Minister of Finance and Development Planning

Business & Finance

The continued slowdown in the global economy particularly in the major markets for the Botswana’s diamonds has adversely affected the country’s economic growth, Minister of Finance and Development Planning, Mr Kenneth Matambo has said. Delivering the 2016/17 budget speech yesterday, Mr Matambo, however, said a modest recovery was still anticipated this year. He said better performance in mining and non-mining sectors would lead to a recovery in the country’s economic growth rate.

“A modest recovery in the domestic economy is expected in 2016 and 2017, with growth rates projected to be at 4.2 per cent and 4.3 percent, respectively, underpinned by recovery in both the mining and non-mining sectors. Mining sector, which accounts for a quarter of the domestic output, is forecast to grow by 0.6 percent in 2016, and a further 0.7 percent in 2017, compared to the decline of 14 percent in 2015,” he said.

Mr Matambo stated that the non-mining sector was forecast to grow by 4.7 and 4.9 per cent respectively in 2016 and 2017, compared to the 3.9 per cent achieved in 2015.

“These growth forecasts are based on the expected moderate recovery in the global economy as well as the impact of domestic policy initiatives such as the Economic Stimulus Programme,” he said.

The preliminary overall balance of payments for 2015, he said, was estimated at P3.3 billion as at November 2015, a decrease from P11.4 billion recorded in 2014.

“The current account surplus is estimated to fall, from P22.9 billion in 2014 to P12.9 billion in 2015. The positive contribution of net inflows of receipts from the Southern African Customs Union (SACU) to the current account balance is expected to be offset by the trade deficit. Exports of goods and services are estimated to decrease by 18.6 percent in 2015, due to weak global demand for rough diamonds, while imports are also projected to decline by 8.1 percent in 2015,” he said.

Mr Matambo told Parliament that the level of the country’s foreign exchange reserves stood at P84.9 billion in December 2015, an increase of 7.3 per cent from P79.1 billion in the previous year, equivalent to 7.5 billion United States dollars and representing an equivalent of 19 months import cover of goods and services. He further stated that the reserves in the government investment account amounted to P35 billion. (BOPA)

Source: Republic of Botswana