Diamonds Are Not Forever : Botswana Medium-term Fiscal Sustainability

Kojo, Naoko C.

关键词: ACCOUNTING;    ACCOUNTING FRAMEWORK;    ADVERSE IMPACTS;    AGRICULTURE;    AMORTIZATION;   

DOI  :  10.1596/1813-9450-5480
RP-ID  :  WPS5480

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper analyzes Botswana'smedium-term fiscal sustainability in view of the expecteddepletion of diamonds in the future. The analysis shows thatin the absence of policy adjustments, Botswana'scurrent fiscal policy strategy is unsustainable over thelonger term, which could endanger macroeconomic stabilityand Botswana's reputation as Africa's successstory. Ensuring medium-term sustainability ofBotswana's public finances requires stronger revenuecollection, through improved revenue administration, greatertax enforcement, and the rationalization of tax exemptionsin order to realize the full revenue potential.Opportunities also exist to generate more revenue from thenon-mining sector through changes in the tax regime. At thesame time, the government needs to maximize theeffectiveness of public expenditure and bring down publicspending to levels that are more in line with long-termrevenue prospects. A greater control over the public sectorwage bill is critically important. In-house capacity formacroeconomic monitoring and fiscal analysis also needs tobe enhanced further. Looking ahead, growth of a dynamicnon-mining sector is crucial for Botswana not only from thefiscal sustainability point of view, but from the point ofview of achieving balanced development that will create jobsand deliver durable reduction in poverty and inequality.Fiscal policy will have to play a central role in this process.