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ESP was bound to fail!

Publishing Date : 07 August, 2018

Ndulamo Anthony Morima

When, in October 2015, government introduced the Economic Stimulus Programme (ESP) many criticized the programme as unsustainable, but they were dismissed and labelled as unpatriotic Opposition sympathizers.

Yet, last week the Minister of Infrastructure & Housing, Honourable Vincent Seretse, confirmed that His Excellency the President, Mokgweetsi Masisi, has stopped the ESP after it emerged that the multi-million Pula programme was a waste of tax payers’ money. Reportedly, Hon. Seretse stated that there were a number of botched deals across the country with huge cost implications as a result of the ESP. He stated that consequently there will be no new ESP projects.

Hon. Seretse admitted that government, against advice from Business Botswana, spent money in the programme before developing capacity among government departments, the result being that the departments lacked the capacity to monitor the programme. This, according to Hon. Seretse, resulted in scores of project consultants, developers and constructors being paid despite leaving behind a trail of botched deals, incomplete and failed projects in every corner of the country.  

As I argued in October 2015 following the launch of the programme, this was bound to happen because there was no proper consultation and planning before the programme was launched. It would be recalled that the ESP was introduced via a supplementary budget bill. The mistake government made is that before preparing the supplementary budget bill for consideration by Parliament, the Executive failed to consult extensively in order to solicit Batswana’s ideas.

Members of Parliament (MPs) too were not accorded time to consult their constituencies before voting on the bill.

The ruling Botswana Democratic Party (BDP)’s resolution that the ESP projects be monitored by cabinet ministers and BDP MPs to keep away opposition operatives in the civil service who may sabotage the projects did not help the situation either.

As politicians, cabinet ministers and MPs were always going to politicize the projects with the result that only BDP members and financial sponsors would be awarded the tenders.

Also, since cabinet ministers and MPs do not necessarily have the functional expertise required for project management, using them to monitor the projects was always going to have dire consequences in as far as quality and safety assurance are concerned.

It was inevitable that the politicians would sacrifice quality and safety for political expediency especially that the BDP wanted the projects to be competed as quickly as possible in order to gain voter support during the 2019 general elections.

Public Finance expert at the University of Botswana, Professor Emmanuel Botlhale, was right when he said “public project implementation has a chequered history in Botswana, hence, one can only hope that there will be stricter monitoring and control of project implementation”.

Certainly, stricter monitoring and control of project implementation cannot be achieved if partisan politicians are involved in project monitoring as has been the case with the ESP.

At the time, I wrote that the Directorate on Corruption and Economic Crime (DCEC) and the Public Accounts Committee (PAC) of Parliament needed to sharpen their teeth prior to the ESP projects’ commencement since corruption was likely to rise to its peak.

This is because though it would not say it publicly, the BDP would likely ensure that the project tenders are awarded to its members and sponsors.

I opined that besides this being motivated by corruption, the BDP could do this for the same reason that it gives for having cabinet ministers and BDP MPs monitor the projects, namely that if the companies awarded the tenders are owned by BDP members and sponsors their timely implementation would not be sabotaged by the Opposition.

I argued that in deciding on the ESP projects regard had to be had for sustainable economic development and economic diversification. Government needed to consider such reports as the Legatum Prosperity Index (LPI) and the Ibrahim Index of African Governance (IIAG) for guidance on its choice of projects.

It was my view that considering that the 2015 IIAG scored Botswana at 55% for infrastructural development, it was advisable for most of the projects to focus on infrastructural development, but that was not the case.

Also, the fact that the 2015 IIAG scored Botswana at 66.7% for Rural Sector development required that a significant portion of such infrastructural development be targeted at rural areas, but that was not the case. Good roads and improved water and electricity supply would, for instance, assist in growing the Agricultural and Tourism sectors which are mainly rural based economies.

It was also my view that in the implementation of the ESP government needed to consider involving more women in the projects.

This is because according to the 2015 IIAG Botswana scored a meagre 62.3% in Gender Issues, yet the ESP had no deliberate target for women empowerment. The need for diversifying our economy away from the diamond sector and away from urban areas cannot be over emphasized since the reason for Botswana’s sluggish economic growth which necessitated the ESP is a decline in diamond revenue. Not only that. Water and electricity shortages have also adversely affected the manufacturing industry.

It is in this regard that I argued that one area of focus for the ESP should be projects that would ensure improved water and electricity security for Batswana.

Construction and maintenance of power plants; construction of dams and water reticulation pipelines; and bulk power and water purchases should, therefore, have been priority projects for the ESP, but that was not the case.

I argued that projects targeted at improving Botswana’s Sustainable Economic Opportunity should also be a priority because according to the 2015 IIAG Botswana scored 66.1% in Sustainable Economic Opportunity.

This, despite the multiple economic empowerment projects that the BDP government has introduced.

I opined that under the ESP, government should not make the mistake of pouring millions of Pula on such projects as the Youth Development Fund, Young Farmers Fund, Public Works Programme (Ipelegeng), ISPAAD, LIMID, National Youth Service (Tirelo Sechaba) and the National Internship Programme in the manner they currently are, but government did exactly that.

Dr. Keith Jefferis was right in asserting that additional spending, in the form of the ESP, will only help to transform the economy if such long-term structural issues as improving the efficiency and effectiveness of government spending programmes and enhancing the business environment are at the core of the economic interventions, but that has not been the case.

I warned that because the ESP would be funded from drawings from Botswana’s Foreign Exchange Reserves (FERs), government has to be careful in its implementation of the ESP, but considering Hon. Seretse’s admissions government was far from careful.

In my view, government committed suicide by reducing the country’s foreign reserves for an ill-conceived and partisan project that only brought the country short-term relief and long term losses.

While I admitted that any economic stimulus programme would have such temporary relief measures as Ipelegeng, I argued that a significant percentage of the programme should entail such long term interventions as saving and creating long term jobs, investment in infrastructure, investment in renewable energy and tax incentives and/or rebates for individuals and companies, but the ESP had no such.

I opined that it is important that temporary relief measures not only result in temporary employment, but also contribute to skills development for the beneficiaries so that they can later use the skills for productive living, but the ESP has failed to do that.

For instance, instead of engaging Ipelegeng beneficiaries in productive agricultural, tourism and manufacturing projects they were confined to the less productive grass cutting and bush clearing projects. 

Ordinarily, FERs are primarily used as a country’s import cover. According to some Economists, Botswana’s current reserves can only provide an eighteen month import cover. This has a shortfall of six months because according to some Economists a country should ideally have a twenty four month import cover.

Also, a reduction in FERs will leave Botswana exposed to the turbulences of the international global markets such as the economic recession the world suffered in 2008.

It is in this regard that I argued that if government is to take such a risk of reducing Botswana’s FERs through the ESP expenditure it had to be for a well thought and planned intervention which is owned by Batswana and not just the BDP. This is because FERs are not simply for budget and balance of payments stabilization purposes, but are also intended to accumulate financial assets to be bequeathed to future generations.



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