26 May 2016

Botswana will recover from a mild recession that the country entered into in 2015, President Lt Gen. Dr Seretse Khama Ian Khama has said.

Briefing the 40^th High Level Consultative Council meeting in Gaborone yesterday, he said external commentators such as the International Monetary Fund (IMF) forecasted that Botswana would average growth of 4.3 per cent a year from 2016 to 2020.

“Diamond sales have picked up in recent months and there is cautious optimism in this regard,” he said.

He, however, cautioned captain of industries not to stick to the said figure because the global economic activity remained volatile and unresponsive.

In 2015, the country’s GDP growth turned slightly negative owing to a decline in the global demand for diamonds and copper.

He said uneven recovery was expected to continue in the advanced economies while growth in emerging markets and developing economies continued to decline.

President Khama said recently a grouping of countries called the BRICS, Brazil, Russia, India, China and South Africa were currently experiencing serous economic challenges. 

Of this grouping, he said, only India has achieved economic stability.

“You will be aware that Brazil is in recession, Russia too has serious economic challenges and China is also having decline in GDP growth which has led to a larger cause other declines to economies around the world especially in areas of commodities. 

Off-course our neighbour South Africa too is suffering from economic decline and loss of revenue from their currency,” he said.

President Khama further said although the non-mining activities such as Trade, Transport and Communications and Financial and Business Services recorded positive growth over the year, the growth was mitigated owing to negative growth from mining activity, a regional drought, and electricity and water challenges.

He further said due stable macroeconomic policies, inflation has remained low at around 3 per cent, which is at the lower end of the targeted range of 3–6 per cent, partly due to the effect of a firm Pula exchange rate against a volatile and weakened Rand which helped to curb imported inflation from the region.

President Khama said the Ministry of Investment Trade and Industry and Business Botswana were assigned during last HLCC to check on traders and retailers who were simply sticking the Pula price over the numerically identical Rand price.

He said at an exchange rate which fluctuated between 1.32 and 1.40 Rand to a Pula during this past period, the exchange rate differential should be passed on to the consumer.

“The ministry will now check on traders and retailers to ensure that the exchange rate differential is indeed being passed on to the consumer, and appropriate action will be taken against those who persist in this unfair practice,” he said. 

With regards to ESP, he said a robust and aggressive Economic Stimulus Programme was adopted to address prevailing unemployment.He said the implementation of the programme was ongoing and that ministries were working tirelessly to ensure that the programme was successfully implemented. President Khama appealed to the private sector to join hands with government in implementing the programme and that bold decisions to ensure the success of the programme have been taken. ENDS