07 May 2015

President Lt Gen. Seretse Khama Ian Khama has called on the private sector  to join hands with government in growing the local economy in the face of unfavorable global conditions.

Speaking during the High Level Consultative Council meeting in Gaborone on May 7, President Khama said while government continued to work on improving the doing business climate, the private sector should intensify its participation in the development agenda of the country as that would strengthen its growth on a sustainable basis. 

President Khama further indicated that government continued to work aggressively to catapult diversification and sustain growth in the economy.

“While this effort is not easy, it is not by any stretch of imagination, insurmountable. It requires boldness, assertiveness, hard work, a supportive regulatory environment and a pro-business approach by both the public and private sectors,” he said.

President Khama also noted that it was imperative for Botswana businesses to have a broad international outlook, as productive and competitive enterprises were the key foundation for economic growth and national wealth creation

Talking to the local economic situation, Lt Gen. Khama said Botswana’s economic recovery had been a challenge to sustain, with annual growth rate on fluctuation.

According to the President, the growth rate declined from 6.1 per cent in 2011 to 4.2 per cent in 2012 and ultimately increasing to 9.3 per cent in 2013, only to decline again to 4.4 per cent in 2014. 

The relative growth in 2014, he said was associated with increases in transport and communications, trade, hotels and restaurants as well as mining, which he said recorded an increase in value-add of 7.4, 7.1 and 4.5 per cent, respectively.

The mining sector, he said, remained a major contributor to GDP at 22.9 per cent in 2014, compared to 21.9 per cent recorded in 2013 despite government’s efforts to diversify away from it. 

“Inflation has continued to fall, falling from 3.6 per cent in January to 2.8 per cent in February 2015, below the Bank of Botswana range of three to six per cent following a decrease in domestic fuel prices,” he added.

For sub-Saharan Africa, he said growth was projected at 4.9 and 5.5 per cent in 2015 and 2016, respectively compared to 4.8 per cent in 2014. 

Such growth, he explained was associated, among others, with increased public and private investments, particularly in infrastructure, and strong agricultural production.

“The positive growth, however, may be facing challenges such as the Ebola outbreak, security challenges, as well as risks stemming from the global environment. This calls for countries to develop economic diversification strategies and sustain high growth while preserving fiscal, debt and external sustainability,” he said.

On the global front, the President told the gathering of government officials and the private sector that the global economy was yet to stabilise following the recent financial crisis.

He also indicated that as it was, global economic growth continued to be weak and uneven with the increasing possibility of mediocre growth becoming the new norm. 

Nonetheless, he noted that the global growth for years 2015 and 2016 was projected at 3.5 and 3.7 per cent respectively, compared to 3.3 per cent in 2014. 

Lower growth, he said, was also expected from major commodity exporters, adding that there were however signs of recovery buoyed by the falling oil prices and supportive fiscal and monetary policies although for the oil producing countries it meant lower growth. 

However, President Khama noted that such boost was projected to be offset by negative factors, which included volatility in global fiscal markets and balance sheet vulnerabilities in oil exporters whilst stagnation and low inflation were still concerns in the Euro area and in Japan. BOPA