Botswana launches Covid-19 economic response plan


Mpho Tebele

Gaborone - Botswana has launched an economic response to the Covid-19 pandemic with a view to addressing a number of strategic economic objectives.

Some of the objectives are aimed at supporting workers, stabilising businesses, ensuring the availability of strategic reserves and promoting opportunities for economic diversification.

To respond to the pandemic, government has established the Covid-19 Pandemic Relief Fund with capitalization of P2 billion. The private sector, development partners, philanthropists, and individuals continue to contribute to this fund.

In supporting workers, Botswana will provide a wage subsidy totaling P1 billion with the objective of assisting businesses to retain employees.  Government will also contribute 50% of basic salary of employees of affected businesses as well as offering a subsidy for employees ranging between P1 000 and P2 500 per month for three months (April, May and June 2020).

The Botswana Unified Revenue Service (BURS) has been given the mandate to administer the scheme and businesses must be registered for tax and this assistance will be offered regardless of whether the business owes tax

Ministry of Finance and Economic Development Permanent Secretary, Dr Wilfred Mandlebe, said the objective is also to ensure that there should be no retrenchments. He said eligible businesses should supply payroll information to BURS, which will administer the subsidy, including name, identity cards and basic monthly salary for each employee.

The following interventions are offers to the private sector to stabilise businesses: Government Loan Guarantee (up to P1 billion), 80% government, 20% commercial banks.

Government has also developed guidelines targeting sectors that have been negatively affected by the coronavirus pandemic. The exact terms and conditions are still to be negotiated. Matsheka said BURS will allow deferral of 75% of any two quarterly payments between March and September 2020 and deferred payments to be repaid from March 2021.

He said businesses with a turnover of over 250 million pula per annum will be negotiated on a case-by-case basis.

Mandlebe said all government institutions will pay purchase order within five days and parastatals to pay within 24 hours and improve efficiency of procurement processes.

Government will also pay all outstanding invoices (arrears) in two weeks (530 million pula); and validity of all outstanding GPOs to be extended.

He said there will be no price increase for all communication services by all telecommunication operators.

Mandlebe said from the Covid-19 Pandemic Relief Fund, government will provide funding for strategic reserves and other essential costs as follows: grain reserves (maize, sorghum, pulses) – 200 million pula, water supply (bowsers, trucks, water tanks, fuel) – 35 million pula.

Government will also provide funding for emergency medical costs (supplies, equipment, tents, beds, accommodation, disinfectant (helicopter), medical-tele consultation, additional health workforce and related welfare) – 200 million pula and psychosocial support (counselling services and burials) – 40 million pula.

Mandlebe said the total amount of the proposed economic response is estimated at 5 billion pula or 2.4% of GDP.

He said the following are examples of opportunities in the agricultural sector that are presented by the pandemic to produce the country’s requirements locally; upscale production of horticultural produce, promote market centers for agricultural produce and capacitate National Agro-processing Plant (NAPRO) to absorb all excess production of vegetables.

Some of the opportunities also include enforcing procurement of locally manufactured products, promotion of livestock value chains (e.g. fodder production, dairy heads) in the clusters to increase production; and setting-up milk collection centres in communal areas and re-route trucks of milk processers to collect from there.

“The above list is not exhaustive. All the sectors are encouraged to introspect and identify products that can be produced locally so that the country can achieve self-sufficient and economic diversification as the pandemic has exposed our heavy dependency and vulnerability,” said Mandlebe

Mandlebe added that The Economic Stimulus Package post-Corona will be developed after 6 months to boost the economy. At the moment, priority is containment of the outbreak of the virus to save lives.





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