Tulani Ngwenya
Gaborone – Botswana anticipates a resurgence in economic growth this year and intends to ramp up spending on infrastructure development as part of a “stimulus” budget, announced Finance Minister Peggy Serame on Monday, February 5, 2024.
“The proposed budget will address a wide range of infrastructure gaps,” stated Minister Serame in her budget speech, emphasising the significance of infrastructure investments. She pointed out that projects in the water, transport, and energy sectors will receive substantial funding, reflecting a more than 33% increase in infrastructure spending for the upcoming fiscal year.
The nation’s economy, heavily reliant on diamond exports, which contribute 30% of revenue and 70% of foreign exchange earnings, faced a downturn last year due to a decline in diamond demand. Minister Serame revealed in her address that growth stood at 3.2% in 2023, lower than the initial forecast of 3.8%, with projections of 4.2% growth this year and 5.4% in 2025, contingent upon global economic recovery.
“The stimulus budget is necessary to drive the country towards its high-income economy target,” Minister Serame affirmed, underscoring the critical role of the budget in achieving the national development objectives outlined in the RESET and Reclaim agenda.
Read more on the matter:
Botswana to invest economic gains in infrastructure focused stimulus
Find more news on Africa News 24
Proposals put forward by Finance Minister Serame outline a record funding request of P102 billion for the 2024-25 budget, a historic high aimed at fostering economic transformation and inclusivity. Revenues are forecast at P93.6 billion against expected expenditures of P102.3 billion, resulting in a deficit of approximately P8.7 billion, constituting nearly three percent of GDP, the highest since 2020.
“Through this budget, the government aims to propel the implementation of projects to unlock opportunities for sustainable jobs, improve the quality of life, reduce poverty, eliminate gross inequalities, and ultimately achieve a high-income status,” Minister Serame stated, highlighting the overarching objectives of the budgetary allocations.
While acknowledging risks to diamond revenues stemming from uncertain economic conditions and global sanctions, Minister Serame stressed the necessity of the “stimulus” budget to propel Botswana towards its high-income economy goal and address national priorities outlined in the RESET and Reclaim agenda.
Despite the expansionary fiscal stance reflected in the budget, Minister Serame reiterated the government’s commitment to fiscal sustainability and spending efficiency. Measures include maximising domestic revenue collection, curbing expenditure growth and leakages, and addressing spending inefficiencies.
Infrastructure development takes centre stage in the budget, with P29.8 billion allocated for development expenditure, a significant portion of which will be directed towards ongoing projects in roads, water, rail, ICT, and the Temo Letlotlo agricultural inputs programme.
Minister Serame’s proposals underscore a strategic approach aimed at unlocking opportunities for sustainable job creation, improving living standards, reducing poverty, and achieving high-income status. As Botswana charts its path towards economic recovery and transformation, the budget signals a bold commitment to infrastructure development and fiscal prudence.
