NDP 10 budget deficit slashed

Brian Benza
Staff Writer | Tuesday April 16, 2013 00:00

 

According to the plan's  Mid-Term Review (MTR) document currently being debated in Parliament, total revenues were originally put at P213.7 billion in the seven-year plan period against expenditure of P245.7 billion. But the resource  envelope  have since been revised to P272.9 billion and P285.4 billion respectively.'These  new projections indicate that the plan will end in 2016 with a national accumulated deficit of P12.7 billion. While this situation is favourable when compared to the original cumulative deficit projection, this is significant and it points to the economy's need to start generating budget surpluses that can be used to pay off part of  this national debt,' reads the MTR report.

NDP 10 is a three-pronged economic and social development strategy that seeks to create a private sector enabling and supportive policy environment, stimulate increased domestic and foreign private investment and enhance competitiveness in both goods and services markets.The MTR paper provides a review of the NDP to determine whether the implementation process is achieving the intended objectives and targets. The plan will then be revised to orient it towards the desired course for the remaining part of the implementation period.

In  the first three years of the development  plan, governmmet spent P116.6 billion against  revenues of P100.4 billion punching a P16.2 billion hole into national coffers by the end of the 2012-2013 financial year.At the end of the current financial year,  the cumulative budget deficit is likely to drop to P15.3 billion due to the expected slight surplus. Part of the deficit will be financed by external and domestic borrowings. The rest will be financed from internally generated funds, which include minerals, customs, VAT and income tax revenues.Some of the major  capital projects undertaken so far  under the  NDP 10 include the Morupule B power station, dam constructions in Dikgatlhong, Thune and Lotsane, the North-South Water Carrier II, expansion of the Sir Seretse Khama International Airport, Francistown and Maun airports, BIUST, the expansion of UB, ISPAAD  and the labour-intensive poverty alleviation public works.

'In light of  lessons learnt from  the economic shocks, the selection and implementation of high economic impact projects that have high economic returns is essential. For this to happen, all planned projects must be subjected to rigorous economic appraisals which ensure that only projects with the highest social returns are selected, and implemented on time and on budget,' the MTR  report says.The MTR predicts that going by the growth of the economy, which has been progressively slowing down in the last 15 years, the NDP 10 target of a growth rate of 7.5 percent by 2016 is unrealistic.According to the MTR, macroeconomic projection results reveal that the economy will grow at six percent, 5.8 percent, 5.7 percent and six percent in the last four years of the plan. 'The highest attainable rate is way below the required 7.5 percent growth in order for Vision 2016 objective of 'Prosperity for all' to be achieved.

'The mining sector's share of GDP will decrease from 15.1 percent in 2009-2010 to 11.9 percent in 2015-2016.Government contribution to GDP will decrease from 13.8 percent in 2009-2010 to 10.6 percent by the end of the plan,' reads the document. Unlike previous development plans, which spanned over six years, NDP 10, which is now at mid-point, is being implemented over seven years (2009-2016) to coincide with Vision 2016 deadlines.