27 Sep 2017

Botswana’s economy is stable and impressively recovering from the recent economic meltdown.

Speaking during the Ministry of Finance and Economic Development 2018/2019 budget pitso, economic and financial policy secretary, Dr Taufila Nyamadzabo said after recording a decline of -1.7 per cent in 2015, the domestic economy recovered strongly to register a positive growth of 4.3 per cent in 2016.

He said the positive rebound in the domestic economy was largely due to the improvement in the trade, Hotels and restaurants as well as transport and communications sectors, which recorded positive growth rates of 13.5 per cent and 5.6 per cent respectively.

He stated that the growth in the trade, hotels and restaurants sector was mainly driven by the downstream diamond industries, which contributed significantly to the wholesale sub-sector, adding that the 2012 decision to relocate the Diamond Trading Company International from the United Kingdom to Botswana was instrumental in boosting the hotel and hospitality sector.

Dr Nyamadzabo reiterated that water and electricity sector, which supported other sectors, registered a higher growth of 123.0 per cent in 2016, but its contribution to the Gross Domestic Product was insignificant.

In addition, he noted that other sectors, which recorded positive growth rates in 2016, were construction with 4.2 per cent and finance and banking services with 3.8 per cent.

The agriculture and mining sectors, however recorded negative growth rates in 2016 with the latter mainly due to the decline in the copper production as well as the provisional liquidation of the BCL Mine in October last year.

He said the mining sector was expected to recover in line with the positive global economic prospects, while the other sectors would continue to benefit from the implementation of the Economic Stimulus Programme (ESP) adopted by government to boost economic growth and create employment opportunities.

In terms of domestic economic outlook, Dr Nyamadzabo highlighted that the GDP was projected to grow by 4.7 per cent, 5.3 per cent and 5.0 per cent in 2017, 2018 and 2019 receptively.

He said the average economic growth during the National Development Plan 10 was 3.9 per annum, which was slightly above the 3.3 per cent target, but below the 7.5 per cent Vision 2016 target.

He attributed the low performance to slow performance in the mining sector due to global uncertainties and low commodity prices over the NDP 10 period.

He however cautioned against some downside risks that come with positive global economic outlook, which among others included structural problems such as low productivity growth and high income inequality.

These risks, he said posed a threat to strong recovery as well as to global economic integration, particularly emerging markets and developing economies. BOPA