Minister wants policy review on capital budget
FINANCE minister Thabo Sofonea has called for the budget for capital expenditure to be fixed at a minimum 30 percent of the total national budget to cater for “meaningful” infrastructural developments.
Mr Sofonea made the call on Thursday in parliament soon after the National Assembly approved his proposal to reduce the capital budget estimates by M659 million from M6, 3 billion to just over M5, 6 billion. The M659 million will be re-directed to the government’s fight against the deadly Coronavirus (Covid-19) pandemic.
The approved capital budget accounts for 24 percent of the total M21, 9 billion budget proposed for the 2020/21 financial year.
Mr Sofonea said although this year’s reduction was necessary to re-direct funds to fight Covid-19, the capital budget should always be at least 30 percent of the total budget or else there would be no meaningful infrastructural developments taking place.
“Our capital budget accounts for 24 percent of the total budget. This means the total budget is mainly for recurrent expenditure and there will not be enough in the capital budget to address priority areas as stipulated in the National Strategic Development Plan (NSDP) to ensure national development,” Mr Sofonea said.
“I wish we could draft a law that will fix a minimum level for the capital budget share in the total budget. For instance, we could set the margin at 30 percent of the total budget even when there are tough times like the COVID-19 situation.”
He also called on ministries to utilise their share of the capital budget to implement infrastructure projects in line with the government’s vision for national development.
“The slow rate at which ministries utilise the capital budget is also not helping. This may be influenced by procurement processes. There is a serious challenge of delays at the tendering stage which affects the ability of departments to use the funds.
“We need to sit down with chief accounting officers to see how best the procurement process can be expedited to ensure the funds for infrastructural developments are utilised.”
The Popular Front for Democracy (PFD)’s Qalo constituency legislator Thabang Kholumo concurred with Mr Sofonea. Mr Kholumo said the low capital budget was to blame for the country’s slow pace of development.
“I encourage the minister to increase the capital budget because it goes directly towards improving the lives of the people. We would rather struggle to raise funds to pay salaries while ensuring that the electorate’s interests are attended to,” Mr Kholumo said.
Mr Kholumo also expressed concern that the capital budget estimates for each department were not broken down to indicate the specific capital projects to be implemented during the 2020/2021 financial year.
He said this lack of transparency could give ministers an opportunity to divert funds allocated to their ministries for infrastructural developments to their own selfish political interests.
“Last year’s capital budget was the best because ministries detailed the projects they intended to implement with the allocations and that was very good. But this year we are back to the situation where the capital projects are only disclosed to the Finance minister not to parliament. “What we are basically doing is giving the ministers a blank cheque to do as they please with the capital budget allocations. This could lead to a situation where ministers can choose divert funds and embark on capital projects within their constituencies for political mileage.
“This is not advisable because we will not be able to monitor the ministries’ progress on their approved capital projects,” Mr Kholumo said.