National budget; Revenues, Expenses and Financing.

By definition, a National budget specifies anticipated revenues and proposed expenditures for the forthcoming fiscal year – in this context, it is for the financial year 2021/2022.

There are three major components of a budget; being revenues, expenditures and financing

Revenues

Major revenue sources for government are mineral revenue; customs and excise revenue from SACU; Non-Mineral Income Tax; VAT; BoB revenue; and various fees and charges.

Expenditures

Categories of expenditure include funding for development projects; and recurrent spending, which covers salaries for civil servants and grants & subventions to State-Owned Enterprises (SOEs) or parastatals

Financing

1. Whenever there is a shortfall of revenues to finance expenditures, the options available are withdrawal of savings from the Bank of Botswana (GIA) and borrowing (either domestic, externally, or both)
2. I will now speak about each of the above with respect to the 2021/2022 Budget
3. The structure of our revenues is that it has been highly dependent on external sources
4. An example is demonstrated by the budget outturn for 2019/2020 financial year with revenues from minerals and SACU being P28.5 billion, accounting for 52.5% of total revenues and grants
5. In the 2020/2021 original budget estimates, we anticipated to raise P35.4 billion or 56.7% from those two external sources
6. The revised estimates for 2020/2021 financial now show that we are likely to raise only P23 billion from the two external sources
7. Mineral revenue alone fell from the original estimate of P20 billion to P6.5 billion in the revised estimates (2020/2021)
8. This trend is unsustainable, and necessitates enhanced efforts towards domestic revenue mobilization, including increases in taxes.
9. Given this scenario, with external revenue sources expected to fall significantly, we had no other option but to look at domestic sources so that we fund our own development.
10. We cannot continue to rely on external sources of government revenue to finance government operations and continued provision of public services.