An analysis of the development budget and how it has been spent in the past few years, does little to raise confidence that Finance Minister, Peggy Serame’s proposed allocation of P12.7 billion for projects, will see each and every thebe go where it needs to go and achieve what it needs to achieve.
According to notes from the Finance Ministry, between the 2016-17 and 2020-21 fiscal years, an average of 88% of the development budgets allocated through that period were actually spent, or just over four of every five thebe.
That period however, includes the challenges associated with COVID-19 such as movement restrictions, travel bans and supply chain constraints which in all likelihood factor heavily into the overall 88% average.
However, in 2021-22, when COVID-19 and its limitations were petering out, just 58.7% of the development budget for that year had been used by December 2021, a figure that reportedly alarmed Finance Ministry officials. By March 31 last year, the end of the financial year, just P11.9 billion of the proposed P14.7 billion development budget had been spent, or 81%, with much of this consisting of frenzied procurement in the final three months of the financial year.
Trends aside, Serame is aware of the possibility that the funds she is proposing this year for capital projects, may be underspent.
“Achieving the goals and aspirations of the nation by 2036 amid the recent development challenges will require bold decisions, accompanied by serious consequences for non-implementation of programmes, policies, strategies and projects, without valid reasons.”
So perennial is the implementation challenge that the above quote from the Finance Minister is not from her budget speech last Monday but actually, her speech from February last year, which underlines the long-running difficulties of ensuring that each project thebe is actually spent where and when it should be.
In this year’s budget speech Serame again stressed implementation, but backed away from threats around non-performance.
“There are also domestic challenges, which relate mainly to the slow speed of implementation of reforms and initiatives, as well as long-standing issues relating to the quality of projects,” she said.
Implementation challenges have dogged government for decades, costing the country billions of Pula in direct and opportunity costs, but more importantly denying citizens of services and forestalling their economic aspirations.
At its heart, poor implementation of government programmes, policies and projects not only means wasting the millions paid to consultants who draw up these plans, but also the potential benefit and opportunities to citizens such as access to electricity, water and other infrastructure, are equally lost in the wind.
According to the Transitional National Development Plan (TNDP), under whose aegis the P12.7 billion has been allocated for the forthcoming financial year, implementation is the millstone around government’s best laid plans.
The transitional NDP says the challenges around implementation include poor scoping, weak monitoring, capacity constraints and inaccurate costing of projects, ineffective appraisal of projects, weak monitoring and evaluation, lack of coordination and fragmentation amongst authorities. Quite critically, the minds behind the transitional NDP say the absence of accountability for implementation at the level of ministries, departments and agencies, is a challenge.
“Implementation has been a challenge over the years, and we now have much lesser room for error with only 10 months of import cover,” Kalyanaraman Vijay, Managing Partner, Grant Thornton Botswana told Mmegi.
“While it is quite encouraging to see the spike in the 2020-21 actual revenues and almost balanced budget, underspending could also be a reason for this.”
According to Serame, the economy needs to grow by at least 5.7% every year between now and 2036 in order to achieve the Vision 2036 goals. Vijay says the significant increase in the development budget and the priorities outlined by Serame are encouraging and will go a long way in stimulating economic activity.
“The Minister mentioned about partnership with the private sector.
“This is going to be the most significant pillar of support to ensure that the spending happens as envisaged, and more importantly on time and as per the expected quality,” Vijay said.
The Finance Ministry has several tools in its bag to ensure that a higher proportion of the infrastructure budget is spent this year.
These include only allocating resources for projects that are ready for implementation and that have passed the three phases of “confirmation of concept, pre-feasibility and full feasibility study”. Another is government’s Development Manager Model, where major public projects are packaged and their implementation outsourced to private companies.
The long awaited reconstruction of the Francistown-Nata-Maun road has been included under the development manager model and allocated a total of P2.4 billion in the TNDP over the next two years.
“Projects will continue to be screened and assessed on an annual basis in order to determine their readiness for funding,” Serame said in her recent budget speech.
One key tool, unmentioned in the budget speech, is government’s equity investment in Africa 50, an African Development Bank-backed continental financier, which boasts of not only facilitating private capital, but also being able to fast-track Public Private Partnerships (PPPs).
Africa 50’s preferred investment sectors include energy, transport, ICT, health, fintech and several others. Since its establishment in 2014, the institution has facilitated over $4.1 billion of capital from private investors and DFIs into various infrastructure projects across the continent.
“I want to emphasise our ability to act with speed because not all infrastructure projects are difficult,” Africa 50 CEO, Alain Ebobisse said at the equity signing deal late last December in Gaborone.
“Some are simple and we can do them quickly if we work well with government.
“I see many opportunities such as in energy, transport, and ICT and I look forward to engaging further with the line ministries.”
He added: “Our thing is about speed because it takes way too much time to do these projects when it does not have to.
“We have 17 projects we have done and more are being signed.
“We have shown that we can do these things in Africa and it does not have to take time.”
For Vijay, fast-tracking PPPs is another avenue for improving implementation in infrastructure development.
“I’m looking forward to more PPPs in various segments across the country,” he told Mmegi.
“While it is quite important to support citizens and local businesses, PPP with appropriate partners will ensure that implementation is much better.
“Government’s focus on enhancing infrastructure, health, security and education, will certainly bring a lot of confidence and directly stimulate economic growth in the country.”
For Batswana who have been greatly inconvenienced by poor infrastructure spending over the years, such as those who have watched the Nata-Maun road disintegrate into a sliver, the billions of Pula set aside this year offer hope.
But as many Batswana often say when promises of implementation are made: “Re tla re ke dipitse re di bone ka mebala”.
