03 Feb 2014

The Minister of Finance and Development Planning, Mr Kenneth Matambo says the construction sector continues to face challenges of growth because of its reliance on government budget.

Presenting the 2014/2015 budget speech to the National Assembly on February 3, he said it was unsustainable for construction sector to rely heavily on government because government was facing uncertainties with respect to revenue prospects which are based on continued weak external demand for diamond exports.“This means that the construction sector has to find alternative ways of sustaining its growth in the medium to long term,” he said.

He said the nature of employment in the sector was such that a significant number of jobs are created during the construction of big projects and reduced when the projects are completed. He said this therefore means that an individual’s job in this sector was transitory hence a boom-bust cycle for the sector cannot lead to a reduction in the rate of unemployment in the economy.

Minister Matambo further said another sector that with potential for growth and employment creation was agriculture. He however noted that it was unfortunate the performance of this sector has been dismal due to inadequate rainfall and recurring drought.

This, he said presented a challenge to growth of the sector, which by nature was a highly labour intensive undertaking  with potential to absorb a majority of the unskilled to semiskilled unemployed citizens. Mr Matambo said government was working to assist farmers and encourages production in the agricultural sector as well as to graduate more farmers into commercial entities capable of creating decent jobs for Batswana.

Under the tourism sub-sector of trade, the minister said the hotel and restaurant have the potential for growth and employment creation.

“In this regard, efforts continue to be directed towards broadening the tourism base in terms of geographic location and product diversification such as natural tourism,” he said. The Minister further said the manufacturing sector has the potential to contribute towards economic growth and employment creation.

He said government through agencies such as Botswana Investment and Trade Centre (BITC) will continue to promote domestic and foreign direct investment into the sector and provide targeted fiscal incentives to major manufacturing projects to enhance value addition and competitiveness of their products. Meanwhile, Mr Matambo said achieving growth in some of the non-mining sectors requires investment, both domestic and foreign, which he said both can only take place in a stable macroeconomic environment and improved productivity.

He said the Moody’s Investors Service and Standard and Poor’s have maintained Botswana’s investment grade sovereign credit ratings with stable outlook. He said the ratings reflect strong financial position of government attributed to prudent fiscal policies and the long record of political stability. ENDS