The sale on Tuesday by the Botswana government of its holding, through its diamond mining arm Debswana, of 90-million pounds sterling in Anglo American, is seen as a move to halt a two year slide into deficit budgeting.
The government, a 50% partner with De Beers in Debswana, will net 45-million pounds sterling — around 670-million pula.
”After deficit out-turns, the finance minister said ‘no more’,” analysts said on Tuesday.
The 2004/05 budget is for a 70-million pula surplus. Finance ministry officials were not available for comment.
It had been widely assumed that the 7,5% February devaluation of the pula was a budget balancing exercise.
”That will take care of this year (from April),” said the analysts.
”They had to meet revenue estimates of 16,2-billion pula.
”Expenditure has been increasing faster than revenue, there is nothing wrong with one deficit, what is wrong is if you are on unsustainable revenue and expenditure trends.
”Evidence indicated that the trend in Botswana was unsustainable.”
With an unbroken 16 years of budget surpluses before the present trend emerged, Botswana was not used to working with a deficit budget. – Sapa