Boko’s fiscal path takes shape
Mbongeni Mguni - Pauline Dikuelo - Lewanika Timothy | Monday November 25, 2024 13:40
In one of his first remarks after ascending to the presidency, Duma Boko invoked Mark Twain’s famous quote: “There are three kinds of lies: lies, damned lies, and statistics”.
The American writer’s famous remarks generally point to the tendency of statistics to mask over people’s brutal realities, as reflected in quotes by other commentators such as “we don’t eat GDP”.
President Boko, who has promised a human rights approach to the economy, has said he wants his administration to prioritise boosting the lived experience of Batswana, rather than to be preoccupied with the attainment of “beautiful numbers”. This approach was somewhat evident in his inaugural State of the Nation Address (SONA) on Tuesday, where Boko focussed on spelling out his broad economic trajectory of “working together to build a robust economy and a thriving society, reinforcing the fabric of the nation for future generations”.
The SONA, as it is commonly known, was sparse on numbers, whether of past or future spending, in keeping with Boko’s philosophy.
However, the new President did announce a full-scale forensic audit to track down misspending and other forms of wastage from the previous administration. “I have heard your voices. I have seen your messages. You want to know where your tax money has been spent.
“We will find that out and report back to you,” he said. Boko stressed that the audit would not be a ‘witch-hunt’. “We do so not to subject anyone to targeted demonisation. “We do so to probe and examine the functional efficacy of our existing systems and institutions.” The forensic probe of spending under the past administration is critical as Batswana have not had sight of audited public finance figures since at least the year ended March 2021. In the intervening period, a steep downturn in diamond sales, set against expansionary, election-fuelled spending, has eroded government savings to the tune of billions of pula and forced the fiscus to lean heavier on domestic capital market borrowings, whose interest rates are rising.
The weaknesses of the Government Accounts Budgeting System (GABS) have also fogged the view of fiscal planners, meaning that those in charge of planning for the economy may have been doing so in a room whose bulb keeps flickering on and off. In the midst of this spending have been increasing allegations of state-level corruption, nepotism and gross misspending. “We will publish a comprehensive review of public finances to identify waste, corruption, and inefficiencies, followed by a plan for corrective actions,” Boko said on Tuesday. The new President has pledged to publish a “State of Progress” report by February next year, indicating “what has been achieved, challenges encountered, and plans for the next phase of transformation”. Meanwhile, his Vice, Ndaba Gaolathe, provided more details on the budget interventions the new administration is making. In a response to a parliamentary question on Wednesday, Gaolathe, who is also the Finance minister, said the country loses billions of pula to wastage, poor management or negligence as well as “subtle and clear-cut corruption”. “Consequently, the Ministry of Finance will at the appropriate time announce rigorous cost-saving measures,” he said.
According to Ndaba, these measures will include restraining government’s procurement costs even to the extent of establishing standard pricing for essential items and generally ensuring fair pricing for basic goods and services.
The P13 billion development manager model, under which government is building major public infrastructure including some long-awaited projects such as the Francistown–Nata–Maun road, will be reviewed as preliminary assessments indicate that there could be inflated construction costs.
Agricultural programmes such as Temo Letlotlo, Thuo Letlotlo and Maja-a-ikgorosa, will also be reviewed to ensure value for money, while the Boko administration will also review the agreements government has with certain landlords for rented buildings. During the campaign trail the Umbrella for Democratic Change had promised to turn some of the Masisi era programmes, such as Chema Chema, into grants. “The government is not paying market value for rented buildings,” Gaolathe said.
The new Finance minister added that the new administration would conduct a thorough review of existing budgets to identify essential expenditures, assessing each project to determine which should be government-funded and which can be self-financing. The challenge for Gaolathe is that the new administration’s rise to power not only coincides with a tight fiscal situation, but comes at the tail-end of the 2025-26 budget process, when local authorities, departments and ministries have likely already forwarded their budget requests for the next financial year.
While traditionally Cabinet should be considering a draft budget memo by next month, Gaolathe has to first secure a thebe by thebe breakdown of spending in the past financial years, while at the same time keeping to the budget timetable, the latter being a necessary effort required to keep the nerves of both investors and citizens calm.
The Finance minister also has to slow spending in the interim, while easing in the new public finance efficiencies that will kick off in the next financial year.
All the while, he will be keenly watching for a turnaround in diamond sales that will provide the fiscus with desperately needed breathing room. Gaolathe is also aware of the “Great Expectations” that await his inaugural budget next February, with Batswana keen to see the human rights focussed approach to sharing the national cake.
Misleading and unlikeable as they are, statistics will very much have to make their debut in his February budget speech, as the minister explains where the trails of former spending led to and where the new fiscal pathways are headedThe new administration has its hands full accounting for the past while reaching to future.