07 Nov 2017

President Lt Gen. Dr Seretse Khama Ian Khama says the economy is expected to reach 4.7 per cent growth rate this year and 5.3 per cent next year, driven mainly by improvements in both mining and non-mining sectors. 

Adressing the nation on November 6, the President said the economy grew by 4.3 per cent in 2016, driven by non-mining sectors such as Trade, Hotels and Restaurants and Transport and Communications industries.

“A key factor in boosting the hotel and hospitality sector in recent years has been the growth of downstream diamond industry activities following the relocation of the Diamond Trading Company from London to Gaborone in 2012,” he said.

President Khama said notwithstanding the negative effects of the BCL liquidation, contraction in the mining sector was also reduced last year to 3.7 per cent as opposed to 19.6 per cent in 2015.

The President said the water and electricity sector is projected to expand as a result of an additional unit at Morupule B power station and the restoration of Morupule A, and is further expected to boost other sectors of the economy.

He said diamond production is also expected to increase due to recovery in global demand, particularly in advanced economies.

The recently released World Economic Outlook report by the International Monetary Fund (IMF), projects the global economy to increase to 3.6 per cent in 2017 and 3.7 per cent in 2018.

“Despite this modest economic outlook, medium term downside risks remain, including prolonged policy and political uncertainty in both advanced and emerging economies,” he said.

The President said advanced economies are now expected to grow at 2.2 per cent in 2017 and 2.0 per cent 2018, improving on the 1.7 per cent attained in 2016.

Talking about inflation rate, President Khama said it was heartening that is has remained at the lower end of Bank of Botswana’s medium term inflation range of 3 – 6 per cent.

He said since the beginning of the year the rate hovered between 3.1 per cent and 3.5 per cent.

Botswana registered a trade surplus of P13.5 billion in 2016, resulting in balance of payments surplus of P2.8 billion, in contrast to the deficit of P0.57 billion that was recorded for 2015.

Total imports for 2016 were valued at P66.9 billion against P73.2 billion recorded in 2015, a reduction of 8.6 per cent.

On foreign reserves, President Khama said at the end of August this year, they were valued at P76.6 billion, equivalent to 17 months of import cover.

“Our exchange rate policy continues to support competitiveness of local industries in both domestic and international markets by maintaining the sustainability of the Pula against a basket of leading currencies,” he said. ENDS