P64 billion for Transitional National Development Plan
TNDP gives Morwaeng more supervisory role over other Ministries
The two- year Transitional National Development Plan ( T NDP) set to start next April will cost government at least P64.07 billion.
Going by the theme, ‘ Towards a High Income Economy: Transformation Now, Prosperity Tomorrow’ the TNDP replaces the National Development Plan 12 ( NDP) which is also the last, and will be effective for the period of 2024- 2025.
Presenting the second reading in Parliament, Minister of State Presidency, Kabo Morwaeng said the TNDP, followed an extensive consultative process with various stakeholders. The TNDP is divided in two parts. Part I specifically deals with policies and strategies, while Part II covers projects and programmes earmarked for implementation during the Plan period.
Although the country has made significant strides in the economic and social development spheres, Government continues to grapple with challenges of unemployment, especially among the youth; poverty; inequality, as well as an undiversified economy, that is dependent on minerals, particularly diamonds.
To address these challenges, we must accelerate the pace of transformation, in line with the “Reset” Agenda, and take deliberate steps to change as a people, and a nation, the minister said. Further, a fundamental objective during the implementation of the TNDP will be to achieve diversified private sector- led growth, with Government only playing a facilitation role.
The Plan should serve as an action plan for reforms towards the future we want, building on the NDP 11 fundamentals of achieving inclusive growth; creation of sustainable employment; and poverty eradication. Morwaeng said the presentation and debates on this draft Plan are such that following the presentation of the overview of the Plan, I will then immediately proceed to present the Macroeconomic Chapters, being Chapters 1- and allow for their debate.
He said the Ministries have been arranged into four ( 4) groups solely for convenience. At the end of the individual Ministry presentations in that group, the House will be allowed to debate the presentations severally, following which each Ministry will respond.
Once each Ministry in that group has responded, the Minister for State President will move for the approval of the Public Investment Programme.
“The totality of the process will then conclude with the Minister for State President moving a proposal for adoption and approval of the entire Plan by Parliament”.
Morwaeng said Chapter 1 introduces the Plan, providing background information on the national development planning system in Botswana, the challenges and the reforms introduced by Government over the years, and an acknowledgement of the fact that such reforms have not been adequate to set the economy on a sustainable growth trajectory.
The Chapter acknowledges that Botswana has to reposition herself for continued and sustainable development, starting with the Reset Agenda, the review of the Constitution, as well as the institutional reforms, including reforms on the planning process introduced through the government- wide rationalisation exercise announced in April this year.
Morwaeng said this chapter provides information on the country’s physical and social structure, including the constitutional framework, geography of the country, and its population.
The Population and Housing Census digitally undertaken in March to April 2022 registered a population of 2,346,179 people, with a large proportion of the population found in the eastern region because of relatively more favourable climatic conditions in the area.
The Census showed that the country is largely urbanised, with the share of population in urban areas increasing from 45.7 percent in 1991 to 64.1 percent in 2011 and remaining so in 2017.
The 2022 preliminary census results show a further increase in the proportion of people living in urban areas to 66.8 percent. The rate of growth has been declining over the years.
There are notable changes in the population dynamics which include declining household sizes, fertility and mortality rates, including life expectancy. This has resulted in an average annual growth rate of 1.4 percent.
The people constitute a critical element of the sustainable development agenda, which commits government to eradicate poverty and hunger among people; to ensure good health and quality education; amongst other things.
The Chapter acknowledges that despite COVID- 19, which reversed some of the gains made, Botswana has made significant strides in the implementation of the Sustainable Development Goals.
This was guided by the National SDGs Roadmap adopted in February 2018, on the basis of which strategic interventions will continue to be implemented.
CHAPTER 3 IS ON ECONOMIC PERFORMANCE
It provides an assessment of the performance of the global and domestic economy during NDP 11 - looking at trends in GDP growth, the impact of the crises that hit the world economies, trade trends, performance of the diamond sector, climate change including its effects on lives and livelihoods.
He said the macroeconomic environment, both globally and domestically, has been challenged. Domestically, the environment has been characterised by a decline in GDP growth; high levels of unemployment, poverty and inequality, slow growth in exports, fiscal deficits with government finances reaching their lowest levels, and rising levels of inflation, especially in the second half of NDP11.
For the most part of NDP 11, inflation has consistently been low, with an average of 2.8 percent, and falling below one percent in mid- 2020.
Since April 2021, inflation has been rising sharply, reaching 14.6 percent in August 2022 before declining to 13.8 percent in September 2022, and further declining to 13.1 percent in October 2022, largely on account of the Russia/ Ukraine conflict.
Unemployment has also been on the rise, partially attributable to the impact of COVID- 19. The unemployment rate was 17.5 percent in 2015, and it rose to 26.0 percent in December 2021.
MACROECONOMIC PROJECTIONS
Morwaeng said it provides the macro- fiscal projections required for the preparation of the Plan, as well as the fiscal resources likely to be raised, and made available to finance the national development imperatives.
The projections, as prepared by the Ministry of Finance, go beyond the two- year period to 2025/ 26 to align with the standard three- year MediumTerm Fiscal Framework.
The economy is projected to continue on a positive growth trajectory throughout the period of the Plan; with GDP growth projected at just over 4.0 percent. Growth is analysed per sector.
The non- mining sectors are projected to perform slightly better than the mining sector, with an average growth rate of 4.6 percent. However, with an overall average growth rate of just over 4.0 percent, significant structural transformation is required to put the country on a path to high income status by 2036. This means all the sectors need to strive to do better than the projections.
He said a deficit is expected in the 2022/ 23, before being approximately balanced over the coming three years. The surpluses are necessary as they will rebuild the fiscal buffers, in the form of the Government Investment account ( GIA) held in Bank of Botswana.
He said chapter 4 ends by recognizing the importance of restoring the Government Investment Account, which has over the years deteriorated, as well as ensuring that financial liabilities or debt, are kept within statutory limits.
The Chapter acknowledges that while the rate of economic growth has been respectable in recent years, it has been too low to achieve the highincome objective by 2036, and hence there is a need to redouble efforts in order to double the rate of per capita income growth over the plan period.