After three years of deficit budget, it is nice to note that the 2012-2013 budget shows a surplus and the revised 2011-2012 budget estimates a reduced deficit of P 3.76 billion. It could be argued that the balancing of budget comes through reduced spending and not through diversified revenue base; however, a surplus budget brings in a positive feel to the economy.
Government is giving a clear signal that they want the private sector to step up and partner with Government on their pursuit towards improving efficiency, creating employment opportunities and foster private sector growth. Human Resource Development Council (HRDC) and National Economic Diversification Council (NEDC) have a lot of responsibilities in terms of providing bold and strategic direction towards the skills development and diversification vision of Botswana. The effectiveness of this partnership is going to be a key factor towards achieving a diversified economy and sustained growth.
The improved projected economic growth of sub-Saharan Africa from 5.2 percent in 2011 to 5.8 percent in 2012 could mean that our region could be centre of attraction for the international markets which are underperforming. Botswana projected growth rate of 4.4 percent still poses an opportunity for growth. The future relocation of DTC to Botswana has already created a lot of excitement in the market, despite cautious outlook on the diamond sector. The upgrade of the sovereign rating by Moody reflects improved confidence in Botswana and this need to be cached on well. Botswana ICT sector has been experiencing challenges and in particular the bandwidth restrictions have been a bottleneck for existing business and potential inbound opportunities. On this front, the investment of P50m towards improving the bandwidth is a welcome move and we look forward to a faster browsing experience at reduced costs.
This will do a lot of good to business across all sectors. On the other side, infrastructural investments like power, water will enhance a lot of investor confidence.Talking about enhancing investor confidence, the importance given to Doing Business agenda by Gob is commendable. The various components covered in the Doing Business review of World Bank including aspects like starting a business, obtaining permits, trading across borders etc.relate of every person in this society and we look forward to a marked improvement on these areas which will automatically address and improve the FDI. Government intention to increase local borrowings is expected to bring in more opportunities locally and could benefit the local financiers and the capital markets.
There is not much talked about on the fiscal legislation, having said that, as the minister said, the recent tax reform changes in 2011-12 could bring in an improved compliance and create a positive fiscal impact. The planned revisions and amendments to key legislations like CIU, VAT, Banking Laws and tax is a much needed and welcome move and it is important to focus and push on these revisions for the benefit of the stakeholders.In summary, the change in mind-set and focus on our priorities is expected to give a much-needed boost to the country and we look forward to continued prosperity.
*The author is partner, Advisory Services and president of the Botswana Institute of Chartered Accountants.