COMMENTS ON THE BUDGET SPEECH

LET me begin by congratulating the Honorable Minister for Finance upon the eloquent delivery of his maiden budget speech. I must say that this is a realistic budget and not only does it point out to the problems that the economy of Eswatini is facing but it also gives the nation the ‘how’ or rather the modalities of how those issues are to be resolved. The budget addresses the major issues that are facing this economy; it tackles head- on the issue of the fiscal challenges that are facing government, the cash flow challenge, expenditures exceeding revenues and the accumulating arrears due to the private sector.

Furthermore, the budget also goes a long in showing government’s commitment in ensuring social safety nets for the population. Allow me to begin by looking first into fiscal prudence and expenditure rationalization, then delve into stimulating growth, then zero in on improved socio-economic impact, after which we will delve into infrastructure and finally disentangle the issue of building a culture of excellence.
The minister has identified the major areas of revenue leakages within the government machinery, and accordingly identified the right channels of dealing with these issues.

On the revenue mobilisation side, the plan is to increase the tax base. This the minister hopes to achieve through innovative means of taxing the informal sector or the shadow economy. The introduction of presumptive taxes will ensure that it is relatively easy for the informal sector to pay their taxes as it usually does not require that these cadres of taxpayers meet the stringent accounting requirements of the formal sector. In effect it makes it cheaper for taxpayers to pay their taxes without the arduous requirements viz audited financial statements by these taxpayers.

This will go a long way in improving the cash flow situation of government through improved revenue mobilisation. Furthermore, the budget expresses a wish to raise E900 million through the sale of government assets. This is a bold move, however, if not done properly it will further perpetuate the growing income inequality in the country, the nation will be watching this with eager eyes.

The minister’s budget speech also speaks to issues of revenue rationalisation on the expenditure side. The words ‘efficiency’ and ‘effectiveness’ appear a number of times within the minister’s budget speech.

This is exactly what is required to ease the cash flow challenges within government. Let me commend the minister on the bold decision to actually and finally point out where major leakages are occurring on the spending side, that is the CTA. This is a bold and unprecedented move on the side of the minister, one needs to understand the political pressures associated with making such decisions and pronouncements. Accolades are in order honourable minister. Allow me to further commend you on not only just pointing out the problem, but also on giving us a solution, exploring the option of privatisation of the entity.

Though I am not entirely for that route, but it is comforting that you state that you are still exploring alternatives.  Further, Minister, I commend you for highlighting all areas of revenue leakages viz, Phalala Fund, payroll systems, tendering and procurement systems, performance management systems, management of capital projects, management of school funds and IT-related controls.

It is concerning though that the minister does not allocate some amount of money into  the implementation of these strategies as we all know they will not come for free and failure to commit yourself minister in front of the whole nation and Their Majesties really is concerning.

Furthermore, through promising to reduce the administrative costs associated with delivering grants, the minister is confident that he will be able to deliver grants to over 70 000 bogogo and an increased number of OVC’s and all other social transfers at a cost of E702 million in the 2019/10 financial year, which has been reduced from the E710 million in 2018/19 financial year.

This goes on to show that the minister means business about expenditure rationalisation. By building efficiencies into the system, we will be able as a nation to make sure that each Lilangeni invested by the government goes further.
Talk of operationalising the value for money proposition, let us ensure that each Lilangeni stretches as far as it can.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: