30 Jan 2023

There is need to create a balance between domestic investment and citizen economic empowerment in order to achieve economic growth.

Minister of Trade and Industry, Mr Mmusi Kgafela threforeb said there was need to change the way things were being done to accelerate goals of achieving the projected economic growth of 5.7 per cent, which shall drive Botswana to becoming a high income economy by the year 2036.

Speaking during the 11^th leadership forum in Letlhakane Wednesday held under the theme; Changing Mind-sets Making Execution Real to Build a Resilient Economy, Mr Kgafela said the theme was relevant given both the global and domestic economic environment.

Minister Kgafela indicated that the economic outlook emphasised the need to upscale efforts to support Botswana businesses and to ensure that they remained essential in tackling the unemployment rate currently standing at over 26 per cent.

The World Bank global economic prospects report of January 2023, he said, was distressing, as it predicted a slowdown in global growth of 1.7 per cent in 2023 from the three per cent expected six months ago.

Mr Kgafela said the report clearly indicated prospects of a global economic recession, which implied that Botswana’s aspirations as an economy would be impacted.

“As a result we need to be ready for this eventuality and put in place immediate mitigation measures,” he emphasised.

He stated that, according to the international merchandise statistics report of October 2022, which was issued by Statistics Botswana, Botswana was operating at a negative trade balance of P3.044 million.

Botswana’s import commodities, he said, remained high, particularly the demand on capital goods, goods imported in large quantities and value in different varieties as well as consumer goods such as food, beverages, tobacco products and textiles.

Botswana’s top most exported commodities continue to be dominated by mineral commodities and that he said clearly showed an undiversified export base.

The Statistics Botswana GDP quarter three of 2022 report, he said, showed that the manufacturing industry was on a recovery mode as demonstrated by the rise in real value of 6.9 per cent and 7.6 per cent in 2021 and 2022 respectively.

That, he said, was attributed mainly to the favourable growth rates in the sub-sectors of diamond cutting and polishing, manufacturing of wood and paper products as well as dairy products.

Similarly, sub-sectors such as manufacturing of basic metals and metal products, furniture, bakery products, grain meal and animal feed products realised that positive growth in real value added.

The positive domestic economic performance was also noted by the Bank of Botswana business expectations survey of October 2022, he added.

Mr Kgafela said the positive growth was evidenced by improvements in investment in various areas, which mainly reflected a continued domestic economic recovery, possibly supported by the prevailing accommodative economic policies and strategies.

He, however, said he was against the multiple shocks affecting the economy, which included the slowing down of the global economy, tightening of global financial conditions, elevated inflation driven by rising food and fuel price, exacerbated by the war in Ukraine, adverse weather conditions and rising risk of debt distress.

The ministry, he said, introduced a number of interventions to facilitate business development and growth, adding that it had also set afoot plan to revolutionise the playing field of trade in favour of Batswana.

The instruments included statutory instruments of school uniform, bottled water and pre-packed salts, noting that the regulation on importations of school uniform introduced on August 24, 2021 was meant to promote local production of school uniform, thereby stimulating investment and job creation in the textile and clothing sub-sector.

Other statutory instruments for consideration in facilitating Botswana businesses, he said, were products such as pre-packed cement, furniture, beds and mattresses.

The minister also highlighted that Botswana was open for business, emphasising that there was need to create a balanced domestic investment and citizen economic empowerment.

“We are not saying that foreign goods and services were shunned, there was need for a balance of a fair play and competition inclusiveness and accommodating each other,” he said.

The ministry will be hosting key events to facilitate business development and growth, he said, noting that there would be emerging economic opportunities for the local private sector to tap into, which include the African Continental Free Trade Area (AFCFTA) and Council of Ministers meeting, which Botswana will be hosting.

He also cited the US-Africa leadership summit scheduled for June, which the President Dr Mokgweetsi Masisi offered to host in Botswana. 

He said there was also an EU Botswana Business Forum on the cards and the International Gaming Regulators Conference scheduled for Gaborone in October, to be hosted by the Gambling Authority.

Botswana, he said, was in the process of ratifying the AFCFTA after satisfying itself of its economic viability.

He said Botswana should stand ready to fully take advantage of one of the largest markets in the world, as the forum provides an opportunity to find innovative ways of how the country could benefit from the events. ENDS