Budget 2024: Crunch time for implementation crisis
Lewanika Timothy - Pauline Dikuelo - Mbongeni Mguni | Monday February 5, 2024 06:00
As the country waits to hear the last budget before the elections in October this year, it is anticipated that this year’s figures will wow voters, especially as they comprise the balance of spending under the P64 billion Transitional National Development Plan (TNDP).
While keeping an eye on the troublesome deficit, Finance Minister, Peggy Serame, will also be expected to more rigorously address the poor project implementation that has dogged spending for years.
The TNDP, which outlines the projects the government is funding up to March 2025, points out the challenges around implementation include poor scoping, weak monitoring, capacity constraints and inaccurate costing of projects. They also include ineffective appraisal of projects, weak monitoring and evaluation, lack of coordination and fragmentation amongst authorities.
The brains behind the transitional NDP have said the absence of accountability for implementation at the level of ministries, departments and agencies, is a challenge.
Serame has at times sounded exasperated. As she frequently details the interventions being introduced to curb poor implementation, she has – at the same time – been forced to reveal figures that show the trend is continuing and in some cases worsening.
After announcing the largest development budget ever of P21 billion last February, Serame later revealed that three months into the 2023-24 financial year government ministries had utilised around P5.6 billion. This below optimal use of funds meant that government departments and ministries had utilised a meagre 27% of the allocations approved by Parliament.
Serame further revealed that 17 government organs had used less than 10% of their allocated budgets while the best performing ministry, being Local Government, had used 52%.
“Previously, I mentioned that there are often complaints about insufficient development budgets, yet these budgets are not being fully spent, and this year is no exception,” Serame said during the launch of the 2024–2025 budget process in Mochudi in August.
“This year, I want you to go and ask them about this and get them to respond. Ask them why they are not spending this money when projects are not moving.”
Funds disbursed to the development budget are meant to serve as seed investments in government’s capital projects in different sectors. In Botswana, the development budget finances the building of roads, clinics, water supply and other major infrastructure-related projects.
Poor implementation costs the country billions of pula in direct and opportunity costs, but more importantly, denies citizens critical services and forestalls their economic aspirations.
At its heart, poor implementation of projects not only means wasting the millions paid to consultants who draw up project plans, but also the potential benefits and opportunities to citizens such as access to electricity, water and other infrastructure, are lost in the wind.
At a time when nearly all of the budget deficit is being financed by domestic and external debt, poor implementation means taxpayers foot the bill for interest whose principal is not being optimally put to use.
On Monday, Serame will likely once again stress the interventions government has rolled out to address poor implementation. These include the adoption of the three-stage project appraisal system to enhance implementation, the incorporation of the new development manager model to facilitate better infrastructure projects delivery and the enhancement of the Development Project Monitoring System. The ministry is also refining proposed amendments to the Public Finance Management Act, which will empower the minister with more effective recourse in cases of budget underspending and misspending by public officers.
However, with the prospects of a colossal development budget, as envisaged by the TNDP, Serame will be expected to provide more assurances that taxpayer funds and costly debt are being optimally utilised.
The TNDP required the spending of nearly P30 billion in the first year, 2023-24, substantially more than the final P21 billion approved by Parliament. Serame last February said fiscal authorities restrained themselves from pressing ahead with the required TNDP spending for the first year.
“The sharp increase would require government to pay higher interest rates on its borrowing, further threatening fiscal and debt sustainability,” she said.
This year, it is expected that the TNDP spending will require close to P43 billion as it wraps up. With the current trends of poor implementation, and as debt and its associated costs climb, the spending that could have wowed taxpayers may instead leave a sour taste in the mouth.