Khama’s ESP breaks no new ground14 December 2015
Government plans to create over 27 000 jobs and allocate 34 000 plots as part of its expansionary fiscal Economic Stimulus Package (ESP) in the 2015/16 financial year to revitalise an ailing economy reliant on diamond revenue, a provisional report seen by INK Centre for Investigative Journalism shows.
The report shows that President Ian Khama’s ESP – focuses on revving up small businesses and boost public works, but – does not break new ground on reforms that politicians say are needed to end decades of economic stagnation and lack of diversification away from diamonds.
About a third of the P2.2 billion stimulus is expected to boost small businesses, while another third has been allocated for public works. The report is provisional and, as expected, excludes key procurement in defence. A column on the ministry of Defence Justice and Security concerns itself with the refurbishment of Thebephatshwa Airbase Stadium and police houses. The ministry of health is also excluded in the report which is yet to be finalised and approved by Cabinet. However a source closer to the drafting of the report said the document has not reached other ministries for vital input.
Top among Khama job creation initiatives include tourism and road construction projects, which are expected to create a total of 7300 “long term” jobs in the year under review. The report identifies a “dam tourism project” under the Ministry of Minerals, Energy and Water Resources as a key economic development drive initiative and explains that the project is “awaiting completion of the development of Tourism Master Plan” and is envisaged to commence in April 2016.
Of the 27 000 jobs expected to be created, 5405 have been identified as “short term” jobs. These include general maintenance, land servicing and tourism projects. The rest, or 21 481 jobs identified as “long term” jobs will be on the development of Gaborone Game Reserve, maintenance and upkeep of buffalo fences across the country and maintenance and upkeep of police houses across the country.
Observers say Khama’s aim is to spread the growth–boosting effects of his policies – a combination of expansionary fiscal policy and structural reforms – right across economic sectors. So far his socialist policies have not been able to rev up the economy. Much of the P17 million ear-market for the development of the tourism sector will go towards development of Gaborone Game Reserve, Kasane/Kazungula Project and the less known “dam tourism” projects of which P3 million has been provisionally ear-marked for the Thune, Dikgathong and Letsibogo dam.
President Khama announced his economic stimulus package at a Botswana Democratic Party congress in October as fears mount that the mineral led economy is struggling to grow in the wake of a weak diamond trade.
Figures show that rough diamond sales continue to decline, falling eight percent to P845 million in the second quarter when compared to first quarter sales.
Opposition parties have dismissed Khama’s ESP challenging him to explain how ESP will contribute to the growth of the national out or Gross Domestic Product. Both the finance ministry and the IMF revised GDP growth downwards to an average 4.2 percent citing challenging diamond trading conditions.
There are those who say Khama’s package does little to change the broader picture of an economy struggling for momentum given sluggish diamond trade amid slowing growth in Asian markets and a weakening Rand.
The stimulus highlights a tough balance President Khama must take between lifting the economy and curbing runaway youth unemployment and anger among land shortage.
This explains why the Ministry of Lands and Housing has been allocated P600 million for ESP projects in the 2015/16 financial year for land servicing, maintenance of pool houses and turnkey projects.
Serving of residential land – which has provisionally been allocated P142 million – appears to be a priority in Khama’s ESP with the central region expected to have over 9 500 plots serviced. Tati Siding follows with a provisional 4300 plots.
However bureaucrats say Khama’s ambitious ESP projects will be frustrated by the usual red tape at Local and central government. Should this happen, it is likely to jeopardize the 401 short term jobs expected to be created under the land servicing scheme. The Ministry of education and Skills Development, government will expand 164 classes across the country and refurbish 12 Junior Secondary Schools and four senior schools.