Government cashflow has declined in 2020 as a result of a fall in level of exports and devastating effects of coronavirus on the economy. Finance Minister, Thapelo Matsheka said government recorded a shortfall of P14.8 billion in its overall budget in 2020 compared to a shortfall of P5.8 billion recorded in the 2019 budget.
What does that mean? A fall in cashflow means that government has less money for economic development in 2021 such as repairing roads and building schools and hospitals.
What did Matsheka say? Giving a budget speech in Parliament this week, Minister Matsheka said that other countries have been buying less and less of our diamonds and other minerals.
As a result:
· Foreign reserves decreased by 10% from P65.2 billion in December 2019 to P58.7 billion in 2020
· Unemployment increased by 2% as a result of lockdowns
· Government will introduce a number of taxes to increase its revenue base and boost the economy
Any source of hope? To address high level of unemployment, especially among the youth, the minister said the government has invested P2.6 billion towards the Youth Empowerment Drive.
He mentioned investments such as the Tertiary Education Financing, National Service Scheme, Youth Development Fund, and Internship Programme.