Matambo bemoans donor decline
Finance Minister, Kenneth Matambo has put out a begging bowl for Overseas Development Assistance (ODA) at the 5th General Assembly of the African Tax Administration Forum (ATAF), this week in Gaborone.Though rated as middle income economy, Matambo said the local economy still needs assistance and has urged international donors to consider Botswana.
“There is a notion that Botswana is rich out there, we do not necessarily agree, I do not believe Botswana is rich, we have pockets of poverty here and there. We certainly most welcome any assistance from anybody,” said Matambo bemoaning that overseas’ development assistance to developing countries has declined over the years.
“The decline in ODA has spurred many of the developing countries in Africa to turn to domestic resources for financing their development needs,” said Matambo.According to the Minister, the local contribution of ODA to the budget is less than one percent, while 60 percent of Botswana’s budget sourced from domestic tax revenue and balance comes from the domestic duties and other revenues.
“The tax to gross domestic product (GDP) ratio is around 20 percent, which, though lower than in Organization for Economic Cooperation and Development (OECD) countries, is very competitive among the Sub-Saharan countries,” said Matambo, highlighting that despite the relatively high tax to GDP ratio, the country’s challenge remains narrow domestic revenue base and volatility of the two main sources of mineral revenue and customs receipts.
He challenged African tax collectors to gear up mobilising domestic tax revenue to finance infrastructural development on the continent.“With the declining ODA, it is time for revenue authorities to step forward and assist governments to mobilise adequate domestic resources to finance the infrastructure development in Africa,” Matambo said.
Citing statistics, Matambo indicated that Africa’s funding gap for infrastructural growth by financing partners such as African Development Bank run into hundreds of US dollars.However, Matambo told the ATAF general assembly gathered under the theme, ‘Moving Africa beyond Aid through Tax Revenue Mobilisation’ that governments are cognizant of some of the challenges that revenue authorities face in mobilising domestic revenue for development.
“Addressing some of these challenges within the confines of the borders of your member states can be overwhelming, hence, the need for fora such as the African Tax Administration Forum to brainstorm on these issues,” said Matambo.
Over the past nine years ATAF has trained over 15 000 tax official in its 38 member states, produced a number of guidelines, guided some of the nations on tax treaties and apart from online training, the Forum has also established Tax Researchers Network of academics.“Four of our members have collected 170 million more through our intervention and would have lost it,” said Logan Wort, ATAF Executive Secretary highlighting the forum’s achievements.