Just a few days after it emerged that Botswana has surplus to spend for the 2013-14 financial year, the government has shown a sixth sense by projecting on the need to freeze unnecessary budget expenditure and thereby shun any unforeseen fiscal cliff in the future.
According to Kenneth Matambo, who is the Minister of Finance & Development Planning, the government can help stem the global economic meltdown that has this week seen Eurozone markets fall, from affecting the country, by exercising spending caution and streamlining resources to emerging markets across the planet.
The Minister sees a paradigm shift of world economies where middle income countries like China, India and Brazil are taking over control amid straggling financial hubs in the West, and for this reason, the state and private sector need to redefine their approaches to foreign investment and national-level implementation, in tandem with the new global fiscal changes.
Botswana Cash Surplus Percentage
On Monday, the government announced new figures of a cash surplus for the budget after the South African region’s customs body remitted an extra 6.1 billion Rand worth of share revenues, which combined with exponential monetary returns in other sectors, saw the country amass more than P2.1B in surplus.
The cash surplus against deficit, in percentage format, has been available through the initiative of the International Monetary Fund (IMF) for decades. The index for Botswana in the last decade but one, an epoch when the country began to emerge as an economical hub, shows that the lowest percentage was in 1994, when the ratio stood at 3.50%, in comparison with the 1996 margin of 9.86%.
The mining sector on which the nation depends heavily for its annual revenue has flattened its turnover in recent years following the onset of an upset economy in Western countries where most of the market for diamonds lies. By the culmination of the 2011-2012 financial year, the customs’ returns, at 33% of the GDP, had surpassed the mining profit for the initial time ever.
The government is now keen on the enhancement of amenities, such as, health care and education, while opening up to freer privatization polices that will help attract lucrative local, expatriate and foreign investors into the country.
The Finance and Development Planning Minister is on the cards of converting every Pula the country spends into a development story that will help in reducing dependency that is only too unfeasible in the shaky world economy.