12 Dec 2024

The Ministry of Finance held a budget consultation with the youth to gather public input on the draft budget for the 2025/26 fiscal year.

The Budget Talk with Youth held in Gaborone yesterday, was in its second occurrence and was attended by Vice President and Minister of Finance, Mr Ndaba Gaolathe.

In his address, Mr Gaolathe emphasised the importance of building strong relationships and mutual trust with the youth.

Discussing the macroeconomic environment that shapes the 2025/26 budget, Mr Gaolathe noted that the global economy was experiencing slow growth, with projections indicating a decline from 3.3 per cent in 2023 to 3.2 per cent in 2024/25.

Domestically, real GDP growth slowed to 2.7 per cent in 2023, down from 5.5 per cent in 2022, primarily due to weak performance in diamond trading and energy supply shortages in the water and electricity sectors, he said.

Mr Gaolathe said inflation rates dropped more rapidly than expected following the global energy price surge in 2022, with headline inflation recorded at 1.6 per cent in October 2024, compared to 3.1 per cent in the same month of the previous year.

He highlighted the necessity for youth involvement in safeguarding the economy against future shocks and mitigating risks of unsustainable public debt levels.

He stated that government must prioritise measures to enhance domestic revenue mobilisation and accelerate fiscal consolidation.

The Vice President stressed the importance of aligning fiscal policy objectives with the desired economic transformation, aiming to rebuild fiscal buffers and implement effective expenditure management that ensured sustainability.

He shared with the youth, government’s commitment to a fiscal strategy that would safeguard resources for future generations, advocating for reduced spending to build for the future and increased savings to foster sustainable financial assets.

To stimulate revenue growth, government will explore alternative income sources and work on developing sustainable financial assets to restore government investment accounts, thereby enhancing economic resilience and laying a foundation for long-term stability and growth, he said.

In the medium term, Mr Gaolathe said government planned to continue fiscal consolidation efforts, with a focus on reducing total expenditure, particularly the public sector wage bill, and scaling down grants and subsidies.

Additionally, reforms of state-owned enterprises and cost-containment measures will be implemented.

While these strategies aim to enhance public spending efficiency, Mr Gaolathe acknowledged the critical need to address the country’s reliance on minerals and mineral revenue.

During the consultation, the youth expressed their thoughts on proposed economic rebuilding activities, offering suggestions and insights that the ministry planned to review for incorporation into the draft budget for the 2025/26 financial year. ENDS