Botswana’s economy is expected to slow down to 3.8% in 2023, compared to 5.8% in 2022, as a consequence of weak demand for rough diamonds. So said President Mokgweetsi Masisi as part his state-of-the-nation address, delivered in Gaborone this week.
He said growth in 2023 was expected to be driven by the non-mining sector, underpinned by various factors such as government interventions aimed at accelerating economic transformation and building economic resilience.
“The annual average growth rate falls short of the 6% required to attain a high-income status, as espoused by the National Vision 2036. It is for this reason that we are intensifying our efforts to transform the economy, and sustainable economic development remains central to government’s development agenda,” said Masisi.
Regarding the cost of living, he said the average inflation recorded in 2022 was 12.2%, which was largely driven by external factors such as the increase in international oil prices and supply chain disruptions experienced during the first half of the year.
In response, the Bank of Botswana raised the monetary policy rate and has maintained it at 2.65% since August 2022, said Masisi.
The President added that inflation had reached 3.2% by September 2023, and was expected to modestly remain within the price stability range of 3% to 6% in the short to medium term.
Speaking on private sector export-led growth, Masisi said government was resolute on building a resilient export-led, innovative and knowledge-based economy with access to a skilled and internationally competitive workforce, leading-edge technology and infrastructure.
He said the growth of a diversified export-led economy remained key to building a prosperous society through the creation of value chain opportunities across all sectors, for employment and improved competitiveness.
In addition, Masisi said the expansion of value chains was expected to contribute to the country’s foreign exchange earnings and government budget – and in the process, would enable government to provide public goods and services, including infrastructure development, health, education, water and sanitation.
The president said the provisional balance of payment figures estimated a surplus of P4.5 billion in 2022, compared to a deficit of P2.9 billion in 2021, adding that government welcomed the significant growth of P7.4 billion, which had led to the increase in foreign reserves needed for payment of goods and services across borders.
Masisi said the surplus was, in part, due to favourable trade performance owing to a substantial increase in export earnings.
The total export commodities were largely from the mineral sector, particularly diamonds, copper-nickel and silver, all of which accounted for 92% of total exports contribution, Masisi said.
Despite this, he added, the import bill remained high and presented an opportunity to grow local industries.
He reiterated that foreign direct investment (FDI) inflows amounted to about P3.2 billion during the current financial year, while domestic investment and expansion stood at approximately P444 million.
Source: Botswana Daily News
