement in the exchange rate of
the Pula against the US dollar, resulting in increased mineral revenue in Pula terms.
80. Mr. Speaker, the total actual expenditure and net lending amounted to P17.63 billion
compared to P20.12 billion in the revised budget, representing an under spending of
P2.49 billion or about 12.4 percent. Out of this total actual expenditure, recurrent
expenditure accounted for P14.15 billion, which was P1.65 billion below the projected
P15.80 billion in the revised budget. Ministries with the highest under-expenditures
under the recurrent budget include: Education with P636 million; Health with P328
million; and Minerals, Energy and Water Resources with P151 million. For the
Ministry of Education, the under-expenditure was partly due to the fact that some of the
expenditures relating to payment for students outside the country came after the close of
the financial year. With regard to most of the Ministries, the high level of vacancies due
to delays in recruitment of officers with specialized training, and delays in procurement
21
of goods and services are some of the factors that accounted for the under-expenditure.
Mr. Speaker, under-expenditure of the recurrent budget also reflects the benefits of cost
control, cost saving and productivity improvement measures which Government
introduced in the past.
81. Mr. Speaker, development expenditure in 2005/06 financial year recorded an under
expenditure of P667 million, which is about 15% of the P4.45 billion total revised
development budget. Most of the under-expenditures are accounted for by the
Ministries of: State President with P173 million; Works and Transport with P153
million; Education with P81 million; Lands and Housing with P67 million;
Communications, Science and Technology with P66 million. The majority of the
Ministries cite the requirements for an Environmental Impact Assessment, slow land
allocation, poor performance of some contractors and service providers, as well as slow
project design and tendering procedures as the principal contributory factors to the
delayed implementation of projects, hence the under-expenditures.
VI. 2006/2007 REVISED ESTIMATES
82. Mr. Speaker, the original estimates for 2006/2007 was a budget surplus of P1.73 billion.
The revised budget, however, shows a larger budget surplus of P4.39 billion mainly due
to the P2.06 billion increase in Customs revenue from P5.30 billion to P7.40 billion. In
December 2005, when the SACU Council of Ministers met, they approved payments to
Member States in 2006/07 on the basis of estimates of the SACU revenue pool for
2005/06. However, the actual collections were much higher than the estimates. Thus the
final shares to be paid to Member States in 2006/07 take into account the SACU revenue
pool surplus. The SACU Council of Ministers decided that the surplus revenue shares
would be paid in 2006/07 financial year, rather than be spread over more than one year.
Mr. Speaker, I should emphasise to Honourable Members that additional SACU revenue
of this magnitude is unlikely to accrue in the future.
83. Another notable increase is in non-mineral tax revenue, which increased from P2.92
billion to P3.32 billion, representing an increase of P395 million, was as a result of
improved tax collection efforts by the Botswana Unified Revenue Service (BURS).
Honourable Members will recall that BURS was established in 2004, with the main
objective to improve productivity in collection of tax revenue. Therefore, we are reaping
some of the fruits of Government’s productivity drive.
84. On the expenditure side, the revised total expenditure and net lending for 2006/07 is
estimated at P22.41 billion, which is very close to the original estimate. The revised
development expenditure of P5.60 billion is about P200 million below the original
approved development budget allocation of P5.80 billion. Mr. Speaker, this serves to
emphasise the fact that there is need to give more attention to implementation capacity
problems and these are receiving urgent attention within Government, as I shall
elaborate later on. With regard to the recurrent expenditure, the original estimate was
P16.66 billion. As at the end of December 2006, P11.44 billion had been spent, which
was about 68 percent of the revised recurrent budget estimate of P16.86 billion.
22
VII. 2007/2008 BUDGET ESTIMATES
85. Mr Speaker, Honourable Members will recall that in order to maintain a sustainable
fiscal position and in light of Government’s stabilising function in the economy, the Mid
Term Review (MTR) of NDP 9 adopted the Fiscal Rule, which is to be followed in
preparation of annual budgets. The Rule requires Government expenditure not to exceed
40 percent of GDP. As I will make clear later, the expenditure budget is in keeping with
the Fiscal Rule.
86. The MTR of NDP 9 also set out the plan to divide Government expenditure between the
recurrent and development budgets, initially with not more than 75 percent allocated to
the recurrent budget, and at least 25 percent allocated to the development budget. The
intention is to reach the 70:30 apportionment ratio between recurrent and development
by the end of NDP 9, in financial year 2008/09. The allocation of more resources to
development expenditure is critical for sustainable economic diversification. The
proposed budget for 2007/2008 is in keeping with both the Fiscal Rule and the
allocation between recurrent and development budgets set out in the MTR of NDP 9.
Revenues and Grants
87. Mr Speaker, total revenues and grants for 2007/2008 financial year are estimated at
P27.18 billion. This amount is accounted for by: mineral revenues at P10.89 billion or
about 40 percent; customs revenue at P7.40 billion or 27 percent; non-mineral income
tax revenue at P3.55 billion or 13 percent; VAT revenue at P2.52 billion or 9 percent;
Bank of Botswana revenue at P907 million or 3 percent; while the balance of P1.91
billion or 7 percent is income from various fees and charges, which include cost
recovery, property and interest incomes.
88. Mr. Speaker, I should add a word of caution with respect to this revenue outlook. It is
important to recognise two features of the revenue picture for 2007/08. First, a
substantial portion of our revenues are denominated in foreign exchange. In drawing up
the budget it was assumed that there would be no significant movements of currencies
within the basket. However, because of the possible movement between the currencies
of the basket, there is considerable uncertainty underlying the revenue forecast. What is
presented here is the most likely outcome, but it must be recognised that the out-turn
may be considerably different. Second, the unusually high level of the SACU revenue
is unlikely to be sustained in future years. The SACU revenue pool for 2007/08 is larger
because of rapid growth of expenditure on imports and excisable goods in the SACU
members, largely fuelled by rising international commodity prices, but which will stop
rising or even fall if the world economy stops growing as rapidly as it has in recent
quarters. Further, in the years ahead, the SACU common external tariff will continue to
decline as the average tariff falls under the terms of the WTO, thus also reducing the
pool.
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Recurrent Expenditure
89. Mr. Speaker, the 2007/2008 recommended recurrent budget, including statutory
expenditure estimates, amount to P19.82 billion, which is P2.76 billion or 16.2 percent
higher than the 2006/2007 revised budget estimate of P17.06 billion. Honourable
Members will be aware that in addition to the normal growth of Government, the
increase in the recurrent budget estimate is as a result of the take-over by Government of
Community Junior Secondary Schools and increases in operating costs and
establishment of autonomous organizations, such as the proposed Non-Banking
Regulatory Authority and the Local Enterprise Authority, as well as the establishment of
the new Local Authorities in Chobe, Moshupa and Tonota.
90. Mr. Speaker, the total ministerial recurrent budget is shared by the Ministries of:
Education with P5.0 billion or 28.2 percent; Local Government with P2.8 billion or 15.9
percent; State President with P2.4 billion or 13.7 percent; Health with P1.57 billion or
8.9 percent; Works and Transport with P1.33 billion or 7.5 percent; Agriculture with
P695 million or 3.9 percent; Finance and Development Planning with P665 million or
3.8 percent; Labour and Home Affairs with P550 million or 3.1 percent; Minerals,
Energy and Water Resources with P541 million or 3.1 percent; Communications,
Science and Technology with P482 million or 2.7 percent; Lands and Housing with
P444 million or 2.5 percent; Environment, Wildlife and Tourism with P330 million or
1.9 percent; Trade and Industry with P311 million or 1.8 percent; and Foreign Affairs
and International Cooperation with P219 million or 1.2 percent. The remaining six
Independent Departments share P308 million or 1.8 percent of the total recommended
ministerial recurrent budget.
91. The budget for the Statutory Expenditure is P2.13 billion. The largest item under this
category of expenditure is Public Debt Servicing (i.e. repayment of loans and interest
payments), at P1.27 billion. Of this amount, P850 million is for redemption of the five
year domestic bond issued in 2003, which is due in March 2008. Government will reissue
the bond as this is an important contributor to the development of the domestic
capital market. The proceeds will add to the Tertiary Education Development Fund,
which needs large sums of funds for financing of the construction of the Botswana
International University of Science and Technology, the University of Botswana
expansion and the Medical School. Other Statutory Expenditure items included are:
Government’s 15 percent contribution to the Botswana Public Officers Pension Fund
(BPOPF) at P538 million; Pensions and Gratuities for the retired public officers who
have not transferred to the BPOPF and gratuities for Industrial Class employees at P167
million; and miscellaneous statutory commitments, such as Salaries and Allowances for
specified officers at P13 million, refunds of income tax and annual subscriptions to
international organizations, such as the International Monetary Fund, the African
Development Bank and the International Bank for Reconstruction and Development at
P205 million.
92. Mr. Speaker, in line with this Budget Speech theme, Improved Productivity – The Key to
Sustainable Economic Diversification and Global Competitiveness, there will be further
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decentralization of virements to ministries effective the 1st April, 2007. This will
include hitherto restricted votes, such as Travelling, Add Back items, and Personal
Emoluments. The move will further allow Accounting Officers to fully manage their
budgets, with flexibility to move funds from low to high priority activities. In addition,
the Compensation (General Expenses) vote will be decentralized from the Ministry of
Finance and Development Planning to the Attorney General’s Chambers to facilitate
timely payment and better informed budget forecast for the vote. Further, there will be
decentralisation of the payment of air travel costs, which is currently centralized at the
Accountant General’s Department. This will allow Accounting Officers to closely
monitor and control their external travelling costs and commitments in order to avoid
over expenditures.
Development Expenditure
93. I recommend a Development Budget of P7.26 billion. This budget will be funded from
the Domestic Development Fund to the tune of P6.75 billion and donor grants and loans
of P502 million. Mr. Speaker, as I said earlier, this allocation reflects Government’s
desire to allocate more of the national resources for investment purposes in pursuit of
sustainable growth and economic diversification. However, public investment will be
much more than the P7.26 billion, if we take into account capital expenditure by all the
parastatals, as well as the amount to be spent under the Tertiary Education Development
Fund, estimated at P305 million for the 2007/2008 financial year.
94. Turning to the allocations, Mr. Speaker, the Ministry of State President with an
allocation of P1.93 billion takes the highest share or 27 percent of the proposed
development budget, mainly accounted for by the HIV/AIDS Programme at P896
million, BDF at P488 million, the new Presidential Jet project at P215 million and
Police Facilities at P152 million. These four projects’ allocations account for 91 percent
of the Ministry of State President’s development budget, whilst the HIV/AIDS
Programme alone accounts for 46 percent of the Ministry’s total development budget
allocation. The bulk of the proposed amount for the BDF will go towards the
maintenance of equipment; and construction and improvement of facilities, such as
housing. As Honourable Members may be aware, more housing and other facilities will
be required to reduce shortages and cater for the recruitment of women into the army.
95. Mr. Speaker, the Ministry of Local Government with the proposed development budget
allocation of P990 million takes the second largest share of 14 percent. Five projects,
namely; Primary Schools with P222 million, Village Water Supply and Sewerage with
P120 million, Urban Land Servicing with P90 million, Local Authorities Infrastructure
Maintenance with P100 million, and District and Urban Roads with P129 million,
account for 67 percent of the Ministry’s total development budget. It is noteworthy, Mr.
Speaker, that the Local Authorities will be expected to give priority to maintenance and
connection of utilities to public facilities, with the P100 million allocated to alleviate the
backlog of maintenance.
96. The Ministry with the third largest proposed allocation is Works and Transport at P786
million or 11 percent of the total development budget. Within this Ministry, the Air
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Transport Infrastructure project is allocated P188 million, followed by Secondary Roads
Construction at P182 million and Bitumen and Trunk Roads Improvements at P179
million. These four projects account for 70 percent of the Ministry’s total development
budget estimate. The project to clear the backlog of maintenance of central Government
infrastructure is allocated P57 million. This amount excludes the allocation to the
Ministry of Education, which will have a separate maintenance backlog vote of P45
million in 2007/08 financial year.
97. The Ministry of Minerals, Energy and Water Resources is allocated P637 million, which
is 9 percent of the proposed total development budget. Major Villages Water Supply and
Development project takes the largest share of P230 million, followed by Water
Planning and Development with P183 million, and Renewable Energy and Power
Development with an allocation of P120 million. These three projects constitute 84
percent of the Ministry’s total development budget estimate.
98. The Ministry of Health with an allocation of P636 million, represents 9 percent of the
total development budget. Improvements to Hospitals project takes the largest share of
the Ministry’s development budget allocation with P474 million, followed by the
Institutes of Health Sciences with P105 million. These two projects account for 91
percent of the Ministry’s development budget estimate. Expenditures on health are also
found in development budgets of other Ministries. Hence, on a functional classification
basis, overall development expenditure under the health sector, including HIV/AIDS
and primary health care accounts for 20 percent of total development expenditure.
99. The Ministry of Education is allocated P584 million, which is 8 percent of the proposed
total development budget. The Secondary Schools project takes the major share with
P305 million, followed by Colleges of Education with P176 million. These two projects
account for 82 percent of the Ministry’s total development budget estimate. I should
add, Mr. Speaker, that this large development allocation under the Ministry of Education
does not include the amount to be spent under the Tertiary Education Development
Fund. Further, as I have noted, the Ministry of Education has been allocated an amount
of P45 million for maintenance backlog of junior and senior secondary school facilities,
which is included in the proposed development budget.
100. The Ministry of Lands and Housing with P363 million accounts for 5 percent of the
proposed total development budget. District Housing takes the largest share at P128
million, followed by the Botswana Housing Corporation Finances with P70 million and
Land Boards Development with P59 million. These three projects constitute 71 percent
of the Ministry’s total development budget. The Botswana Housing Corporation
Finances project is mainly on-lending of the Chinese loans for the development of
houses at various locations in the country.
101. The Ministry of Communications, Science and Technology with a share of P347
million accounts for nearly 5 percent of the total development budget. The Botswana
Telecommunications Corporations (BTC) Finances project has the largest share of the
proposed Ministry’s development budget at P214 million, which includes P193 million
for conversion of Public Debt Service Fund and Domestic Development Fund loans to
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BTC into equity. The other components of the BTC Finances project are Nteletsa II,
which is allocated P15 million and the Rural Operation Subsidy, with an allocation of
P5 million. The other major project allocations within the Ministry of Communications,
Science and Technology are for the Development of the Department of Information and
Broadcasting at P53 million, and the Science and Technology Research Institutions at
P32 million. These three projects account for 86 percent of the Ministry’s total
development budget.
102. Mr. Speaker, the Ministry of Labour and Home Affairs is allocated P274 million,
which is nearly 4 percent of the total development budget. Within this Ministry, the
Prison Facilities project takes the largest share at P73 million, followed by the Ministry
of Labour and Home Affairs Facilities with P64 million, and Sports and Recreation with
P45 million. The three projects account for 66 percent of the Ministry’s total allocation
under the development budget.
103. The Ministry of Environment, Wildlife and Tourism has a share of P189 million,
which is 2.6 percent of the total development budget. Within the Ministry, the largest
share is taken by Urban Sewerage with P58 million, followed by National Rural
Sanitation Programme at P50 million, Development of Meteorological Services at P31
million, and Development of the Department of Wildlife and National Parks at P29
million. The four projects account for 89 percent of the Ministry’s share of the proposed
development budget.
104. The Ministry of Agriculture with P162 million accounts for 2.2 percent of the
proposed total development budget. The Agricultural Support Schemes take the largest
share of the Ministry’s allocation with P50 million, followed by the Botswana College
of Agriculture at P25 million, Improvement to Disease Control with P21 million and
NAMPAADD Implementation with P13 million. These projects constitute 67 percent of
the Ministry’s share of the total development budget.
105. The Ministry of Finance and Development Planning is allocated P135 million which
is under 2 percent of the proposed total development budget. Within this Ministry, the
Ministry of Finance and Development Planning Facilities project takes the largest share
at P44 million, followed by Consultancies and Research with P36 million, Customs and
Immigration Facilities with P26 million and the Ministry of Finance and Development
Planning Computerisation with P23 million. These projects constitute 96 percent of the
Ministry’s development budget allocation.
106. The Ministry of Trade and Industry with an allocation of P93 million takes 1.3
percent of the proposed total development budget. Within the Ministry, the largest share
goes to the Ministry of Trade and Industry Infrastructural Facilities project with P31
million, followed by the Development of BEDIA with P27 million and Cooperative
Development at P12 million. These projects constitute 75 percent of the Ministry’s
development budget allocation.
107. Mr. Speaker, the remaining four Ministries and Independent Departments share P130
million or 1.8 percent of the total proposed development budget.
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108. Mr. Speaker, in an effort to address the problem of slow implementation of projects
and following on this year’s theme, of Improved Productivity – The Key to Sustainable
Economic Diversification and Global Competitiveness, Ministries will be given
responsibility to approve their Project Memoranda up to a threshold of P10 million. My
Ministry will formulate guidelines as to how this will be implemented, given that
ministerial approvals will still have to be included in the Domestic Development Fund
Tranche for the issue of warrants in accordance with the provisions of the Finance and
Audit Act. Ministries will be expected to request movement of funds from slow
spending to fast spending projects, before requesting supplementary funds. However,
ministries should not use this option to concentrate on easy to implement projects at the
expense of priority projects, for the sake of showing high expenditure patterns.
Furthermore, the requirement for Environmental Impact Assessments is being waived
on a case by case basis. Ministries have been urged to seek land immediately projects
are included in the Plan to avoid delays when funds are released. Technical
implementing departments such as the Department of Building and Electrical Services,
Boipelego Education Project Unit and similar ones in the Local Authorities are being
strengthened with additional resources to improve their implementation capacity. In
addition, procurement processes of the PPADB will continue to be reviewed in an effort
to speed up project implementation. In this regard, a bill to amend the PPADB Act will
be tabled in Parliament in 2007/08 financial year.
109. Honourable Members may recall that, last year, I advised Ministries and other
implementing agencies to take advantage of the decentralisation of decision making,
such as undertaking pre-contract services after the draft Estimates had been approved by
Cabinet. However, the majority of ministries did not take advantage of this dispensation.
I wish to emphasise again that ministries should undertake pre-contract services as
directed last year in order to improve on project implementation. Those Ministries who
show progress in implementing projects included in the 2007/08 development budget
will be allowed to start pre-contract activities during 2007/08 for the remaining NDP 9
projects.
VIII. PUBLIC SERVICE SALARIES
110. Mr. Speaker, as part of the Mid Term Review of NDP 9, approved by Parliament in
2005, it was agreed that adjustments to public sector salaries be effected annually at half
the rate of inflation, subject to affordability, with additional increases being
accomplished by productivity improvements. The Consumer Price Index shows that the
average cost of living in 2006 had increased by 11.6 percent over 2005.
111. Mr. Speaker, following the meeting of the National Employment, Manpower and
Incomes Council on the 29th January, 2007 recognition was given to ensuring improved
productivity and sustainable economic diversification and global competitiveness, in
line with the theme. In this regard, considering affordability, the need to promote
productivity within the economy, and the risk associated with the revenue forecast,
Government has decided to award a public sector salary increase of 6 percent across the
board. This will include: salary adjustments for the Public Service, the Local Authorities
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and Parastatals that depend on subventions from Government; the pensions for the Old
Age, War Veterans and Public Service pensioners who have not joined the Botswana
Public Officers Pension Fund; as well as allowances for destitutes, Village Development
Committees, Home Based Care volunteers, and all other community based organisations
paid for by Government or the Local Authorities.
112. Mr. Speaker, it should be noted that the 6 percent salary increase that I have just
announced is in addition to the annual performance pay increment that members of the
Public Service receive, except the few who are at the top notches of their pay bands.
IX. OVERALL BALANCE
113. Mr. Speaker, on the basis of the 2007/08 budget proposals, with total revenues and
grants estimated at P27.18 billion, and total expenditure and net lending at P25.91
billion (net of amortisation and some small transactions, which are excluded in
calculating a budget balance), a budget surplus of P738 million is forecast after
including the cost of the public sector salaries increase estimated at P529 million.
114. Mr. Speaker, the Expenditure Estimates for both the Recurrent and Development
Budgets had been compiled before the recent new Ministerial appointments were
announced by His Excellency the President. I would like to assure Honourable
Members that, while we will need to reclassify some budget lines to reflect the new
Ministerial portfolios, it will be possible to accommodate most of the expenditures
within the total expenditure budget I have just tabled, as most of the expenditures are
already included under the existing departments.
115. The GDP forecast for the 2007/08 financial year is P66.67 billion in current prices.
The proposed total expenditure budget is 39.75 percent of the forecast GDP and is,
therefore, in conformity with the Mid-Term Review of NDP 9 Fiscal Rule for
sustainable economic diversification. The share allocated to the recurrent budget for
2007/08 is 72.6 percent, compared with 75.1 percent in the revised budget for the
current year. This leaves 27.4 percent for the proposed development budget, and shows
that we are moving towards the 70:30 apportionment by the end of NDP 9, which is the
2008/09 financial year.
X. FISCAL LEGISLATION
116. Mr. Speaker, in the 2006 Budget Speech, I announced several changes in the Income
Tax and Value Added Tax Acts. Most of these proposals have been implemented, with
exception of the Tax Administration Bill, which took longer than anticipated to draft as
a result of capacity constraints and complexity of issues to be tackled. I do not wish to
introduce any new tax proposals at this stage and prefer to consolidate the
implementation of last year’s proposals and complete the drafting of the Tax
Administration Bill, which will be coming before Parliament later this year. The Bill
will ensure that the various tax procedures under the revenue laws are simplified and
harmonized for the benefit of taxpayers and further enhancing productivity of the
Botswana Unified Revenue Service.
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117. Mr. Speaker, the amendment to the Income Tax (Training) Regulations mentioned
by His Excellency the President in the State of the Nation Address in November 2006
have been gazetted. This is to empower the youth and create employment for them, as
well as to encourage employers to employ and train the youth, who, in many instances
are inexperienced. The amended Regulations include: (a) allowing businesses that offer
unemployed youth any form of approved training by way of formal institutional training
or on the-job-training to benefit from the tax deduction provisions; (b) making training
expenses for part-time employees eligible for 200 percent deduction; (c) allowing
apprenticeship to be conducted at the employer’s place of business; and (d) removing
the requirement that work done by the employee or apprenticeship should not add value
to goods and services provided by the employer. Mr. Speaker, may I request
Honourable Members to publicise the scheme as they have been doing with others. The
Botswana Unified Revenue Service has been instructed to carry out a wider publicity on
these regulations to make businesses aware of the benefits.
XI. CONCLUSION
118. Mr. Speaker, while Botswana has grown rapidly over the past 40 years, the major
challenge now is to sustain that high growth with attendant diversification beyond the
predominant diamond mining sector. With diamond production reaching its plateau,
unless other larger and more profitable pipes are discovered, the major objective is to
increase the contribution of other minerals, as well as the economic value of high
productivity non-mining sectors. It is in this light that we must achieve a higher growth
path through Improved Productivity and Sustainable Economic Diversification, which
will ensure Global Competitiveness and thereby a higher living standard for all
Batswana.
119. The major vexing issue confronting the public sector, as I mentioned at the
beginning, has been implementation of existing projects which are massive when
compared to the past. With the implementation of such projects, we should significantly
accelerate the growth of the economy. Last year, Government allocated a record P5.8
billion of funds to development expenditure, and this year, that figure has been
increased by a further 25.9% to reach P7.26 billion. I hope with the flexibility in project
management and strengthening of some technical departments I mentioned earlier,
implementation performance should improve for the economy to absorb increasing
numbers of the labour force and reduce poverty significantly. If we focus fully on
implementing various projects and programmes as Ministries, the private sector, labour
and NGOs, we can succeed, as we must, since failure to do so is not an option.
120. Mr. Speaker, I also believe that as a society we should change our mindset towards
self improvement and independence. Gone are the days when our individual successes
depended on Government largesse, subsidies and preferences. As we discuss issues of
citizen economic empowerment, we should be mindful of the trade-offs and costs
associated with reservation schemes and price preferences. We should clearly and
objectively differentiate what the society, through Government, can do for an individual
and what individuals ought to achieve through their own efforts. It is the quality and
30
energy we put into our endeavours that will yield sustainable productivity growth and
global competitiveness.
121. Mr. Speaker, before closing, on behalf of the Government of Botswana I wish to
express the Nation’s gratitude to our Developmental Partners – multilateral agencies,
individual Governments, NGOs and private companies and foundations, who have
assisted us over the years since Independence. Without their support, we would not have
been able to achieve many of the successes of the last 40 years. Their support is highly
valued and we look forward to its continuation in future.
122. Mr. Speaker, that concludes my Budget Speech for 2007/2008. I now move that the
Appropriation (2007/2008) Bill, 2007 be read for the second time.
123. I thank you, Mr. Speaker.