Matambo projects strong economic recovery

12th February 2018
UPBEAT:Kenneth Matambo, finance minister forecast positive growth Source:The Midweek Sun

The country’s economy will accelerate by more than five percent this year, backed by strong recovery of the mining and non-mining sectors, Finance and Economic Development minister, Kenneth Matambo told legislators on Monday. Presenting the 2018/19 budget speech, the finance minister said the country’s growth of 5.3 percent in 2018, will be boosted by global economic recovery which always works in favour of the country’s mining sector, especially diamonds. On the surface, it will seem diamonds’ recovery is being sustained since last year as evidenced by good sales.

De Beers, a company owned jointly by Botswana Government and Anglo American, has seen its first sales of 2018 jumping to $665 million (about P6, 65 billion). Bruce Cleaver, CEO, De Beers Group, said: “Following positive early signs for diamond jewellery sales over the holiday season in the US, the need for the industry to restock led to increasing demand for our rough diamonds in the first sales cycle of 2018.

“This seasonal restocking demand does usually see a larger share of annual purchases being planned into the first sales cycle of the year by our customers, resulting in an encouraging sales performance”. Diamonds remain the country’s biggest export revenue earner by far, in the process contributing more to the country’s treasury. Matambo, whose term as finance minister is expected to lapse just before general elections next year, told the national assembly that, non-mining sector’s expected robust growth will be lifted by government’s interventions in terms of policies and strategies meant to diversify the economy. Impacts of the Economic Stimulus Package (ESP) are expected to be felt across the economy in the short to medium term.

The ESP was launched some three years ago to jack up the economy by investing in high-return projects across all sectors. While the minister is bullish of the year ahead, Economic Research Manager at First National Bank (FNB) Botswana, Moatlhodi Sebabole is less buoyant. “As FNBB, we forecast a growth rate of 1.7 percent for 2017 and 3.2 percent for 2018 – way below the forecasts by the finance ministry,” he told Botswana Guardian last week.

“We are cautiously optimistic in our growth estimates due to the structural make-up of the economy which remains mineral-led and has limited multiplier effect on employment creation and enhanced productivity”. Meanwhile, Matambo said more efforts would be channeled towards economic diversification, which includes improving ease of doing business and the development and maintenance of economic infrastructure. “With regard to the ease of doing business, Government remains committed to improving the country’s ranking as it affects its ability to attract foreign direct investment, which is necessary for growth and economic diversification,” stated Matambo.

As far as development of economic infrastructure is concerned, government will spend a significant amount of the 2018/19 budget in funding energy, water and information and technology infrastructure.

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