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Budget speech 2007: Botswana
5 February 2007
Mr Baledzi Gaolathe
Minister of Finance and Development Planning, Botswana

Acknowledgements: Website: www.gov.bw


Introduction

  1. Mr. Speaker, I have the honour this afternoon to present to this Honourable House budget proposals for the financial year 2007/2008.


  2. Mr. Speaker, we face many challenges in our efforts to improve the lives of all Batswana. A central challenge is to be internationally competitive so that the goods and services we produce have a wider market and yield high incomes for Batswana. This means we must strive to increase productivity and service delivery to meet international standards in all sectors of the economy, not just those directly exposed to international competition. Some of the sectors in which we are already globally competitive are also risky, notably diamond mining, where the world market can and does change significantly from year to year. In the face of this risk, we seek to diversify by expanding less risky, but nevertheless highly productive activities. Together, these challenges point to the theme for this year’s Budget Speech: Improved Productivity – The Key to Sustainable Economic Diversification and Global Competitiveness. All stakeholders, including the private sector, labour, and nongovernmental organisations must improve on their past performance and identify new strategies for attainment of sustainable global competitiveness. To do this, we should continue to invest in our local talents, whilst at the same time attracting global talents and skills in those areas where there are shortages. In brief, to maintain a competitive edge in the ever changing global economy we must be more productive, in other words, producing more with less by utilising the same or less inputs more efficiently to produce more outputs than before.


  3. Mr. Speaker, much has been accomplished in the 40 years since Independence. As the International Monetary Fund stated in its latest Article IV surveillance report, Botswana has been among the world’s fastest growing economies over the past 40 years, with an impressive record of prudent macroeconomic policies and good governance, which has moved the country from being one of the poorest in the world to the upper-middle income range. At the time of Independence in 1966, in terms of today’s prices, per capita income was about P3 000 compared to about P33 000 in 2005/06. Real GDP growth averaged 9 percent between 1965/66 and 2005/06. In 1965/66, Government expenditure was about P10 million, while in 2006/07 total Government expenditure had grown to P22.4 billion. Financing of the Government budget from foreign grants declined from 51 percent in 1965/66 to less than 2 percent in 2006/07. Poverty rates have declined, from 46.6 percent in 1985/86 to 30.2 percent in 2002/03, and the NDP 9 Mid-Term Review, under the Base Case scenario, projects a further decline in poverty rates to 23 percent by the end of the Plan period.


  4. Mr. Speaker, considerably more detail could be given about our development path from the humble beginning in 1966. However, of paramount importance today is to set the economy on a sustainable path for Botswana’s future prosperity, and thereby ensure that the Vision 2016 objectives and the United Nations Millennium Development Goals are achieved. To this end, as was mentioned in His Excellency’s State of the Nation Address in November 2006, the Business and Economic Advisory Council submitted its report to Government at the end of September 2006. The report highlights the need for more openness of the Botswana economy and increased international competitiveness, as well as the critical need to attract and retain significant levels of foreign direct investment by further improving the investment climate and adopting more business friendly and supportive processes and procedures in the public sector. The report also makes proposals for Government to examine the feasibility of implementing and fast tracking some identified projects. Government is currently working on a plan to facilitate implementation of the proposals made. I expect my Ministerial colleagues to elaborate on such plans in their sectoral Committee of Supply Statements.

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