Structural Reforms Key to Growth
The International Monetary Fund (IMF) has concluded consultations with Botswana, commending the government for implementing prudent policies that have shielded the economy and kept it stable despite a weakening diamond market.
The Article IV consultations that concluded last Thursday (September 13) are a prerequisite of the IMF’s Articles of Agreement, which involve discussions between IMF economists, governments and central bank officials.
The IMF assessment team – led by Enrique Gelbard – completed its visit to Gaborone last week where it engaged in talks with Bank of Botswana governor Moses Dinekere Pelaelo and finance and economic development minister Kenneth Matambo. While Botswana has not requested any IMF loans, it has benef…
Business Confidence improves in Wake of Economic Growth
According to the latest Business Expectations Survey conducted by the Bank of Botswana, optimism amongst businesses strengthened from a confidence level of 43% in last year’s second half to 48% for the current survey period, and is expected to rise further in the survey horizon for both domestic market-oriented firms and exporters.
The reason for this drastically more optimistic outlook is the economy, which grew by 4.3% in 2016 up from a negative of 1.7% in 2015. In line with previous trends, the BoB survey shows that more firms expect better business conditions going forward, with an overall confidence level of 55% for the second half of 2017 and 67% for the twelve-month period to June 2018.
Similarly, the confidence level of exp…
Introduction of Tourist Tax makes Country most expensive Safari Destination
Botswana has overcome opposition from its tourism bosses to introduce a $30 (about £23) tax on all tourists entering the country in an effort to raise money to support conservation in the safari hotspot. The Tourism Development Levy (TDL) was on the cusp of being introduced last year but stalled after opposition from the African nation’s Hospitality and Tourism Association (Hatab).
But now the Botswana Tourism Organisation (BTO) has said the fee will be owed by any visitor to Botswana’s airports and border posts from June 1, payable at the point of entry. Residents of countries within the Southern African Development Community (SADC), which counts 15 members, will be exempt from the charge. "The levy is purposed to support the growth …
Economic Outlook dampened by Utility Shortage
We now expect the economy to grow below trend in 2015 and 2016 due to the intensification of the power and water shortages as well as a slowdown in regional trade and a battling mining sector. These dynamics came through strongly in the 2Q15 GDP number where growth slowed to 2.5% y/y (3.4% in the same time last year), with both the mining and utility sectors contracting.
Mining activity, which accounts for approximately 22% of GDP and 36% of fiscal revenue, has slowed due to the struggling diamond industry (80% of Botswana’s mining revenue), falling copper and nickel output (following the closure of Discovery Metals Limited (Boseto)) and lower production of soda ash. Specifically, diamond revenues are being negatively affected by wea…
SA sacrifices neighbour and leaves Botswana to its water crisis
The possible disconnection in October of water supplies to Gaborone from a South African dam is expected to deepen the crisis in Botswana’s capital, leaving it dependent on a problematic pipeline to reservoirs in the landlocked and semi-arid country’s north. South African and Botswana authorities meet on October 1 to discuss the disconnection of Gaborone from the Molatedi Dam in North West Province after water levels slumped to 8% of capacity.
Botswana Water Utilities said yesterday such a move could have a “severe impact” on the city of 230 000 people. The capital falls within a region facing the worst drought in 34 years, Botswana’s Department of Meteorological Services said on September 11. The Kalahari Desert covers 70% of the sou…
Quarterly GDP Growth accelerates to 3.3%
Botswana’s economy grew 3.3% quarter-on-quarter in the three months ending in December, from a revised 1.5% in the third quarter, data from the statistics office showed on Friday.
On a year-on-year basis GDP growth was at 5.3% in Q4 from 5.4% in Q3.
Annually, growth slowed to 4.4% in 2014 from a revised 9.3% in 2013.
GDP slows towards Year End
Botswana’s economy grew only 1.2% quarter-on-quarter in the three months ended September, compared to 1.6% in the second quarter, data from the statistics office showed yesterday.
On a year-on-year basis GDP growth was at 5.4% in the third quarter, up from 4.5% in the second quarter. Still healthy and stable enough.
ESKOM bails out powerless Country
Botswana’s only power station has broken down due to boiler leaks and generator failures, leaving the world’s biggest diamond producer entirely dependent on power imports from South Africa’s already strained grid, its energy minister said. “All four units at the 600 MW Morupule B Power plant have broken down. Two units broke down in September while the other two failed early this month,” Kitso Mokaila told a news conference.
The plant was supposed to be fully operational by October 2012 but has been plagued by boiler failures, leading to power cuts and rolling blackouts across the landlocked southern African nation. Mokaila said scheduled outages would be kept to a minimum due to imports from South Africa, although this in turn could …
Interest Rates remain unchanged
Botswana’s Central Bank (BoB) left its benchmark lending rate unchanged at 7.5%, saying the stance was in line with its inflation objectives. “The current state of the economy, domestic and external economic prospects, and the inflation outlook, suggest that the current monetary policy stance is consistent with maintaining inflation within the Bank’s 3% to 6% objective in the medium term,” the Bank of Botswana said in a statement.
State of the Nation Address focusses on Economic Diversification
Botswana has forged ahead with strategic projects to drive economic diversification, President Lt Gen. Seretse Khama Ian Khama has said. He cited transport, energy and communications’ hub as well as global centre for mineral beneficiation, finance, tourism and innovation. In his State-of-the-Nation Address on November 4, the President said notwithstanding the uncertainties that had afflicted international markets since 2008/09, Botswana had been recovering having enjoyed positive growth rates since the 2010/11 financial year.
Botswana has forged ahead with strategic projects to drive economic diversification, President Lt Gen. Seretse Khama Ian Khama has said. He cited transport, energy and communications’ hub as well as global centre…