Govt accused of building a fragile economy
The Member of Parliament for Selibe Phikwe West Dithapelo Keorapetse says government has over the years built a fragile and vulnerable economy.
He pointed out that contemporary economic challenges of Botswana serve as a clear testimony that this government has failed to recognise that necessary conditions for sustainable socioeconomic development that would create jobs, alleviate poverty, narrow inequalities and provide opportunities for Batswana, are increased economic efficiency; expansion of national economic capacity; modern technological advance; economic and industrial diversification and adaptability to shocks.
“This government has built an economy that’s fragile and vulnerable to external shocks,” Keorapetse said, adding that for over 50 years, it’s been dependent on minerals, especially diamonds and SACU receipts.
He said as the country emerges from COVID- 19, there are no adequate expansionary fiscal policy measures. “Government has failed to put in place counter cyclical fiscal policy measures by avoiding taxes and increasing spending. This government continues to take away from the poor and middle class through all manner of hidden taxes in the form of levies and high services fees and leave out big corporations unscathed. “Big corporations, many of which avoid paying tax, are charged 22 percent corporate income tax, we have suggested 30 percent because they can afford.
“Throughout the 2022 budget debates, we were unendingly asked to ululate and praise the government for providing enough vaccines for Batswana. The praise and worship team has done a good job in that regard and we won’t belabour the point. “However, we will never forget that the COVID- 19 vaccines arrived late and that thousands of people lost their lives because they were not vaccinated on time, lacked oxygen and bed spaces in hospitals because of the clumsy preparations for COVID- 19,” Keorapetse said.
The legislator stated that the plundering of the fiscus under the guise of COVID- 19 management, the corruption, mismanagement and maladministration are somewhat documented by the Auditor General and the DCEC. “What does not get measured does not get done. Botswana’s budget and the NDPs, under Minister Serame and her predecessors, never set out job creation targets or report historical job creation or job shedding in the wider economy. “Unemployment is officially at about 25 percent and much higher for the youth but we don’t have job creation targets! Why this government has rejected economic development best practice baffles the mind? In the developed economies there are robust job creation measurement mechanisms,” Keorapetse said, when responding to the Budget Speech.
He told Parliament that the UDC alternative is that government should start setting job creation targets that can have a meaningful impact on the unemployment problem and use government budget as a tool for producing decent jobs - in addition to jobs created purely by the private sector. According to Keorapetse, this is for reasons that Government spending constitutes a large part of GDP in Botswana. He argued that Government must on a quarterly basis produce data about temporary and permanent jobs created as result of government spending. “We need targets not only on job creation but also on cutting poverty numbers and on narrowing the wealth and income disparity. We need to have targets of how much of our development budget will directly go to citizen companies. “We need measurement and reporting mechanisms on these targets. The UDC rejects Minister Serame’s recent answer in which she sought to self- praise her tax collection efforts by deliberately including customs revenues in calculating Tax- to- GDP ratio. “Customs revenue are not part of Botswana’s GDP, which is goods and services produced in the country,” he said, adding that Customs duties are based on imports into the country and imports are subtracted from GDP because they are not produced in Botswana. Keorapetse said therefore a clear indication of the inefficiency and ineffectiveness of BURS tax collection is in the 12.6 percent Tax- to- GDP ratio by Revenue Statistics in Africa. He explained that this is a figure that should be confronted and set targets against. “The figures you’ve given us which includes customs are delusional,” he said, further stating that accordingly, a target of 25 percent should be set within five years and 30 percent in 10 years.
“Consider wealth to narrow inequalities and weighted taxes on luxury goods. Review some sin taxes. Introduce transaction taxes for high financial and or bank transactions. Abolish pink tax! Consider employment tax incentives for companies that hire young people and pay a living wage.”