Matambo calls for prudence

The 2018/19 financial year budget points to a constrained fiscal space, which continues to characterise the domestic economy. Minister of Finance and Economic Development, Kenneth Matambo says this is mainly a result of slow growth in revenues, coupled with continued expenditure pressures due to additional budgetary requirements by various Ministries.

“Total revenues and grants for the 2018/19 financial year are estimated at P58.81 billion, with the largest amount of P19.67 billion of the total revenues expected to be accounted for by mineral revenue.”For the financial year 2016/17, total revenue and grants amounted to P56.8billion, which represented 2.0 percent over the target of P55.9billion estimated in the revised budget.

Of this amount, 39.6percent was mineral revenue; 20.8 percent customs and excise;16,8 percent non-mineral income tax; 11.6percent Value Added Tax and 5,0 percent Bank of Botswana (BoB) revenue. Except for mineral, customs and excise and BoB revenue items, the performance of most revenue items in the budget outturn were below their targets.

Mineral revenue outperformed its target in the revised budget by 8.0 percent due to increased mineral tax received during the financial year following sale of the diamond inventory. Meanwhile, for the 2018/19 financial year, the budget strategy paper by Minister Matambo outlines that Customs and excise is projected to account for the second largest share of total revenue at P14.00billion, which translates to 23.8 percent.

This will be followed by non-mineral income tax at P13.36billion (22.7 percent) and VAT at P8.11billion (23.8 percent) of the total. The remaining 6.3 percent of the total revenues expected in 2018/19 financial year will come from BoB, as expected earnings on government investment account of the foreign exchange reserves and other revenues, which is mainly property income taxes, fees and grants from donors and development partners.

Matambo called for prudent spending by government ministries and departments. “We need a budget that provides for better infrastructure, stimulates economic activities and create employment opportunities,” he said. He also called for close monitoring of expenditures to ensure that there is value for money.