08 Dec 2024

The state of the country’s public finances is in an undesirable place.

Minister of Finance and Vice President, Mr Ndaba Gaolathe said when giving a statement in Parliament on Thursday that the public finances were in disarray.

“Here is the government system which once upon a time used to generate more revenues than it was able to spend, now the same government system has developed an almost insatiable appetite to spend and spend,” Mr Gaolathe said.

He stated that government had been spending particularly in the second half of the year, adding that at times about P8 billion was spent per month against receipts of about P2 billion per month.

The scenario if unchecked, would not be sustainable as it can lead to financial implosion of a magnitude which the country had never experienced, said Mr Gaolathe and noted that in the past, the country experienced and survived financial crises such as the 2008 recession, COVID-19 pandemic and near financial crisis but none was close to the current status.

The Vice President said the new government was banking on Batswana to trust them to return the country back to the days of prudent financial management. 

Also, Mr Gaolathe said the struggling public finances painted a picture of many parts of the system that needed mending and restoration as it was ailing.

The ailments that bedeviled the system he said included systems of prioritisation of development projects, procurement, implementation and monitoring of projects.

He said systems for transparent payments as well as informed and fair economic decision making were near dysfunctional if not broken. 

“We will repair, we will restore, we will heal these systems,” Mr Ndaba said.

Also, the Vice President said some of the state owned enterprises were not functional and putting strains in the country’s coffers, with some operating without boards and some operating with acting appointments for up to five years. 

Mr Gaolathe told Parliament that the morale of public officers was low, yet it had the most talented and finest professionals, whose talent was underutilised. He said government hoped to work with the civil service to bring out their best. 

He said signs were increasingly emerging that in the recent past, a new culture of personal enrichment and corrupt practices, cultivated by the political leadership was taking root.

The VP said the Ministry of Finance was working with all other government ministries in taking specific steps to halt the financial bleeding. 

Such, he said included development of processes, internal consultation and deployment of criteria towards the halting, deferment and possible complete reprioritisation of certain projects.

Also, he said government had taken steps to repair broken relationships with multinational companies and countries, which would fuel the fortunes of the economy. 

The VP further said the current financial situation meant that government could not afford in the immediate term any expenditures.

Also, Mr Gaolathe said another fundamental problem, which had been apparent for some time but not addressed by previous administrations, was that the government was too big and domestic revenues too low.

“While some spending cuts have been implemented, this has not been to the extent that would keep the budget deficits at a level that can be catered for by the current borrowing plan,” he said. 

And further, he said the Government Investment Account had been depleted and no longer available. Ends